Carlyle buys Brooklyn apartment building for $98M

Private equity firm adds to ever-growing multifamily portfolio

Carlyle Group’s Jason Hart and a rendering of 8 Marcy Avenue (Carlyle Group)

Rich Bockmann

Jul 27, 2023, 10:45 AM

The Carlyle Group has added to its ever-growing portfolio of outer-borough multifamily properties.

The private equity giant paid $97.5 million to buy the newly constructed, 123-unit rental building at 8 Marcy Avenue in Williamsburg, sources told The Real Deal. Carlyle partnered with Jay Greenberg’s Fort Greene-based Z+G Property Group on the deal.

The seller was Joel Wertzberger and Konstantin Gubareff’s Prospect Development, which finished construction of the building in January.

JLL’s Ethan Stanton, who headed the team that sold the property on behalf of Joyland, said the sale sets “the newest benchmark on where cap rates for new construction multi-housing have settled in New York City.”

Stanton didn’t reveal the cap rate, but a source close to the deal said it was in the low 5s on stabilized income.

The property has a 421a tax abatement and experienced double-digit rent growth since it started, Stanton added.

Invesco Real Estate provided a $73.6 million loan to finance the purchase of the building, which includes 86 market-rate apartments, 37 income-restricted apartments and two commercial units. JLL arranged the financing.

Carlyle and its real estate group, led in New York by managing director Jason Hart, has been aggressively buying all kinds of multifamily buildings in the outer boroughs.

The company has built a portfolio of more than 130 small Brooklyn and Queens apartment buildings worth at least $500 million. It recently paid $100 million for a large development site in Gowanus, and partnered with Hal Fetner’s Fetner Properties on its 363-unit Long Island City development.

New York