NEW YORK CITY—Blackstone Group is leading a venture that has agreed to buy 25 Manhattan apartment buildings for about $700 million, GlobeSt.com has confirmed. The move marks the private equity firm's foray into rental housing in the borough, according to Bloomberg.com.
Primarily midrise properties, the building have about 1,000 units and are mainly in and around the Chelsea and Upper East Side neighborhoods, Bloomberg reveals.
The seller is the Caiola family, a New York developer. Blackstone's partner in the transaction is Fairstead Capital, a family office co-founded by Stephen Siegel, chairman of global brokerage at CBRE Group. Spokespeople for Blackstone and CBRE both declined to comment.
A Blackstone spokesman declined to comment on the deal. Fairstead Capital and the Caiola family could not be reached at press time. Blackstone reportedly will have a majority stake in the Manhattan properties, where only 5% of the apartments are subject to rent control regulations, according to Bloomberg's source, who had knowledge of the deal. The largest building, at 250 W. 19th St., has 200 units, the person said.
Demand for apartments has risen, allowing landlords to push rents ever higher. The vacancy rate in the New York area averaged 2.7% in Q2 compared with 4.2 percent for the US as a whole, according to research firm Reis Inc. In Manhattan, the median apartment rent was $3,369 in June, up 2.1% from a year earlier and the 16th consecutive increase, according to a report by Miller Samuel Inc. and Douglas Elliman Real Estate.
The city is facing a shortage of rental units, Jonathan Gray, global head of real estate at Blackstone, said earlier this month at the Delivering Alpha conference here. Blackstone also has formed an apartment rental company called LivCor.
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