2959 Northern Blvd (“Sven”) – Acquisition/Financial Case Study (Long Island City, NYC)

In this case study, we analyze 2959 Northern Blvd (“Sven”)—an interesting 70‑story skyscraper—and its economic fundamentals within the Long Island City multifamily market.

Executive Summary

• Trophy Class A Asset: Sven is a newly constructed (2022) 70-story, 958-unit luxury apartment tower in Long Island City (LIC), Queens. The property achieved 94–96% occupancy through 2024 (vacancy ~3.9%), outperforming the LIC Class A submarket (vacancy ~14.5%). With average rents of ~$4,867/unit (≈$7.42/SF), Sven commands a rent premium ~13% above the LIC 4–5 Star average. Concessions are minimal at 0.5%, well below peers.

• Strong NOI, High Margin: The property generated $30.2 M Net Operating Income (NOI) in 2024 on effective gross revenue of ~$42.4 M. Operating expenses run low (~27% of revenue), aided by nominal property taxes (likely due to abatements, only ~$400/unit/year). Sven’s NOI margin (~72%) is well above typical NYC multifamily levels, underpinning its robust cash flow.

• Market-Relative Valuation: Recent LIC multifamily cap rates average ~4.5%–5.0%. Sven’s appraisal in early 2024 was $708.2 M implying $740K per unit and a ~4.3% cap rate (based on 2024 NOI) – a pricing premium (lower cap rate, higher $/unit) relative to submarket averages ($658K/unit, 4.5–5% cap). This premium valuation reflects the asset’s trophy quality and superior performance. At a more typical market pricing (~$658K/unit), the implied cap would be ~4.8%, indicating Sven would trade at a tighter yield than peers – i.e. investors are paying up for its stable income and rent growth potential.

• Submarket Context: Long Island City’s rental market is in a supply-driven soft patch: roughly 4,000 units delivered vs. 1,500 absorbed in the past year, pushing Class A vacancy to ~14–15%. Despite this, demand remains solid – stabilized vacancy is ~5–6% metro-wide and LIC rents still grew modestly (~1–3% YoY). Sven’s lease-up success (maintaining ~96% occupancy with minor concessions) indicates outperformance amid heavy supply. Going forward, about 1,400 units are under construction in LIC, so elevated vacancy may persist short-term; however, CoStar forecasts vacancy stabilizing near historical norms (~5–6%) as new supply tapers and absorbs Investors should monitor luxury segment risk – in a downturn, buildings with $5K+ rents face more vacancy pressure – but Sven’s transit-proximate location and relative affordability vs. Manhattan should support continued strong absorption.

• Acquisition Outlook: In September 2024, Sven traded in an investment sale (price undisclosed) likely consistent with the above valuation. The buyer secured a $450 M loan at 6.33% interest-only, implying an initial NOI DSCR of ~1.04× – a thin coverage indicative of high leverage and confidence in NOI growth (or future rate declines). Given Sven’s above-market rents, occupancy, and quality, the asset appears to justify a pricing premium; however, at the acquired cap rate (~4.3%) the new owner is accepting a lower going-in yield relative to typical LIC deals. This bet likely rests on long-term rent growth (LIC’s demand drivers and improving market conditions) and the property’s durable appeal to renters. In summary, Sven offers a stabilized, institutional-quality cash flow in a burgeoning LIC market – albeit at a valuation that assumes it will continue to outperform the broader submarket.

Property Overview

2959 Northern Blvd “Sven” is a 5-Star high-rise multifamily asset located in the LIC submarket of Queens, NYC. Key property characteristics are:

• Scale & Class: A single 70-story, 958-unit luxury apartment tower completed in 2022. It’s among the largest residential buildings in Queens (882,579 SF gross building area), developed by The Durst Organization (also the current owner/manager). The property includes a small retail component (~11,855 SF, ~1.3% of GBA) at the base.

• Unit Mix & Rents: The building offers predominantly studio and one-bedroom units (average unit size ~592 SF), with some larger 2BR and a few 3BR units. As of mid-2025, the average asking rent is ~$4,867 per unit (studio ~$3.5K, 1BR ~$4.7K, 2BR ~$6.1K). This equates to roughly $7.42 per SF, reflecting the premium finishes and amenities of a new Class A high-rise. Notably, concessions average just 0.5% of rent (about half a week free on an annual lease), indicating strong leasing demand for the property.

• Occupancy: Sven is effectively stabilized at 96.1% occupied (only ~3.9% vacancy). Its occupancy improved slightly year-over-year (vacancy down 0.4 ppt) despite the influx of new supply in the area. Current vacant units are minimal and likely turnover units given the high lease rate. For context, Sven’s occupancy vastly exceeds the LIC Class A submarket average (~85.5% occupied), as detailed in the benchmarking below.

