43-01 21st Street – New Development
The long, twisty story of the office space at 43-01 21st Street has reached its pinnacle, and the 124,000-square-foot warehouse in Long Island City finally has a new owner.
But only thing we know is that the mystery buyer is from Chicago and the party is paying a hefty price tag of $43.5 million, recent public sales records showed.
Yet the events leading up to this sale have been more interesting.
First, The Wills Group, the original owner at the 43-01 21st Street property, was in contract in October 2014 with Rockrose Development to sell it the property, located a few blocks from Silvercup Studios. But contract fell through with the residential development king.
Then, the mystery buyer from Chicago and The Wills Group engaged. The two parties used a 1031 exchange purchase clause to make things a reality, city records revealed. The 1031 exchange clause is basically a swap of similar-type properties, and deferred the tax consequence for a sale.
According to the IRS Code, when parties used the 1031 exchange buyer clause, then “no gain or loss shall be recognized on the exchange of property held for productive use in a trade business or for investment, if such property is exchanged sole for property of like kind, which is to be held either for productive use in a trade or business or for investment.”
Yet the property won’t see much redevelopment, the Queens Brownstoner reported. The Wills Group told the Brownstoner that it will remain an office building without much renovations. The biggest reason — and most likely a deal breaker with Rockrose Development — is that the warehouse is built on strict zoning laws and could only be used for manufacturing — no possibility of residential build up.
The building is practically mere blocks outside the newly proposed Court Square residential rezoning.
UPDATE -Confirmed that Rockrose is the buyer of this property for $43.5 Million.