Mortar is in the process of developing 11-32 31st Avenue, a property in Hallett’s Cove, a waterfront enclave on the western edge of Astoria, Queens. The property is an irregular shaped lot, with a long side yard exposure that faces the nearby waterfront. Local zoning, plus the purchase of neighboring air rights allows for construction of over 27,000 SF. Taking advantage of strategic zoning deductions, Mortar is currently planning an 8-story building, with a gross floor area of 31,000. This drives the acquisition price down to $180/SF, which is well below recent, comparable land sales in the area. 11-32 31st Ave. combines the downside protection of a low acquisition basis with the potential upside of a growing waterfront enclave, high-profile nearby investments, and excellent access to transportation. Underwritten as both a condominium and rental development, the project offers multiple, successful exit strategies.
Hallett’s Cove is a previously industrial waterfront edge that was reclaimed and transformed through the creation of Socrates’ Sculpture Park in the late 1980s. For some time, the area remained underdeveloped. While other neighborhoods along the Brooklyn- Queens industrial belt leveraged waterfront development into widespread real estate prosperity, Astoria a strong, pre-existing neighborhood thrived without enhancing the cove. Establishment of the Astoria NYC water ferry, greenway improvements, and the recent construction of two high-profile, mega developments have changed that dynamic. The Astoria NYC Ferry offers year-round, low-cost commuting with a direct route to Long Island City, East 34th Street, the Brooklyn Navy Yard, and Wall Street. The cove has been home to multiple successful projects over the last few years, including the Steinway Piano Factory condominium conversion and construction of the 22 story East River Tower. More recently, the Durst organization has completed and leased Hallett’s Point, a 22 story, 404-unit rental project just north of the cove. In addition, Cape Advisors is well under way on their construction of a 3-building, 500-unit project immediately across the street from the subject property. The combination of new transportation links and high-profile investments have already begun to solidify the neighborhood into a desirable, residential location.
Construction began in late 2021, and expected to take 24 months to complete. Leasing and sales will commence upon construction completion.
Mortar’s strategy has a two tiered approach with a goal to manage risk, while maximizing investor returns. Our risk analysis reviews potential exit scenarios at the completion of construction, all of which can be executed based on market conditions. For 11-32 31st Ave., our primary exit option is to fully lease the building. Once stabilized, the building will then be sold as an income producing asset. However, if the condominium market is favorable at the time of completion, we will consider pivoting to individual condominium unit sales.