Carlyle Group pays $100M for control of PMG’s 517-unit Gowanus project, gets $230M loan

Carlyle Group through the entity Bayside Gowanus Owner, L.L.C. bought a controlling stake for $100 million in Property Markets Group’s two-tower project in Gowanus, Brooklyn. Simultaneously with the loan, Carlyle Group and PMG obtained a $230 million construction loan from Apollo Global Management’s Athene Annuity and Life Company.

PMG filed the plans in November 2021 for a 344-unit, 295,262-square-foot mixed-use building at 267 Bond Street and for a 173-unit, 189,555-square-foot mixed-use building at 498 Sackett Street.
The sale closed on May 19, 2023 and was recorded on May 31, 2023.
The signatory for Property Markets Group was Daniel Kaplan. The signatory for Carlyle Group was Jason Hart. The contract date says August 17, 2023 but PincusCo believes the intended date was August 17, 2022.

This is Carlyle’s third major multifamily acquisition this year. It April it bought out the Lions Group at a Long Island City development site through a $51 million deal and in another deal joined with Stonehenge NYC to pay $114 million for a 196-unit apartment building in Yorkville.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Carlyle Group purchased 161 properties in 143 transactions for a total of $873.4 million and sold one property in one transactions for a total of $4 million over the past 24 months.
The seller Property Markets Group had not purchased any other properties and sold four properties in four transactions for a total of $167.3 million over the same time period.

The property

The parcel has frontage of 200 feet and is 300 feet deep with a total lot size of 59,999 square feet. The most recent loan totaled $59.5 million and was provided by Maxim Capital Group on June 28, 2022.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received $31,000 in ECB penalties and $32,000 in OATH penalties in the last year.

Development

On these lots, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 484,817 square feet. The largest is a new building project for a 344-unit, 295,262 square-foot R-2 building submitted by Property Markets Group and filed by Daniel Kaplan with plans filed November 4, 2021 and permitted May 20, 2022. The second largest is a new building project for a 173-unit, 189,555 square-foot R-2 building submitted by Property Markets Group and filed by Daniel Kaplan with plans filed November 4, 2021.

The neighborhood

In Gowanus, The bulk, or 46 percent of the 9.2 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 19 percent of the space. In sales, Gowanus has 1.4 times the average sales volume among other neighborhoods with $499.5 million in sales volume in the last two years and is the 14th highest in Brooklyn. For development, Gowanus is the 6th most active neighborhood among other neighborhoods. It had 4.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 50 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The seller

The PincusCo database currently indicates that Property Markets Group owned at least nine commercial properties with four residential units in New York City with 42,229 square feet and a city-determined market value of $16.6 million. (Market value is typically about 50% of actual value.) The portfolio has $544.5 million in debt, with top three lenders as AIG, Maxim Capital Group, and Goldman Sachs respectively. Within the portfolio, the bulk, or 48 percent of the 42,229 square feet of built space are industrial properties, with A4 properties next occupying 33 percent of the space. The bulk, or 67 percent of the built space, is in Brooklyn, with Manhattan next at 33 percent of the space.

The buyer

The PincusCo database currently indicates that Carlyle Group owned at least 215 commercial properties with 2,296 residential units in New York City with 2,721,887 square feet and a city-determined market value of $695 million. (Market value is typically about 50% of actual value.) The portfolio has $1.1 billion in debt, with top three lenders as Invesco Real Estate, Invesco, and Santander Bank respectively. Within the portfolio, the bulk, or 54 percent of the 2,721,887 square feet of built space are elevator properties, with walkup properties next occupying 14 percent of the space. The bulk, or 37 percent of the built space, is in Brooklyn, with Queens next at 34 percent of the space.
The PincusCo database currently indicates that Property Markets Group owned at least nine commercial properties with four residential units in New York City with 42,229 square feet and a city-determined market value of $16.6 million. (Market value is typically about 50% of actual value.) The portfolio has $544.5 million in debt, with top three lenders as AIG, Maxim Capital Group, and Goldman Sachs respectively. Within the portfolio, the bulk, or 48 percent of the 42,229 square feet of built space are industrial properties, with A4 properties next occupying 33 percent of the space. The bulk, or 67 percent of the built space, is in Brooklyn, with Manhattan next at 33 percent of the space.

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