RXR Realty and its development partner LBA Logistics have closed on a $316 million construction loan to build a new Amazon distribution center in Queens.
JLL announced it arranged a financing for the partners Grand Logistics Center, a 1.1-million-square-foot, state-of-the-art, multi-story distribution facility in Maspeth, New York, and secured the lease with Amazon.
JP Morgan led the financing with $184.26 million in funding.
Situated at 55-15 Grand Ave., Grand Logistics Center is positioned at the crossroads of the Brooklyn Queens Expressway and Long Island Expressway. The building’s location provides access to Manhattan and the outer borough markets, making the tenant’s last-mile delivery strategy to service the 7.9 million residents within the New York City metropolitan area possible.
“With most of the major banks hitting pause during the
pandemic, the construction loan market became challenging, but we were highly
confident in the merits of the project despite the environment,” said Michael
Maturo, President of RXR Realty. “We were fortunate to identify a lead bank and
have multiple participants to fill out the syndication on a large loan with
optimal terms in this market.
“The attention to the opportunity is an indication of the
strength of the site, and the RXR/LBA sponsorship, as well as the quality of
the tenant,” he added. “It is a testament that the best-of-the-best projects
are still achieving attractive capitalization structures.”
“After exploring multiple capitalization structures with
alternative financing sources, we were pleased with the outcome of obtaining a
traditional construction loan of this size in an efficient process,” said Tom
Rutherford, LBA’s Principal of Finance.
The JLL Capital Markets team representing the borrower was
led by Executive Managing Directors Kevin MacKenzie and Mike Tepedino and
Managing Director Brian Torp.
The JLL Agency Leasing team that secured the lease for the
ownership was led by Vice Chairman Robert Kossar and Executive Managing
Director Leslie Lanne.
The COVID-19 pandemic and the shelter-in-place policies that ensued have accelerated e-commerce growth and the need for warehouse space across the nation. JLL anticipates e-commerce sales could hit $1.5 trillion by 2025, which would increase the demand for industrial real estate to an additional 1 billion square feet.
Grand Logistics Center is in the heart of New York City’s premier logistics submarket, Maspeth, which JLL Research reports in its New York Industrial Insight – Q3 2020 report has a 1.8% vacancy rate, and the New York City industrial market, which, in particular, is experiencing an ever-growing reliance on e-commerce and food and beverage delivery may be buoyed from some of the economic fallout driven by COVID-19. As a result, JLL’s outlook on the market remains cautiously optimistic for both the short- and long-term growth prospects.
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