• Operations & Cash Flow: According to 2024 financials, Sven achieved Effective Gross Income (EGI) of $42.4 M and NOI of $30.2 M. The property’s expense burden is low (27% of EGI), due in part to unusually low real estate taxes (CoStar reports taxes at ~$383.9K annually 3x, under a tax abatement program, equating to ~$78/unit/year). As a result, NOI margin is ~72%, supporting significant debt capacity. Indeed, in June 2024 the owner refinanced with a $450 M CMBS loan at 6.33% interest (interest-only) The appraisal at that time valued the asset at $708.2 M. These figures imply a debt yield ~6.7% and NOI debt service coverage of 1.04× on interest-only debt – manageable but leaving little room for error until rents grow further.

Submarket Benchmarking: Sven vs. Long Island City Peers

Despite an overall softening in the LIC luxury apartment market (due to rapid supply growth), Sven’s performance metrics stand out positively. Table 1 compares key indicators for Sven versus the LIC 4–5 Star submarket and the broader NYC market:

Benchmarking Sven against the LIC submarket and NYC market. (1) Prime Manhattan Class A cap rates ~4.0% for comparison.

Discussion: Sven achieves much higher occupancy than the LIC Class A norm – 96% vs 85%. This contrast highlights Sven’s successful lease-up and desirability relative to competing new buildings (the submarket’s 14.5% vacancy indicates many newer units remain unleased). Additionally, Sven’s asking rents (~$4,867) are roughly 13% above the submarket’s Class A average ($4,318), placing it at the top of the market’s rent spectrum. Notably, Sven’s rents dipped ~3.9% in the past year – likely a strategic adjustment during initial lease-up or to stay competitive as massive new supply hit the market – whereas overall Class A rents in LIC rose ~2.7% YoY. Even so, Sven maintains a rent premium, indicating superior unit finishes, amenities, or views justifying higher pricing. The property has also needed fewer concessions(0.5% vs ~1.6% average) to achieve its lease-up, underscoring strong tenant demand for this asset.

On the valuation side, if we benchmark by CoStar’s modelled market price of ~$658K per unit in LIC Sven’s implied value (~$740K/unit) is ~12% higher. The cap rate inferred from Sven’s appraisal (~4.3% on 2024 NOI) is at the low end of the LIC market range (4.5–5.0%), meaning investors are accepting a slightly lower yield for Sven’s quality. By comparison, average NYC metro multifamily cap rates are in the low-4% for prime assets (Manhattan trophy buildings even ~4% or below). Thus, Sven’s cap rate sits between typical LIC and Manhattan levels, reflecting its status as one of the premier outer-borough assets. In short, Sven appears to be priced at a moderate premium to the LIC market – warranted by its better performance metrics – but still offers a higher cap rate (and hence a pricing discount) versus Manhattan-core multifamily, potentially attractive to yield-seeking investors.

Cap Rate and Acquisition Analysis

Market Cap Rates: As of mid-2025, investment yields in Long Island City average 4.5%–5.0% for multifamily, according to CoStar. This is a notable uptick from the ultra-low rates of 2021–22, reflecting higher interest rates and supply concerns. The past year saw very few large sales in LIC (only smaller walk-up apartment transactions were recorded, at ~$156–262K/unit and cap ~2.7% for fully occupied townhouses – not representative of institutional assets). CoStar’s analytics estimate the “market” sale price in LIC at ~$657K/unit (Q2 2025), up ~7% YoY, but again, this is more of a model-driven value given limited recent trades of big projects. The key market proxy is that new Class A towers in LIC are expected to trade around mid-4% cap rates – a bit higher than Manhattan, given outer-borough location and recent supply headwinds, but still relatively low due to strong New York City rental demand and institutional interest in the submarket.

Sven’s Implied Cap & Value: Applying the above to Sven’s financials, we evaluate whether the asset is priced at a discount or premium:

• NOI Basis: Sven’s 2024 NOI is $30.2 M. If we capitalize this at a 4.5% market cap rate, the implied value is ~$671 M (≈$700K/unit). At a 5.0% cap, value is $604 M ($630K/unit). Sven’s appraised value of $708.2 M falls above even the 4.5% cap scenario – in fact, it implies a cap rate of ~4.27% (30.2/708.2). This suggests the asset was underwritten/purchased at a yield slightly tighter than prevailing market (i.e. a pricing premium). In per-unit terms, the appraisal ~$740K/unit vs. market ~$658K/unit indicates ~12% premium pricing. However, it’s important to note that Sven was in lease-up through 2023–24; the 2024 NOI may not represent fully stabilized earnings. By late 2024, occupancy ramped up to 96% and rents were still increasing on new leases, so investors likely pro forma a higher stabilized NOI (perhaps $33–34 M) once all units reach full market rent. On a forward NOI of ~$33 M, the $708 M value equates to a ~4.65% stabilized cap rate – much closer to the 4.5–5% market range. In this light, Sven’s pricing can be seen as fair to slight premium: the buyer paid a full price based on future stabilized income, but not egregiously above market norms for a turnkey trophy asset.

