Grubb Properties Forms $1.9B Apartment REIT After Recap

Grubb Properties wants a bigger balance sheet and bigger financing, forming a multifamily real estate investment trust to that end.

The Charlotte-based developer formed a REIT by consolidating several of its funds, Bisnow reported. Link Apartments REIT, which will not be traded or opened up for additional investment, counts 45 properties and more than 5,600 units as part of its portfolio, valued at approximately $1.9 billion.

Perhaps the most notable property in the portfolio is 8 Carlisle, a rental tower under construction in Manhattan’s Financial District. This month, Grubb secured a $377 million construction loan for its 462-unit rental project.

The financing package includes a $300 million loan from Maxim Capital Group and a $77 million mezzanine loan from Skylight Real Estate Partners.

Upon completion, the 64-story project — designed by Handel Architects — is expected to stand 789 feet tall, making it the eighth-tallest residential building in Lower Manhattan.

Also, Grubb landed a $240 million credit facility, which applies to both the REIT and the separate Link Apartments Opportunity Zone REIT, a preexisting entity that isn’t part of the recent consolidation.

In total, Grubb brought in $617 million in financing across the various transactions.

“The REIT was created partially to have a vehicle with a bigger balance sheet that’s going to allow us to get bigger financing,” a Grubb spokesperson told the publication. “But at the same time, it was also a move towards simplicity and efficiency.”

Grubb Properties, led by chief executive officer Clay Grubb, was founded in 1963 and owns or operates 5,500 apartments across the country.

The company debuted in the New York market in 2021 when it purchased a development site at 41-34 27th Street in Long Island City. Grubb launched leasing at the 417-unit Link Apartments QPN last summer.

In Lower Manhattan, it purchased the site for what would become 8 Carlisle Street later in 2021 for $89 million. The site, previously known as 111 Washington Street, languished under the ownership of feuding father and son Fred and Richard Ohebshalom.

Construction on 8 Carlisle passed the halfway point this spring. The topping out is expected later this summer.

— Holden Walter-Warner