Longfellow Real Estate Partners sold its Hatch Life Sciences Building in Long Island City, Queens, for $86.9 million, below the $92.5 million the firm paid for the property in 2021. The transaction marks Longfellow's first New York City project sale and caps a development effort that included $120 million in additional investment to convert the building into lab and office space.

The building spans more than 208,000 square feet and was formerly a parachute manufacturing plant. Longfellow converted the property into life sciences labs and offices following its acquisition three years ago.

Pearl Realty Management represented the buyer in the transaction. The buyer's plans for the property remain unclear, but the firm has been active in the Long Island City market with other recent office building acquisitions.

The sale price represents a roughly 6% discount to Longfellow's original purchase price, even after the developer's substantial capital investment in repositioning the asset. The firm spent $120 million on the conversion and redevelopment work.

Long Island City has emerged as a secondary market for life sciences real estate in New York City. The neighborhood offers lower prices than Manhattan and has attracted developers seeking to capitalize on demand for lab space.

Longfellow Real Estate Partners specializes in life sciences real estate development and investment. The firm has built a portfolio of lab and office properties in markets including Boston, San Francisco, and the Research Triangle.

The Hatch Life Sciences Building sale comes as office and lab property valuations face pressure from higher interest rates and tighter credit conditions. Developers who acquired assets in 2021 near the market peak are confronting repricing as properties trade hands.

Pearl Realty Management has been expanding its footprint in Long Island City. The firm's other recent office building acquisitions in the submarket suggest it sees value in the area despite current market headwinds.