Investment firm Brickman sells Long Island City, Queens, office building at47-25 34th Street for $90 million

Real estate investment firm Brickman is selling a Long Island City office building for $90 million, 50 percent more than it purchased the 342,000-square-foot property for two years ago.

The firm is in contract to sell the four-story commercial building, located at 47-25 34th St., to a partnership between Metropolitan Realty Associates and the investment firm TIAA. Adam Spies, Doug Harmon, Adam Doneger and Joshua King, brokers at Eastdil Secured, marketed the property and arranged the sale.

According to Steven Klein, Brickman’s chief investment officer, the firm decided to sell the property in order to capitalize on the sharp increase in commercial property values in the Queens area and also to direct its focus on other nearby commercial buildings it owns.

Brickman, in partnership with hedge fund manager Dan Loeb, is converting a nearby warehouse at 30-02 48th Ave. into creative offices. It is making similar upgrades at 35-11 9th St., a 100,000-square-foot building it bought last year in Astoria. The company is also a partner in a project to transform a warehouse in Ridgewood, Queens, into offices.

“For us it was a good time to sell,” Klein said. “It allows us to capture the value in this neighborhood and also direct our attention to our other projects.”

Tenants have flocked to neighborhoods like Long Island City for hip office space that is less expensive than parts of Manhattan like Midtown. 

“If you’re a tenant in Chelsea, you could easily pay $60 a foot in rent in a side-street building, whereas in Long Island City, you can pay $40 per square foot for a newly renovated building filled with amenities and receive incentives from the city that will discount that down to $30 per square foot,” Klein said. “For a 20,000-square-foot tenant, that could mean up to $600,000 a year in rent savings. It’s very compelling to tenants.”

The growing popularity of office markets in the boroughs outside of Manhattan has, in turn, fueled interest from real estate investors, who have increasingly sought to develop office properties or, more often, convert former industrial buildings to cater to the demand.

“When we bought 47-25 34th St. a few years ago, people might have thought we were idiots because we were one of the few investment groups in the neighborhood,” Klein said. “Now there’s a deep bench of investment firms like Vornado, Related and RXR buying buildings there.”

Metropolitan Realty Associates and TIAA plan to invest more than $10 million to upgrade 47-25 34th St. into modern office space. About 55 percent of the building is currently vacant and the remaining portion is used as warehouse and showroom space, sources said. Klein said he is not worried that Long Island City will be flooded with office space.

“All the investment is a good thing,” he said. “It’s an affirmation that there’s a lot of demand from tenants and that all the people living in these neighborhoods will want to work in them too.”