• Going-In Yield vs Debt Costs: One concern in the acquisition is the narrow interest coverage initially. With a $450 M loan at 6.33% (IO), annual interest is ~$28.99 M, barely covered by the $30.2 M NOI (1.04× DSCR). This implies negative leverage (interest rate > cap rate) at closing – the investor’s cash yield is effectively zero after debt service. Such a situation suggests the buyer accepted short-term cash flow tightness, likely betting on (a) NOI growth in coming years (via rent increases to create positive leverage), and/or (b) refinancing at lower interest once rates come down. It underscores that the acquisition, at the price paid, was a long-term strategic play rather than a cash-on-cash yield play in the short term. Many institutional buyers will proceed with low initial yields for a premier asset in a high-growth location like LIC, expecting rent appreciation and stabilization to improve returns over time.

• Rent Levels and Revenue Upside: Relative to market, Sven’s rent levels are already high – 13% above submarket average – so the upside will depend on market rent growth in LIC and the property maintaining its premium. The submarket did see positive rent growth (+2% to +3% YoY recently) even amid elevated vacancy, suggesting resilient demand. As competing buildings fill up and if broader NYC rents keep rising (NYC saw ~1–2% rent growth YoY in early 2025), Sven could likely push rents back up (recovering the ~3.9% dip it took) and then some. Each 1% rent increase adds roughly $0.5M to NOI for Sven, so moderate growth can significantly boost its future yield. Conclusion on Pricing: If Sven’s stabilized cap rate (in-place yield) normalizes to ~4.6–4.7% in a year or two, and if market cap rates hold around ~4.75%, the buyer will have paid only a slight premium for a top asset. If rents outperform or cap rates compress (e.g. to ~4.25% in a lower-rate environment), the investor stands to gain substantial appreciation. Conversely, if leasing faltered or cap rates softened above 5%, then the premium paid could become a drawback. At this stage, though, the pricing appears justified by Sven’s quality and the expectation of continued outperformance within its submarket.

Market Trends & Outlook in LIC Multifamily

The Long Island City submarket is one of the fastest-growing residential markets in New York, characterized by a surge in new supply over the past decade. This growth offers both challenges and opportunities for an asset like Sven:

• Supply Wave and Vacancy: LIC has seen an unprecedented number of deliveries. Over 16,000 units were added in the past 10 years, transforming the skyline. In the past 12 months alone ~4,000 units delivered while only ~1,500 units were absorbed, causing vacancy to rise sharply. As of Q2 2025, overall LIC vacancy stands ~12.2% (including lease-ups), with Class A (4–5 Star) vacancy at 14.5%. This is well above the submarket’s historical average (~5.6% stabilized vacancy) and reflects many new buildings still in initial lease-up. Sven benefitted from being delivered in early 2022 – giving it a head-start to stabilize before the bulk of 2023-24 supply hit. Going forward, the pipeline is tapering: roughly 1,341 Class A units are under construction in LIC now (about 1,400 overall, a steep drop from previous years). Deliveries are expected to slow, which should allow absorption to catch up. Indeed, CoStar projects vacancy will rise slightly in the near term but then trend back toward ~6% as the new supply is absorbed in coming years. For Sven, a stabilized incumbent asset, this means competition from shiny new buildings will persist in the short run (keeping leasing competitive), but the worst of the oversupply may be passing.

• Demand & Absorption: Renter demand in LIC remains robust thanks to strong employment and the submarket’s appeal. New York City added 74,000 jobs in the past year, and many of those workers seek urban housing. LIC’s population is growing (Queens population +1% YoY) and its location advantages are significant: just one subway stop from Midtown Manhattan, multiple transit lines (8 subway lines through LIC), and new high-end apartments at a discount to Manhattan rents. These factors have kept absorption positive even in high-supply years. For example, 2025 is on pace to absorb ~2,450 units (annualized) in LIC, roughly matching the ~2,200 units delivered – a much healthier supply-demand balance than 2024’s (970 absorbed vs 2,084 delivered). Sven itself leased up quickly (achieving ~90% occupancy by mid-2024), indicating it captured more than its fair share of demand. As the newest buildings compete, we expect concessions to remain a key tool – already concession usage in LIC has risen(averaging ~1–2% of rent, up from near-zero during tighter markets). Sven’s ability to hold very low concessions (0.5%) may be tested if new projects offer aggressive specials, but so far its leasing momentum suggests a strong tenant preference for this property (possibly due to the developer’s reputation, amenity package, or unit finishes). In sum, absorption prospects for Sven are positive given LIC’s continuing draw of renters priced out of Manhattan and the slowing new supply after 2025.

