Carlyle Team Lists 2 NY Apartment Parcels
A Carlyle Group joint venture is shopping two multi-family development sites on Manhattan’s Upper West Side that could attract bids approaching $400 million.
The parcels, which are being offered jointly, are two blocks apart, between West 59th and West 61st Streets along the West Side Highway. They received zoning approval last year for construction of some 1,200 apartments in two towers.
The joint venture expects pricing to reach $390 million, or $300 per square foot, for the estimated 1.3 million sf of developable space. “We think this is a unique opportunity for large institutional multi-family players to get into New York,” said Carlyle principal Jason Hart. “Fully entitled sites of this quality and size are typically held on a long-term basis by local families, and they do not trade.”
HFF is marketing the parcels. A bidding deadline of around Thanksgiving is likely.
The strong demand for apartments in Manhattan makes construction feasible. The vacancy rate on the Upper West Side is a skimpy 1.1%. Rents at Class-A properties average $3,517, exceeding the citywide average of $3,350, according to local brokerage Citi Habitats. But Carlyle projects that, when completed, the properties on its sites will command rents of nearly double the average — about $6,500, or $6.50/sf, for a 1,000-sf unit. The properties’ value upon completion is projected at well north of $1 billion.
The first tower, at the southwest corner of West 61st Street and West End Avenue, will likely have roughly 575 apartments. The second tower, at the northwest corner of West 59th Street and West End Avenue, could accommodate about 625 units. The sites are currently used as parking, but those leases can be terminated with notice of 30 days.
Construction documents are nearly three-quarters complete for the West 61st Street site. The Carlyle team is telling buyers that work could begin almost immediately after closing.
The parcels are part of an eight-acre site, dubbed Riverside Center, that Carlyle and its minority partners assembled over the past few years. One partner is New York-based Extell Development, headed by Gary Barnett.
Riverside Center is within a 77-acre swath called Riverside South that was approved for development by New York City in 1992. A Donald Trump partnership was the first group to build residential towers in Riverside South, which stretches from West 59th Street to West 72nd Street.
The Carlyle team bought the parcels now listed from the Trump partnership in 2005. Carlyle, a big Washington fund manager that recently filed for an initial public offering, also holds a majority stake in three adjacent parcels in the blocks bounded by West 59th Street to the south, West 61st Street to the north, West End Avenue to the east and the West Side Highway to the west. Carlyle plans to develop those sites into residential condominiums. The fund shop also owns a 500,000-sf parcel just north of Riverside Center that is also slated for condominiums.