Bronx Industrial Project Gets $305M Boost
- Apr 03, 2020
The construction of 2505 Bruckner Blvd., a 1 million-square-foot, cutting-edge industrial project in Bronx, N.Y., gets a big boost as developers Innovo Property Group and Square Mile Capital Management LLC secure $305 million in financing for what will be the largest logistics facility in New York City.
“As in many U.S. metro areas, New York City’s need for well-located, last-mile distribution facilities has not been fully met,” Craig Solomon, CEO of Square Mile Capital Management, told Commercial Property Executive. IPG and Square Mile relied on Cushman & Wakefield’s Adam Spies, Adam Doneger, Steve Kohn and Alex Hernandez to shop the market for funding for the 2505 Bruckner project. The team ultimately secured construction loans from Bank OZK and EverWest Real Estate Investors’ Structured Finance platform.
IPG and Square Mile are erecting the multi-story building on the former site of Whitestone Multiplex Cinemas, a 20-acre property that the partners acquired from Extell Development Co. for $75 million in 2017. Located at the crossroads of five major highways, the site is within easy reach of Manhattan, Queens, Brooklyn, Long Island and Connecticut, and allows for access to roughly 9.4 million people within a 15-mile radius.
Timing: still right
Even though New York’s outer boroughs, which constitute one of the oldest industrial markets in the U.S., are riddled with antiquated industrial product, market conditions remained healthy throughout 2019, according to a report by Cushman & Wakefield. Demand from traditional warehouse users, e-commerce companies and logistics companies resulted in approximately 3.2 million square feet of leasing activity and an average vacancy rate of 4.9 percent. And even as the country faces drastic economic changes due to the debilitating spread of COVID-19, hard-hit New York is likely to see its industrial sector remain strong.
“The current pandemic has certainly exacerbated that need for sufficient supply-chain infrastructure, as demand for secure deliveries is threatening to far outstrip our warehouse space supply,” Solomon said. “This is not just a momentary spike in demand; it will continue to grow. Accordingly, we have established a focused last-mile property investment strategy and we will continue to seek more opportunities.” Work is already underway on 2505 Bruckner, with the partners having broken ground on the urban logistics facility in 2019. JLL is handling leasing for the KSS Architects-designed development, which is on track to deliver in the first quarter of 2022.