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LONG ISLAND CITY, NY-In a complicated deal here, which has been in the works for quite a while, the 300,000-sf, six-story Standard Motor Products Corporate Headquarters at 37-18 Northern Blvd, has officially changed hands. An out-of-state pension fund, EX 11 Northern Blvd. Acquisition LLC, run by JP Morgan, has purchased the property and will develop it into multiple loft-style commercial tenancy with ground floor retail. The sale had a contract price of $40.6 million.

The Greiner-Maltz marketing team of Dick Maltz, chairman, and John Maltz, president, represented the seller and Greiner-Maltz brokers, Decio Baio, David Junik, and Gary R. Blum represented the purchaser. EVP Keith Braddish, VP Jason Gaccione, and EVP Maury Zanoff of CBRE Capital Markets, arranged $39 million in first-mortgage financing to facilitate the acquisition.

The property was placed in contract through Greiner-Maltz, and after multiple rounds of negotiation, with more than 15 bidders jostling to become the new owners, according to president Maltz, it sold. “Standard Motors Products, like many other industrial companies, have been slowly outsourcing manufacturing,” Maltz explains to GlobeSt.com. “It didn’t make sense to have a manufacturing in that building any longer. Instead, they wanted us to sell the property for the highest price they could get and then lease back the corporate offices.” He continues that SMP wanted control over the tenants and as part of the sale, the company agreed to lease back 60,000 sf.

“Many of the bidders had businesses that were incompatible with SMP,” Maltz says. “We felt that every offer was different from the other offer, and you couldn’t match them up head to head.” He adds that what stood out about the winning bidder was that SMP knew that they could get financing. “In this environment, it was important to get a closing, so the winning bidder ended up with the winning the bid on many different levels. They were the most qualified financially, and we felt that they were the most qualified to fulfill their promise and select the right tenants.”

He tells GlobeSt.com that EX 11 Northern Blvd. Acquisition LLC plans to lease out 10,000-25,000 sf of individual floor sections to industrial and retail users and refinished the exterior so that it looks like a class A office property. He adds that rents are around $20 per sf.

Upon redevelopment, the building will feature multiple passenger and freight elevators, high ceilings, large windows and 24-hour access. The property benefits from valuable business incentives for economic development, in the form of tenant incentive programs and real estate tax reductions. As part of the asset’s redevelopment, the borrowers have proposed renovations such as new windows, building signage, façade re-finishing, lobby restoration, and the upgrading of fire safety systems. In addition to visual enhancements, the upgrades will also incorporate “green” design systems.

The financing was arranged on behalf of a JV between a local developer and an institutional fund, with the bridge loan facilitating the building’s acquisition, as well as redevelopment capital, on a fixed-rate basis for three years via a swap instrument. According to CBRE Capital Markets, Long Island City is currently experiencing economic revitalization and growth and has seen a recent surge in office demand as a direct result of rising rents in Manhattan.

Maltz agrees that the area is seeing growth. “The area is on the fringe of an industrial neighborhood that is subject to a residential rezoning plan and since this property is just outside this zone, it will benefit in the long-term.” He adds that it was a good transaction for Queens “because it takes a building that was housed by a single company and now it is going to be an incubator tenant. It keeps companies in the City at an affordable space so they aren’t forced to relocate.”

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