Fresh Direct nets $48mn for Long Island city site

Bloomberg

Online grocer Fresh Direct LLC sold its longtime home in the Long Island City section of Queens to a developer, drawing an outsized price for a property in a rapidly gentrifying area, even though it can’t be converted into residences.
The 276,705-square-foot warehouse at 23-30 Borden Ave. was sold for $48 million, according to a person with knowledge of the property. The buyer is Atlas Capital Group LLC, an owner and developer of office, residential and retail properties in New York, Los Angeles and Miami, said the person, who asked not to be identified because the deal hasn’t been made public. The price is the second-highest ever paid for an industrial property in Queens that isn’t being turned into homes, according to research firm Real Capital Analytics Inc.
In a neighborhood across the East River from Manhattan where new luxury apartment and condominium towers are remaking the skyline, the Fresh Direct warehouse is located in a manufacturing zone where homes can’t be built.
“While immediate conversion or redevelopment of the property is not feasible, the rapid repositioning of Long Island City’s industrial/warehouse and manufacturing properties makes the prospect of future redevelopment highly likely,” according to the documents prepared by the marketing brokerage. The Cushman & Wakefield brokers listing the site — Bob Knakal, chairman of New York investment sales, and David A. Chkheidze — declined to comment on the deal.

Zoning Changes
Most of the priciest warehouse purchases in Queens have been by investors seeking to convert the properties to homes, according to Jim Costello, senior vice president at New York- based Real Capital. Residential developers have been flocking to Long Island City after the 2001 rezoning of 37 blocks east of the waterfront abutting the Sunnyside Yard rail depot. The changes allowed higher-density towers within the manufacturing hubs of Queens Plaza and Court Square.