The Real Deal New York

Fairstead, Blackstone testing the market for Caiola portfolio sale: sources

Partners bought 24-building package for $690M in September

March 11, 2016 03:20PM
By Mark Maurer, Adam Pincus and Hiten Samtani

Caiola

From left: 250 West 19th Street, 341 East 62nd Street and 449 East 83rd Street (inset: Jonathan Gray)

Fairstead Capital and the Blackstone Group are exploring their options to sell the massive 24-building Caiola portfolio they purchased for $690 million in September, according to sources as well as documents reviewed by The Real Deal.

At least two brokerages have been testing the market for the 800,000-square-foot, 979-unit market-rate rental portfolio, likely to be sold in tranches. The owners are looking to see if the portfolio could fetch prices in the vicinity of $1,000 per square foot, which would mean an overall value of $800 million, sources familiar with the matter said.

Fairstead and Blackstone, which have both described their multifamily investments as long-term plays, have not retained an exclusive agent to market it in an official capacity.

A representative for Blackstone declined to comment, as did Fairstead.

The Caiola family acquired, and in many instances, developed the buildings in the portfolio over more than 30 years. After patriarch Benny Caiola died in 2010, his children took on the task of determining the fate of the buildings, which were largely scattered through the Upper East Side, Murray Hill and Chelsea. The addresses include 250 West 19th Street, 345 West 30th Street, 449-451 East 83rd Street and 341-343 East 62nd Street.

In January 2015, Joseph Sitt’s Thor Equities signed a soft contract for $800 million, but later backed out. Then, in May, Fairstead brought on Blackstone as its partner and, by September, the duo closed on the purchase for $690 million. Maryland-based Annaly Capital Management provided a $592 million acquisition loan.

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