Marketplace: Blackstone, Fairstead Capital Partner to Acquire 24 NYC Buildings

31-East-31st-Street New YorkMarking one of the largest residential deals in New York City in the past decade, a joint venture of Blackstone Real Estate Partners VIII and Fairstead Capital closed on the acquisition of a 24-building portfolio from B&L Management Company and developer the Caiola family for $690 million.

The two dozen, mid-size residential buildings contain 997 free-market rental units. The properties are mainly located in Chelsea and on the Upper East Side with a couple of buildings in outlying neighborhoods. Sample addresses in the portfolio include 250 W. 19th St., the largest building in the group, and 31 E. 31st St.

The seller was represented by Gordon Caplan, co-chairman of Willkie Farr & Gallagher and a partner in the firm’s corporate and financial services department, and David Drewes, real estate partner, who led a team that included associates Justin Elliott and Jacob Moss.

Scott Kobak, a partner at Simpson Thacher & Bartlett, along with associates Frank Mangiatordi and Leanne Welds, represented the buying joint venture on the acquisition and the financing, and also represented Blackstone in the joint venture with Fairstead.

A Fried, Frank, Harris, Shriver & Jacobson team of Jonathan Mechanic, partner and chairman of the firm’s real estate group; Lee Parks, corporate partner and co-head of the firm’s real estate transactions practice; Richard Wolfe, tax partner; and associate Andrew Ebersbach represented Fairstead in the joint venture negotiations.

Drewes said the complex multi-property transactions went “smoothly and quickly.”

Since many of the buildings were constructed in the 1970s and 1980s, future plans include upgrades to the common areas, the addition of new amenities and the execution of a capital improvement plan to renovate units.

B&L Management was founded by Benny Caiola in 1980. The family-owned business focuses on the development and management of multi-family apartment buildings in New York City with other residential and retail properties in the city and Long Island.

Founded in 1991, Blackstone is an international leader in real estate investing and has about $92 billion in investor capital management. Its portfolio includes hotel, office, residential, retail and industrial properties in the U.S., Europe, Asia and Latin America. One of Blackstone’s major holdings is Hilton Worldwide.

Fairstead, a real estate investor and asset manager, specializes in multi-family properties in New York City. In its partnership with SG2 Properties and others, Fairstead owns and asset manages $2.3 billion of properties in the city with more than 4,750 rental units on behalf of principals and investors.

Aliza Avital, founder of Emerald Equities NYC LLC, assisted both parties on the deal.

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