By Roland Li
After suffering its share of turmoil during the recession, the Lightstone Group appears poised to enter one of New York’s emerging residential markets.
David Lichtenstein’s Lightstone, one of the country’s largest private real estate companies, has purchased a residential development site at 50-01 2nd Street in Long Island City for $19.3 million.
David Junik, Gary Blum and Decio Baio, partners of Pinnacle Realty, represented the seller in the transaction.
The site has 183,456 s/f of development rights, and the deal closed at around $105 per buildable s/f. The seller was a local landlord, who has built other projects in the area, said Blum.
50-01 2nd Street’s proximity to Avalon Bay Communities’s Avalon Riverview South, the 7 train and the East River were all selling points, said Blum, and the recovering real estate market was further motivation for Lightstone to buy. “They knew Long Island City was growing,” he said.
Kasra Sanandaji, head of New York acquisitions at Lightstone, represented the buyer in-house. The new rental development will have 215 apartments and will be 190,000 s/f. Construction is expected to begin within six months and be completed within 30 months.
Lightstone has a vast portfolio of multifamily, retail, industrial and office properties, spanning 27 states. In 2007, at the height of the peak, Lightstone led a group of investors that purchased hotel group Extended Stay Hotels from the Blackstone Group. But following the market crash, Extended Stay filed for bankruptcy in 2009. In December 2009, Lightstone sold retail subsidiary Prime Outlets to Simon Property Group Inc. for $700 million. Simon also assumed $1.6 billion in debt.
Although Long Island City is rapidly changing into a residential neighborhood, elements of the past remain. This month, Pinnacle Realty also closed a transaction for an industrial building at 43-10 10th Street.
Pinnacle’s Baio, Blum, George Margaronis and Michael Prange sold the 25,000 s/f building to Dykes Lumber Company, which sells construction material, for $7.1 million. Dykes Lumber will use the site to store and sell products. The property includes 15,000 of open land, which will be used as a parking lot and loading area.
Dykes will move from its long-time location at 26-16 Jackson Avenue, a building that will be redeveloped into residential.
“A lot of it has been rezoned to residential, so there are fewer industrial properties left in Long Island City,” said Blum. “There’s just not a lot of property available for sale.”
Since forming two years ago, Pinnacle has 15 brokers and specializes in investment sales in Queens, Brooklyn and the Bronx. It is currently marketing an 18,000 s/f property in Astoria.