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Brightshore Capital has acquired DŌMI, a newly constructed 190-apartment property in Long Island City, Queens, using a $98.5 million acquisition loan from Affinius Capital.
The investment firm, formerly known as GTIS Partners, announced the purchase Monday. The property at 29-24 40th Avenue was bought through Brightshore’s Opportunity Zone Fund II from a joint venture of SB Development, Hazelton Capital Group and Avenue Realty Capital.
The $98.5 million figure is financing, not the purchase price. Brightshore’s announcement did not disclose what it paid for the property or identify an opening date.
Market-rate and affordable housing in Dutch Kills
DŌMI consists of two residential towers in the Dutch Kills neighborhood, with approximately 125,000 square feet of residential space and 4,876 square feet of retail space. Its 190 apartments comprise 133 market-rate units and 57 affordable units, according to the company.
Brightshore said the property benefits from a 35-year property-tax exemption through New York City’s 421-a Affordable New York program. That tax treatment is an important part of the investment’s economics, separate from the mix of rents the building can collect.
The company described amenities including a landscaped courtyard, rooftop terrace, fitness center, co-working lounge and entertainment spaces. It said multiple subway stations are within walking distance. Those are the buyer’s descriptions of the property, not a statement that residents have already moved in.
Buying completed construction rather than starting from scratch
Brightshore partner Ed McDowell said the deal offers a way to acquire a newly constructed property while reducing the entitlement and construction risks associated with building from the ground up. That does not remove leasing, operating or financing risks, but it changes the stage of development at which the fund is investing.
The firm said its investment thesis rests on New York’s limited housing supply, barriers to new construction and renter demand. Those are the buyer’s reasons for the acquisition, not a guarantee of future rent growth or investment returns.
The loan marks Brightshore’s first transaction with Affinius. Newmark advised on both the sale and acquisition financing, according to the release. The sale team included Eric Roth, Daniel O’Brien, Adam Spies and Adam Doneger; the financing team included Jordan Roeschlaub, Christopher Kramer and Max Ralby.
Brightshore said it has raised approximately $900 million across its first two Opportunity Zone funds for residential, industrial and mixed-use investments around the United States. The DŌMI purchase places an existing two-tower residential property inside that platform, with both market-rate and affordable apartments in one of Queens’ most closely connected neighborhoods to Manhattan.
JBizNews Desk | New York
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