Carlyle takes majority stake in Ritz Plaza rental building for $251M

Deutsche Bank loans $235M for deal

May.May 10, 2019 09:52 AM
235 West 48th Street and Carlyle Group managing director Jason Hart (Credit: Google Maps and Carlyle Group)

235 West 48th Street and Carlyle Group managing director Jason Hart (Credit: Google Maps and Carlyle Group)

An affiliate of the Carlyle Group has closed on the majority stake in a 43-story Midtown rental tower for about $251 million, property records show.

The move brings the firm together with long-time owner Stonehenge NYC in a joint venture to recapitalize the Ritz Plaza, a 1980s-era, 479-unit complex, with a $235 million first mortgage from Deutsche Bank, Carlyle added in a press release.

Carlyle Property Investors, the real estate fund sponsored by the private equity firm, acquired a roughly two-thirds stake in the tower at 235 West 48th Street, a 1980s-era, 479-unit complex, from entities tied to Ivanhoe Cambridge and SL Green Realty, property records show.

Meanwhile, Ofer Yardeni’s Stonehenge will hold the rest of the interest in the building, according to Real Estate Alert, which first reported that Carlyle agreed to the transaction last month. Ivanhoe and SL Green declined to comment.

The deal values the building at about $373 million and $779,000 per door.

Carlyle and Stonehenge plan to invest capital to renovate the building’s apartments and common areas.

Deutsche Bank’s financing was arranged by Hodges Ward Elliott, and Ackman Ziff advised Carlyle on the deal.

“Our investment in The Ritz is consistent with our strategy of owning a high-quality portfolio of rental apartments in the United States, and particularly in the New York market, which offers relative stability and a high potential for growth,” said Jason Hart, managing director of Carlyle, in a statement.

Available apartments at the tower have rents that range from $3,715 for a three-bedroom unit to $6,111 for a four-bedroom pad, according to StreetEasy.

Several years ago, David Bistricer’s Clipper Equity had signed a “soft contract” to buy the building for around $400 million from Stonehenge NYC, which has held and managed the building since 1996. But Clipper Equity later backed out of the deal.

The latest sale comes about a year after Stonehenge, SL Green and Ivanhoe sold another multifamily building — Stonehenge Village in the Upper West Side — for $237 million to A&E Real Estate Holdings. And just before that, Stonehenge and SL Green parted with a six-story building at 1274 Fifth Avenue, selling it to Akelius Real Estate Management for $44.1 million.

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