Carlyle Group scores $32M construction loan for Crown Heights storage facility

Investment firm renewed building permit submitted by Criterion Group, the lot’s previous owner

1223 East New York Avenue with Carlyle Group's Jason Hart (Google Maps, Carlyle Group)
1223 East New York Avenue with Carlyle Group's Jason Hart (Google Maps, Carlyle Group)

Here come the cubes.

The Carlyle Group on Wednesday scored $31.8 million in construction loans from Santander Bank to build a self-storage facility in Crown Heights. The project will replace a Western Beef meat market that used to stand at 1223 East New York Avenue and has since been demolished.

In Nov. 2020, a Carlyle subsidiary purchased the lot for $13 million from Shibber Khan’s Criterion Group, public records show. Just five months before the sale, Criterion obtained city approval for a three-story self-storage building on the 43,000-square-foot lot. Carlyle has renewed the permits and with the new funding, arranged by Eastdil Secured, appears poised to finally execute on them.

Just one roadblock remains: a stubborn partial stop-work order. On July 13, the city halted the project after a neighbor complained the construction was causing cracks in his basement and shaking his house. The order remains unresolved, although the city has lifted some restrictions for approved work.

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Carlyle’s private equity arm holds at least $26 billion in real estate assets, according to its second-quarter shareholder report. The firm generally steers clear of office, hotel and retail spaces, with the vast majority of its real estate holdings in specialized buildings like self-storage facilities, life-sciences centers and single-family rentals.

All told, real estate accounts for just 17 percent of the firm’s $150 billion in private equity assets under management.

The Carlyle Group did not immediately respond to a request for comment.