Carlyle buys Clinton Hill multifamily for $34M

Seller Freo Group gets 50% ROI in less than two years

Kewsong Lee, CEO, Carlyle; The Knitting Factory Lofts at 79 Clifton Place (LoopNet, Getty, The Knitting Factory Lofts)
Kewsong Lee, CEO, Carlyle; The Knitting Factory Lofts at 79 Clifton Place (LoopNet, Getty, The Knitting Factory Lofts)

The Carlyle Group scooped up a 40-unit loft apartment building in Clinton Hill for $34 million.

The global investment firm closed on the deal on Wednesday to acquire the six-story Knitting Factory Lofts complex at 79 Clifton Place, people familiar with the matter said.

The deal gave the seller Freo Group a handsome return of nearly 50 percent in less than two years. The European investment firm bought the property for $22.9 million in January 2020 and started marketing the property in July, aiming for $35 million. In less than four weeks on the market, Carlyle was identified as the buyer, the people said.

The final sale price comes down to $850,000 per unit, or $650 per square foot. The cap rate was roughly 4 percent, according to sources. Even with the tight rate, multifamily investors can do well because of the current low interest rates.

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Hodges Ward Elliott’s broker team led by Daniel Parker handled the sale. Parker declined to comment. Carlyle and Freo did not immediately return messages requesting for comment.

The former knitting factory was built in 1939 and was converted into loft apartments in 2001. The one- to three-bedroom residences in the building feature outdoor space and high ceilings, according to StreetEasy. A three-bedroom, two-bath apartment was recently leased for $5,800 a month, according to the listings website.

The loft-style apartments have gained renewed popularity in a working-from-home environment as renters look for more space.

Since the second quarter of this year, investment sale activity in New York City’s multifamily sector has roared back from the depth of the pandemic. In addition to government-subsidized affordable housing communities, market-rate apartment buildings started trading in recent months. Most recently, SL Green Realty closed on a deal to sell its 41 percent stake in the 261-unit apartment building at 400 East 57th Street to A&E Real Estate in a deal valuing the property at $133.5 million.

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