NORTHERN BOULEVARD PROJECT SUMMARY
RKO Keith's Theater is a historic RKO Pictures movie theater located in Flushing Chinatown, Queens, New York City. It was designed by noted theater architect Thomas W. Lamb (1871‑1942) and built in 1928. The three‑story building’s simple façade houses a Spanish Baroque Revival inspired auditorium.
The RKO Keith’s Theater, located at 135‑35 Northern Blvd, Queens, New York, was popular for many years. In the late 1980’s, the Flushing area of Queens went through a difficult financial time leaving the area rundown and some parts abandoned. The theater was purchased by a Chinese businessman who had the property landmarked before it was sold to an African/Israeli investment group. The investment group spent millions of dollars on engineers, historic preservation work, entitlements and planning of the project. In 2005‑2006, they were able to rezone the property from a 2.4 FAR (Floor Area Ratio) to a 7.5 FAR, an exceptional change increasing the buildable area substantially to 405,095 Square Feet. They also worked with the New York Historic Preservation Council to amend the Landmark status protecting the lobby and leaving the remainder of the property available for demolition, allowing for a brand new building to be built around the historic lobby.
In 2008, the unfortunate collapse of the economy coupled with the halting of all new construction projects nationwide, caused this investment group to lose the property to the Doral Bank via foreclosure in 2010. Investor Patrick Thompson purchased the property from the Doral Bank in 2010 with the goal of developing apartments on the site. Regrettably, he was unable to procure the necessary bank debt due to the unstable real estate market. The property was put up for sale in 2011. Jerry Karlik was immediately interested in the project in 2011. The deal has taken nearly 2 years to complete due to competitive bidding, a lack of urgency on the part of the seller, and pricing. In the fall of 2013, Jerry Karlik was able to place the property under contract for $30 million with a closing date of December, 2013. Also included is a recently completed Broker’s Opinion of current property value, assessing the property at just above $41 million, substantially higher than its purchase price of $30 million.
This project presents an immediate opportunity to redevelop the existing property into a 405,095 square foot, 16 story mixed use building featuring 357 condominiums, 23,373 square feet of retail space, a 15,857 square foot community facility and 385 parking spaces. The historic lobby will be preserved and used as the lobby to the new modern property, maintaining the historic charm. The Property is situated in Flushing Chinatown within steps to public transit and in close proximity to major highways. Flushing’s surrounding neighborhoods include Manhattan (5 miles) and Long Island (5 miles).
Karlik anticipates that construction plans will be complete by Q2 2014, at which time demolition and construction will commence; the project is expected to take approximately 24 months. Projected average sales price is $800 per square foot for the condominiums, $900 per square foot for the first floor retail space, $500 per square foot for the community space, and $60,000 for each parking space. Pre-sales are anticipated to be very strong as our pricing will be very competitive with the Flushing market. Today, “Class A” condominium sales range from $700-$900 per square feet. The total price to purchase and renovate the property is approximately $155 million. SMB Equity and JK Equities will represent 25% of the total equity ($20 million) and will be equal partners for their 25% share of the project. JK Equities will be the construction manager on the project and will work with the three other equity investors, each contributing 25% on the project.
The New York City residential real estate market is stronger today than it has ever been with new condominium buildings selling for full asking price and selling out pre-construction. The current average price for a Manhattan apartment is close to $1,400 per square foot. New York City construction is anticipated to reach $33 billion in 2014, shattering the previous high in 2007 of $31.1 billion. It has become increasingly difficult to purchase an apartment in Manhattan.