What should a housing developer do if a pandemic unsettles the market? It was decided to expand in a neighborhood that was already inundated with housing projects.
Ascent Development has secured $ 48.2 million in new loans to build a 130-unit condominium in Long Island City, according to financial documents recorded Monday.
That’s 30 percent more apartments than in 2019 when Ascent first planned the building.
“During the pandemic, when everything slowed down and funding became more difficult, we went back to the drawing board and added more units,” said Ascent director Tien Vominh. The developer also added five stories to the 20-story project.
Construction is underway on the building at 45-30 Pearson Street. Ascent built the development site by purchasing eight lots over the past four years for $ 33.8 million, according to records.
But building more condos doesn’t guarantee that people will buy them – at least not right away.
“We’re not seeing enough absorption in the market to start selling this year,” said Vominh. “We’re basically writing off the rest of 2021.”
Condo developers aim to start sales at a time when they are strong enough to motivate potential buyers to act quickly.
Vominh expects sales to begin in 2022 and units to be shipped in 2023. Los Angeles-based Preferred Bank is the lender and Marvel Architects is the record-breaking architect.
Tom Zhidong Wu from development company ZD Jasper co-signed the home loan, although Wu is not a typical development partner of the project, said Vominh, who refused to elaborate. According to the ZD Japser website, Wu moved to New York in 1991 and started a computer company that sells and maintains PCs in the border triangle. Wu’s company referred questions to Ascent.
The new loans add to the $ 16 million already loaned by the limited liability company Pearson JV, which controls the project. Ascent submitted its condominium listing plan for the location in October 2019.
The building will be across from the Wolkoff family’s 5Pointz, a 1.3 million square foot project that will require developer G&M Realty to pay graffiti artists millions of dollars to whitewash their work on the iconic warehouse.
Long Island City has seen rapid growth for years as new residential high-rise buildings have been built to the left and right, and even the abandonment of Amazon’s plans to establish a headquarters there in 2019 didn’t slow the area’s dynamism. But then Covid led tenants to give up their apartments and skyrocketed vacancy rates.
Last summer, nearly 60 percent of the 1,945 condos completed in Long Island City since 2018 were unsold, according to real estate analyst Marketproof.
Vominh spoke to The Real Deal from Dallas, where the developer said of the booming real estate market in Texas, “It’s crazy down here.”
Corrections: This story has been reworked to show that the project site was built over four, not seven years, and that the plans were changed to add five stories, not one.