Blackstone To Acquire Kips Bay Court For $620M

Phipps Houses' could get about $700M for its Kips Bay Court.
Google Maps

Jonathan Gray’s Blackstone Group is about to close the city’s largest multifamily deal so far this year with its $620M acquisition of the 894-unit Kips Bay Court market-rate rental complex.

The deal, which has units selling for $700k each, is expected to be under contract within the next week, The Real Deal reports. It’s almost double the value of the current multifamily deal leader, Fairstead Capital’s $315M purchase of Savoy Park in July.

This is a return to form for Blackstone, which made the city’s two largest multifamily purchases last year with the $5.3B acquisition of Stuyvesant Town-Peter Cooper Village and the $690M purchase of the Caiola portfolio, but has been struggling throughout 2016.

Affordable housing developer Phipps Houses developed the eight-building complex in 1975 under the state’s Mitchell-Lama housing program, and has owned the property since. About a decade ago, Phipps left the program—which caps profits and rents—and has made Kips Bay Court a market-rate offering.

The number of Section 8 apartments has halved since 2004, and the 40% of units occupied by federally subsidized tenants bring in market-rate rents. The net operating income of the complex is expected to be $23.9M in 2017, jumping to $41.6M by 2027 when the number of Section 8 tenants drops to 69. [TRD]

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's New York Newsletters
Related Stories

Years Later, Millions In Chicago Housing Projects Remain Unbuilt

NYC Is Building Hotels Again. It May Not Be Enough

Developers Scheme To Build More Housing Units As NYC's Tax Incentive Ages

U.S. Multifamily Market Regaining Its Balance As Yearslong Supply Wave Tapers Off

Hines Spends $170.5M On Mixed-Use Portfolio In Dallas' Bishop Arts District

Tishman Speyer Retakes Chrysler Building, Plans $235M Renovation

Activist Investor Buys Stake In Empire State Building Owner

How UK Investment Giant L&G Plans To Grow Its U.S. Multifamily Holdings

Properties Owned By REIT Accused Of Fraud To Be Auctioned Off

DRA Buys Stake In 1301 Sixth Ave. At $1.3B Valuation: The N.Y. Deal Sheet

Major NYC Multifamily Firm Expands With Tech-Driven Operations

Multifamily's Days As Commercial Real Estate's 'Golden Child' Are Over