Another big private equity firm is snapping up a large New York apartment building.
Ares Management is in contract to buy Mitsui Fudosan’s majority stake at 525 West 52nd Street in a deal that values the Hell’s Kitchen building at $270 million, The Real Deal has learned.
Los Angeles-based Ares is buying Mitsui’s 75 percent stake in the 392-unit building. The buyer is assuming the $200 million Wells Fargo loan on the property, which carries a below-market interest rate of 4 percent and matures in 2028.
These kinds of assumable mortgages have helped deals get across the finish line amid rising interest rates.
A spokesperson for Ares declined to comment and a representative for Mitsui did not immediately respond. A Newmark team led by Adam Spies and Adam Doneger brokered the sale.
The deal is the latest big splash by a private equity firm on a large Big Apple multifamily building. Earlier this year Carlyle Group teamed up with the Gotham Organization to shell out $265 million for the Aire apartment tower at 200 West 67th Street on the Upper West Side.
Carlyle has been investing in multifamily properties both big and small in Brooklyn and Queens, and KKR has amassed a very large portfolio of Brooklyn rentals.
Outside New York, earlier this year Ares paid $140 million for a Boca Raton apartment complex in one of the biggest South Florida multifamily deals this year.
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Mitsui developed the Hell’s Kitchen apartment building between 10th and 11th avenues in 2017 with Taconic Partners, which is keeping its 25 percent stake.
The property has a 421-a tax abatement slated to expire in 2039. Part of the marketing pitch was that a new owner could raise rents on the regulated units once the abatement expires.