Item 2. Properties
ITEM 2. PROPERTIES
The following table shows the location, approximate size (excluding parking garages) and occupancy of each of our properties as of December 31, 2023.
Square Feet Weighted
Under Average
Development or Escalated
Land Total In Not Available Occupancy Annual Expiration
Property Acreage Property Service for Lease Rate Rent PSF (1)
Tenants Date (2)
Operating Properties:
731 Lexington Avenue
New York, NY
Office 939,000 939,000 — 100.0 % $ 135.44 Bloomberg L.P. 2029
Retail 83,000 83,000 — The Home Depot 2025
45,000 45,000 — Various Various
12,000 12,000 — Vacant N/A
140,000 140,000 — 90.3 % 252.89
1.9 1,079,000 1,079,000 — 98.9 % 147.65
Rego Park I
Queens, NY
112,000 112,000 — IKEA (3)
2024
50,000 50,000 — Burlington 2027
36,000 36,000 — Marshalls 2032
16,000 16,000 — Old Navy 2024
124,000 — 124,000 Vacant N/A
4.8 338,000 214,000 124,000 100.0 % 53.08
Rego Park II
Queens, NY
145,000 145,000 — Costco 2034
133,000 133,000 — Kohl’s (4)
2031
194,000 194,000 — Various Various
144,000 144,000 — Vacant N/A
6.6 616,000 616,000 — 76.9 % 70.28
Flushing
Queens, NY (5) 1.0 167,000 167,000 — 100.0 % 32.82 New World Mall LLC 2037
2,200,000 2,076,000 124,000 92.6 % 107.78
The Alexander apartment tower, 312 units
Queens, NY — 255,000 255,000 — 95.2 % 49.35 (6) Residential (7)
2,455,000 2,331,000 124,000
(1) Represents the weighted average escalated annual rent per square foot, which includes tenant reimbursements and excludes the impact of tenant concessions (such as free rent), as of December 31, 2023. For a discussion of our leasing activity, see Item 7 - Overview - Square Footage, Occupancy and Leasing Activity.
(2) Represents the year in which the tenant’s lease expires, without consideration of any renewal or extension options. Lease expiration dates are based on non-cancelable lease terms and do not extend beyond any early termination rights that the tenant may have under its lease.
(3) On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030. The lease included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term. On September 27, 2023, we entered into a lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024. Under the lease modification agreement, IKEA will pay its remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term.
(4) Subleased through remaining original lease term.
(5) Ground leased through January 2027 with one 10-year extension option.
(6) Average monthly rent per unit is $3,394.
(7) Residential tenants generally have one or two year leases.
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Operating Properties
731 Lexington Avenue
731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59 th Street, Third Avenue and East 58 th Street in Manhattan, New York, and is situated in the heart of one of Manhattan’s busiest business and shopping districts, with convenient access to several subway and bus lines. The building contain s 939,000 and 140,000 of rentable square feet of office and retail space, respectively. Bloomberg occupies all of the office space. The Home Depot (83,000 square feet) is the principal retail tenant.
The office portion of 731 Lexington Avenue is encumbered by a mortgage loan with a balance of $500,000,000 which matures in June 2024. The interest-only loan was at LIBOR plus 0.90% through July 15, 2023 and currently bears interest at the Prime Rate (8.50% as of December 31, 2023) through loan maturity. In June 2023, we purchased an interest rate cap for $11,258,000, which capped LIBOR at 6.00% through July 15, 2023 and caps the Prime Rate at 6.00% through loan maturity.
The retail portion of 731 Lexington Avenue is encumbered by a mortgage loan with a ba lance of $300,000,000 wh ich matures in August 2025. The interest-only loan is at SOFR p lus 1.51% which was swapped to a fixed rate of 1.76% through May 2025.
Rego Park I
Rego Park I, a 338,000 square foot shopping center, is located on Queens Boulevard and 63rd Road in Queens, New York. The center is anchored by a 50,000 square foot Burlington and a 36,000 square foot Marshalls. The center contains a parking deck (1,241 spaces) that provides for paid parking.
On December 3, 2022, IKEA closed its 112,000 square foot store at our Rego Park I property under a lease that was set to expire in December 2030. The lease included a right to terminate effective no earlier than March 16, 2026, subject to payment of rent through the termination date and an additional termination payment equal to the lesser of $10,000,000 or the amount of rent due under the remaining term. On September 27, 2023, we entered into a lease modification agreement with IKEA which accelerates its lease termination date to April 1, 2024. Under the lease modification agreement, IKEA will pay its remaining rent due through March 16, 2026 and the $10,000,000 termination payment over the modified lease term.
On April 23, 2023, Bed Bath & Beyond ($1,533,000 of annual revenue) filed for Chapter 11 bankruptcy and its 46,000 square foot lease at the property was rejected in the bankruptcy proceedings on July 31, 2023.
Rego Park II
Rego Park II, a 616,000 square foot shopping center, is located adjacent to the Rego Park I shopping center in Queens, New York. The center is anchored by a 145,000 square foot Costco and a 133,000 squ are foot Kohl’s, which has been subleased. The center contains a parking deck ( 1,326 spaces ) that provides for paid parking.
This center is encumbered by a mortgage loan in the amount of $202,544,000 which matures in December 2025. The interest-only loan is at SOFR plus 1.45 % (6.80% as of December 31, 2023). In connection therewith, we purchased an interest rate cap with a notional amount of $202,544,000 that caps SOFR at a rate of 4.15% through November 2024.
Flushing
Our Flushing property is located on Roosevelt Avenue and Main Street in the downtown, commercial section of Flushing, Queens, New York. Roosevelt Avenue and Main Street are active shopping districts and there are many national retailers located in the area. A subway entrance is located directly in front of the property with bus service across the street. The property comprises a four-floor building containing 167,000 square feet and a parking garage, which is subleased to New World Mall LLC through January 2037. The property is ground leased through January 2027 with one 10-year extension option.
The Alexander Apartment Tower
The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet.
The property is encumbered by a mortgage loan in the amount of $94,000,000 which matures in November 2027. The interest-only loan has a fixed rate of 2.63%.
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ITEM 3. LEGAL PROCEEDINGS
We are from time-to-time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation with our legal counsel, the outcome of such pending matters will not have a material effect on our financial condition, results of operations or cash flows.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II