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res Management is set to acquire Mitsui Fudosan's majority stake in a large New York apartment building at 525 West 52nd Street for $270 million. The Los Angeles-based private equity firm will take over Mitsui's 75% share of the 392-unit Hell's Kitchen property, which comes with a $200 million Wells Fargo loan carrying a below-market interest rate of 4%. This assumable mortgage has helped facilitate deals in a rising interest rate environment.
The sale is the latest example of private equity firms making big plays on large New York multifamily buildings. Earlier this year, Carlyle Group partnered with Gotham Organization to buy the Aire apartment tower at 200 West 67th Street for $265 million. Carlyle has been actively investing in multifamily properties across Brooklyn and Queens, while KKR has amassed a significant portfolio of Brooklyn rentals.
Mitsui Fudosan developed the Hell's Kitchen building between 10th and 11th avenues with Taconic Partners in 2017. The property has a 421-a tax abatement set to expire in 2039, which could allow a new owner to raise rents on regulated units once it expires.
