Carlyle Transfers UN Plaza Office Condos to Lender

The Carlyle Group couldn’t auction off its office condominiums at 866 United Nations Plaza, so it transferred them to its lender instead.

The private equity giant handed ownership of 29 office condos across the street from the United Nations headquarters to AllianceBernstein, according to property records reported by Bisnow. The deed transfer to the AllianceBernstein affiliate valued the condos at a collective $60.8 million.

Another affiliate of the firm already held a mortgage of the properties valued at $160 million. The affiliate that acquired the deed on the condos will also assume ownership of the debt.

Carlyle purchased 471,000 square feet of office space at the base of 866 UN Plaza for $217.5 million in 2017, buying the space from Meadow Partners after it had divided the space into 96 separate units. Deutsche Bank provided a $168 million acquisition loan, soon refinanced by $160 million from AllianceBernstein.

However, Carlyle moved last year to wash its hands of the office condos, listing them on the Ten-X online auction platform last March. The opening bid for the 177,000 square feet worth of office properties was a measly $18 million. Evidently, it didn’t take.

There were a few additional units up for auction, opposed to what Carlyle just transferred, but the units that were being auctioned range from 3,400 square feet to larger ones that could’ve been combined into 99,000 square feet.

The building houses many foreign government offices and nonprofits, which aren’t required to pay property taxes on units they own. The Permanent Mission of the Democratic Republic of the Congo to the United Nations occupies one of the condo units that were transferred.

In 2018, Carlyle sold units totalling about 80,000 square feet 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.

While Carlyle is releasing dozens of office condos in Midtown East, it’s still a sizable player in New York real estate circles after amassing a half-billion-dollar portfolio of small apartment buildings in Brooklyn.

— Holden Walter-Warner