The Real Deal New York

Blackstone closes on $620M purchase of Kips Bay Court

900-unit complex is largest NYC multifamily deal of 2016
By Mark Maurer | Twitter_logo_blue copy December 08, 2016 06:30PM

Kips Bay Court (inset: Johnathan Gray)

Kips Bay Court and Jonathan Gray

UPDATED, 1:17 p.m., Dec. 13: In the largest New York City multifamily deal of the year so far, Blackstone Group closed Thursday on the $620 million purchase of Kips Bay Court, sources told The Real Deal.

The investment firm entered contract in August for the eight-building, 894-unit complex between East 26th and 29th streets east of Second Avenue. All of the apartments are free-market. Section 8 tenants occupy about 40 percent of the units, but those apartments bring in nearly market-rate rents.

Sources told TRD in August that Blackstone plans to assume the $200.1 million in existing Fannie Mae financing from Wells Fargo. That loan, which Wells provided in 2013, carries a 10-year term. Blackstone also recently secured a $92.4 million mortgage from Wells Fargo, property records show.

The seller, affordable housing developer Phipps Houses, developed the complex in 1975. A CBRE team led by Darcy Stacom was hired to market it for sale earlier this year.

A spokesperson for Blackstone declined to comment. The firm also had the biggest deal of last year, when it purchased Stuyvesant Town-Peter Cooper Village for $5.3 billion.

In other large New York City multifamily portfolio purchases, Blackstone has sought a partner – Fairstead Capital for the Caiola portfolio and Ivanhoe Cambridge for Stuy Town, for example. But sources said Blackstone closed this deal solo.

The Dermot Company was one of the bidders for the property, sources said. Andrew MacArthur, who formerly served as a Dermot principal and managed Stuy Town on behalf of special servicer CWCapital Asset Management, was reportedly tapped to serve as a consultant on Kips Bay Court. The extent of his role is not clear.

Other large 2016 multifamily deals include Fairstead’s $315 million purchase of Savoy Park, and Rockpoint Group’s purchase of 63 and 67 Wall Street for $430 million. Isaac Kassirer’s purchase of the Dawnay Day portfolio from Fairstead and E&M Associates for north of $350 million has yet to close.