• Rent Growth and Rates: Despite the vacancy rise, asking rents in LIC are at record highs (~$4,210/month on average)file-pdffry69dj3yt3ykmg1zvm. Rent growth has moderated to ~1–3% annually recently after double-digit post-pandemic surges in 2021–22. The influx of new luxury units has introduced more concessions, softening effective rent growth to 1%. Still, LIC’s rents outperform the national average growth and far exceed the metro NYC average rent ($3,340). For high-end properties like Sven, rents around $5,000+ are achievable (its 2BR and 3BR units command $6K–7K). CoStar notes a risk that if hiring in high-income sectors (tech, finance) slows, luxury properties (>$5K rent) could face more vacancy pressure. This is a pertinent caution for Sven: its rent levels mean its target tenants are affluent and could thin out in a recession. However, absent a major downturn, the outlook for rent growth is stable – forecasts call for a gradual upward trajectory in rents in LIC, supported by the submarket’s transit accessibility and relative value versus Manhattan. Moreover, city initiatives to boost housing production could eventually alleviate supply constraints, but in the medium term, LIC’s pipeline is known and after the current wave, new additions will be more measured.

Bottom Line: Long Island City’s multifamily market in late 2024 is at an inflection point – short-term oversupply has elevated vacancy and tempered rent growth, yet fundamentals remain strong in terms of demand. Sven’s performance – high occupancy, minor concessions, rent premium – demonstrates a flight-to-quality: renters are gravitating to the best-in-class buildings even while lesser properties lease up slower. For an investor, the submarket trends imply that Sven should continue to lease well (given limited near-term competition after current projects complete), but also that rent growth might be modest in the immediate horizon until excess vacancy is absorbed. The property is well positioned to ride the recovery as LIC’s market tightens in the coming years.

Conclusion and Investment Insights

In evaluating 2959 Northern Blvd (Sven) as an acquisition, we find a high-performing, institutionally prized asset that is ahead of its submarket on key metrics. Its NOI of $30M+ and nearly full occupancy in 2024 highlight excellent execution in lease-up and operations. Compared to LIC peers, Sven achieves higher rents, lower vacancy, and requires fewer incentives, confirming its competitive advantage. The acquisition pricing (implied cap ~4.3%) sits at a slight premium to the average LIC asset – a reflection of Sven’s trophy status and investors’ willingness to pay for stability and long-term growth in this evolving neighborhood.

However, the investment is not without considerations: initial yield is very tight against financing costs, and the LIC submarket is working through a glut of new supply. The new owner’s strategy likely hinges on future rent growth and leasing strength to improve cash yields over time. In this respect, Sven’s prospects are favorable – LIC’s strategic location and improving transit-oriented allure should drive absorption, and Sven’s own performance indicates it can retain a top market position even amid competition.

Valuation Upside/Downside: If market cap rates remain ~4.5–5% and Sven’s NOI grows, the asset’s value will increase correspondingly (for example, a rise to $35 M NOI at a 4.75% cap implies ~$737 M value). Additionally, any cap rate compression (should interest rates fall or investor demand for NYC multifamily strengthen) would disproportionately benefit high-NOI assets like Sven. Conversely, if economic conditions weaken or if vacancy were to spike (for instance, from new luxury supply or a pullback in renter demand), Sven might need to adjust rents/concessions, which could slow NOI growth and pressure its value since it was acquired on a low cap rate to begin with.

Final Assessment: At this juncture (late 2024 context), Sven appears to be priced at a slight premium but for justifiable reasons. Its market-leading rent levels and occupancy support the underwriting assumption that it will deliver growth and outperform the average LIC asset. While the cap rate paid is aggressive, it aligns with the asset’s Class A profile and the broader expectation of LIC’s maturation as a rental hub. Investors should view Sven as a long-term core holding – one that offers stable income (backed by essentially full occupancy) and exposure to the upside of Long Island City’s continued development and lease-up momentum. In summary, Sven represents a premium acquisitionin a growth submarket: the purchase comes at a rich valuation, but the asset’s fundamentals and the LIC market trajectory suggest it is well positioned to deliver strong value as the submarket tightens and rents push upward in the years ahead.

June 16, 2025 by a collective of authors at MMCG Invest, LLC, multi-family and apartment feasibility study consultants

Sources: MMCG database, CMBS, public data