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KKR, Dalan buying Downtown Brooklyn rental tower for $240M

Private equity giant in contract on 327-unit Paxton at 540 Fulton St

KKR Buying 540 Fulton Street from Jenel Real Estate
KKR’s Ralph Rosenberg and 540 Fulton Street (KKR/Kent Meister, The Paxton BK)

KKR is adding to its ever-growing portfolio of multifamily properties.

The private equity giant and Dalan Management are in contract to buy the 327-unit Paxton rental tower at 540 Fulton Street in Downtown Brooklyn for about $240 million, sources told The Real Deal.

KKR had been in talks with the seller, Jenel Real Estate, in the fall about the deal, but things moved slowly.

“Things weren’t as certain as they are today,” Jenel’s Jack Dushey said. “There were a lot of factors that were involved and the deal fell through and we stayed in touch. Now they just got their arms around it.”

Dushey declined to comment further on what stalled the talks, but the project hadn’t been completed when the two sides were negotiating in the fall. The tower was completed earlier this year and is now being leased up.

The 43-story building has a retail component at its base that is not part of the deal.

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A spokesperson for KKR declined to comment.

A Newmark team led by Adam Spies and Adam Doneger negotiated the deal.

KKR has been active in buying apartments both in Brooklyn and beyond.

The company paid $2.1 billion last month to buy a portfolio of 18 multifamily properties containing 5,200 units across eight states from Quarterra, the multifamily arm of home builder Lennar.

Just two blocks over from the Paxton, KKR paid $190 million in 2022 to buy the 365-unit rental tower at 80 DeKalb Avenue from Brookfield Properties. 

In 2020, KKR made a $860 million purchase of a 14-building Brooklyn rental portfolio, spanning 1.5 million square feet and including roughly 1,275 residential rental units. 

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