Carlyle auctioning office condos at UN Plaza

Bidding opens at $18M for units bought for about $113M seven years ago

Newmark's Jared Horowitz; 866 United Nations Plaza (Newmark, Ten-X, Getty)
Newmark's Jared Horowitz; 866 United Nations Plaza (Newmark, Ten-X, Getty)

Few New York City office properties have sold in the past two years, but the Carlyle Group’s office condominium units at 866 United Nations Plaza will almost certainly change hands this spring: They are being auctioned.

The opening bid for the 177,000 square feet of offices is just $18 million. The auction, being handled by TenX, starts March 18.

The 33 condominium units sit in the Class A tower at East 49th Street, just south of the United Nations campus. Carlyle, the private equity giant, acquired them in a larger purchase in 2017, paying Meadow Partners $217.5 million for 340,000 square feet.

In the unlikely event that the remaining space sells for the same $640 per square foot, the price would be $113 million. Carlyle has already sold off units totaling about 132,000 square feet.

One of the brokers marketing the property, Jared Horowitz of Newmark, said of the decision to use TenX, “Given the state of the market, it may generate more activity.” His colleague Zach Weil is also on the offering.

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Property records show the owner took out a $160 million mortgage on 31 of the condo units in 2021. Carlyle’s Jason Hart signed for the loan from AB Commercial Real Estate Debt Management, S.à r.l. of Luxembourg, an AllianceBernstein entity.

The units being auctioned range from 3,400 square feet to larger ones on portions of the second and third floors that can be combined into 99,000 square feet. The brokers are pitching a building-within-a-building office that could be paired with a private lobby entrance.

Several investor units have longstanding tenants in place. Others have been upgraded with newer installations. Common charges are roughly $11 per foot.

The building is home to many foreign government offices and nonprofits, which don’t pay property taxes on units they own.

In 2018, Carlyle sold units totalling about 80,000 square feet — the entire sixth floor — to the Kingdom of Saudi Arabia for $59.2 million. The Kingdom was later sued by its broker, who alleged he was denied a commission.