Innovo Lands $345M Recap for Long Island City Warehouse
Firm to build third multi-story mega-project in NYC with $1B in backing.
Innovo Property Group has solidified its position as the leading NYC-based builder of multi-story industrial warehouses by securing a $345M recapitalization that includes construction financing for a six-story industrial building in Long Island City.
Axos Bank and Cerberus Capital Management are providing construction financing for the project, located at 28-90 Review Avenue. Innovo bought the site from JBL Asset Management in 2020 for $34M.
Goldman Sachs Asset Management’s Urban Investment Group is partnering with Innovo to provide equity in the deal, the companies announced this week. A JLL team arranged the debt and equity.
Innovo is planning to build a 682K SF multi-story industrial facility at the site, along with a parking garage. The warehouse, which will offer 60K SF floor plates for tenants, is slated to be delivered at the end of 2025.
The Long Island City project is the third industrial mega-project Innovo has undertaken in NYC in the past year, amassing financial backing totaling more than $1B.
Last month, Innovo and Affinius Capital landed $334M in financing from Bank OZK and PIMCO for a 1.1M SF industrial campus at 2505 Bruckner Boulevard. Amazon inked a deal in October for 569K SF of space at the facility.
Last year, Innovo secured a $435M recap for a five-story, 842K SF warehouse it is building at 23-30 Borden Avenue in Long Island City, with delivery slated for Q2 2024.
After a historically busy 2022, leasing momentum in NYC’s industrial market carried into the first quarter despite continued macroeconomic uncertainties.
Leasing velocity reached 559K SF in Q1 2023, with 65% of the activity concentrated in Brooklyn, according to JLL’s Q1 2023 industrial market report.
The strength across the leasing market has held the industrial vacancy rate at 1.8%, one of the tightest markets in the US.
A 655K SF lease by IAA at DHPH’s lot at 1900 South Avenue in Staten Island, pushing industrial outdoor storage leasing velocity to a record level in the first quarter.
Sales volumes remained off their peaks due to continued challenges in the capital markets. Q1 industrial sales volume was 48.5% below the four-year trailing average of $310M and 69.5% below the 2022 quarterly average, JLL’s report said.
“The current capital markets transaction environment remains challenged as pricing gaps between buy side and sell side equity persists mainly due to the availability and cost of debt capital,” JLL said.