Blackstone Group will finance its reported $620 million purchase of Kips Bay Court by assuming the property’s existing $200.1 million Fannie Mae mortgage, according to the Real Deal.
The company, which is in contract to buy the eight-building residential complex in the east side of Manhattan, will not take on additional debt for the acquisition. Wells Fargo provided the funds for the 10-year loan. The new mortgage replaced a $90 million loan from M&T Bank.
Kips Bay Court, which covers East 26th to 29th Streets on Second Avenue, contains 894 market-rate apartments.
Blackstone reportedly agreed to a $620 million deal to buy the property in a deal brokered by CBRE’s Darcy Stacom. The purchase price comes to about $700,000 per apartment. The seller is Phipps Houses, an affordable housing development firm.
Once the deal closes, Blackstone’s residential footprint in New York City would be one of the city’s largest. The company, which claims to be the largest private equity firm in the world, has $103 billion worth of assets under management.
Out of that pool of assets is a growing number of multifamily properties.
The deal for Kips Bay Court is the second major residential investment through the firm’s Blackstone Property Partners fund. Last December, the company partnered with Canadian firm Ivanhoe Cambridge in purchasing Stuyvesant Town and Peter Cooper Village for $5.3 billion. That deal provided Blackstone with 11,000 residential units.
According to the Kips Bay Court website, the property is currently undergoing extensive renovations. The improvements cover the installation of new appliances in the apartments as well as renovations to the lobbies, elevators and laundry rooms.
Rental rates start at $2,604 for studios, $3,319 for one-bedrooms and $6,923 for three-bedroom units.