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The owners of the Blanchard Building in Long Island City, Queens, are selling the fee interest on the distressed office property with eyes toward converting it into a last-mile industrial development, Commercial Observer has learned.
Property owners Related Fund Management and BentallGreenOak (BGO) are working closely with their lender BrightSpire Capital and tapped Newmark’s Adam Spies and Doug Harmon to lead the marketing for office and retail complex on 21-10 51st Avenue along with Dustin Stolly and Jordan Roeschlaub, according sources and an offering memorandum (OM) obtained by CO.
Marketing of the former property’s fee interest comes as Related and BGO are considering handing back the keys on seven converted warehouses called The Point LIC, which includes the Blanchard Building, The Real Deal first reported in early February. BrightSpire, which was previously known as Colony Credit Real Estate, is now looking to sell nonperforming loans on The Point totaling around $150 million, according to TRD and sources.
The 220,000-square-foot Blanchard property is currently only 30 percent leased, with VaynerMedia, Unique Settings and Coffee Project NY among its tenants, according to the OM.
Related and BGO acquired the 220,000-square-foot Blanchard and another property in The Point portfolio — the Paragon Building at 2100 49th Avenue — for $104 million in 2016, according to the TRD.
The joint venture dropped $15 million to reposition the Blanchard from its prior warehouse use into an office building with adjoining retail aimed at attracting media and technology clients, CO previously reported. It had some success, getting digital media agency VanyerMedia to sign on for a 43,000-square-foot production studio in early 2017, CO previously reported.
However, the property, and the Long Island City office market in general, has struggled in recent years from the fallout of Amazon abandoning plans to open a second headquarters in the area, coupled with the COVID-19 pandemic spurring increased remote-work trends, according to sources.
The Blanchard currently sits at only 30 percent leased. Meanwhile, cable company Altice dropped out of its deal to lease the entire 130,000-square-foot Paragon after Amazon killed its Long Island City plans, TRD reported.
The OM noted that Blanchard is well “suited” for flexible industrial use as a last-mile logistics center given that industrial leasing in New York City’s outer boroughs saw 55 percent growth last year.
Officials at BrightSpire did not return a request for comment. Related, BGO and Newmark declined to comment.
Andrew Coen can be reached at acoen@commercialobserver.com.
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