Anticipating Amazon HQ2 Demand, Silverback Buys Rental-to-Condo Property
Greystone sold an $80 million Long Island City, Queens residential tower that’s under construction to Silverback and AEW Capital.
NEW YORK CITY—The Amazon Effect has a whole new meaning for Long Island City, Queens. Since the e-commerce company’s announcement of opening its HQ2 employing 25,000 people, the demand and asking price for homes in the neighborhood have already jumped higher.
Silverback Development and AEW Capital Management have acquired a nearly $80 million, 23-floor, residential building at 24-16 Queens Plaza South in Long Island City from Greystone Development. The nearly 300-foot tower has been topped off and construction at the site is 60% complete. Silverback is stepping in to complete the construction and convert the project from a multifamily rental building into for-sale condominiums.
“This project speaks to the demand for distinctive condominium buildings in neighborhoods like Long Island City, which has been overloaded with rental inventory in recent years,” says Josh Schuster, founder and managing principal of Silverback Development. “We are proud to be entering the thriving Long Island City market and repositioning this important building to meet the demand that we know is coming with the exciting addition of Amazon HQ2.”
Drew Fletcher, head of Greystone’s capital markets advisory team, negotiated the sale on behalf of Greystone and arranged the acquisition financing for the purchasers. His team including Matthew Hirsch and Matthew Klauer arranged a $54 million acquisition and construction loan from Benefit Street Partners for the completion and stabilization of the project.
The project was grandfathered under the prior 421a tax abatement program, which provides a tax exemption for a construction period of up to three years followed by a 15-year-long tax exemption period post-construction.
“Working on behalf of Silverback and AEW to secure financing for this acquisition has been a pleasure, especially since the asset has been in Greystone’s portfolio since 2016. It’s truly a phenomenal investment with all there is to come for this neighborhood,” says Fletcher.
For $23 million Greystone had acquired the property in March 2016 from Lois Kirsh, according to Real Capital Analytics. Greystone was converting the existing five-story Post Office building that was built in 1925 into a 23-floor tower with 109 residential units. Architectural firm Woods Bagot designed the renovation including its curvy façade. The building’s structural form provides a differentiating fluidity in contrast to surrounding angular construction.
When completed the 109-unit luxury residence will comprise studios, one, and two-bedroom residences. Select units will have nearly 10-foot ceilings with views of the Manhattan skyline. The development is close to Long Island City’s waterfront, and has nearby access to the Queensboro Plaza MTA station, the Long Island Expressway and Queensboro Bridge.