XIN Development Group International has acquired a parcel of land in Flushing, Queens, for $66 million in an all-cash transaction. XIN was able to expedite the deal’s timeline by funding with all cash, but will be in the market for construction financing shortly.
The land, which includes the RKO Keith’s Theater, was previously owned by JK Equities.
Cushman & Wakefield marketed the deal, which closed on July 29—only two months after its inception, and only 30 days after contract-signing. “We wanted to get it done really fast,” said Can Tavsanoglu, the director of acquisitions and finance at XIN Development Group. “We will also be in the market for a construction loan when the time comes, likely in six months or so.”
The land is located at 135-35 Northern Boulevard in Flushing, and allows for a mixed-use development comprising approximately 372,598 buildable square feet. XIN has hired architect Pei Cobb Freed & Partners to design the 269-unit project, which will include a gym, tenant lounge, a 305-space parking garage and landscaped courtyard as well as ground- and second-floor retail space.
“Downtown Flushing is a very appealing market and has surprising demographics,” said Tavsanoglu. “It’s the second-largest Chinatown outside of China, and the intersection of Roosevelt Avenue and Main Street is the third-busiest intersection in the U.S.”
Tavsanoglu also spoke to the imbalance of demand and supply in Flushing. “There is a clear shortage of purpose-built, amenity-rich, higher-end product. That demand and shortage of inventory was clearly proven by the strong sales that Skyview Park and Flushing Commons achieved recently—just staggering numbers and incredible velocity.”
The land basis and overall deal basis also made sense to XIN, as opposed to sky-high land prices and basis in Manhattan, Tavsanoglu said.
The interior of the RKO Keith’s Theater is landmarked. XIN plans to preserve and restore it, and incorporate it into the development’s design. “Even though it is a dilapidated building with a lot of damage and it hasn’t been used since the 1980s, it looks very cool. When restored, I think it’s going to be one of the most exciting projects in New York City,” said Tavsanoglu.
While other firms are slowing down for the summer, XIN is now working on a hat-trick of projects. In addition to the Flushing development, XIN is simultaneously finishing up construction on The Oosten a 216-unit condo development a couple of blocks south of the Williamsburg Bridge at 429 Kent Avenue, and about to break ground on 615 10th Avenue in Hell’s Kitchen—a 85-unit residential condo property with 40,000 square feet of retail space underneath. Herrick Feinstein represented XIN in both the Flushing acquisition and the Hell’s Kitchen project.
“This Flushing property was attractive to XIN because it is a “shovel-ready” project, which means there are building permits and other approvals already in place for construction of the condo project,” said Christina Ying, a partner in Herrick Feinstein’s real estate department who led the transaction along with Belinda Schwartz, chair of Herrick’s real estate department. “An acquisition of this nature, however, requires a greater level of due diligence, which Herrick and the XIN team were able to complete in a short amount of time.”
Although XIN will be in execution-mode for some time, the firm won’t shy away from attractive acquisition oppportunities, should they present themselves. “We like up-and-coming neighborhoods with a shortage of high-quality product,” explained Tavsanoglu. “We like building lifestyle properties, and only invest in opportunities that make sense to us. We ask ourselves, ‘Will we be proud of this deal, and is it financeable?’ We are a foreign-origin firm, but we think like a local developer.”