The Carlyle Group has continued to expand its multifamily portfolio in Brooklyn, acquiring roughly two dozen small buildings in the past year and a half. The private equity firm’s purchases came at a combined price of approximately $90 million, boosting its total portfolio in New York to more than 260 multifamily properties at a cost above $800 million.
Carlyle’s strategy typically involves targeting prewar walkups with minimum unit counts, allowing the company to avoid select property tax increases and operate outside of the rent-stabilization stratosphere. Neighborhoods involved in Carlyle’s dealings include Bushwick, Prospect Heights, and Greenpoint.
Recent Acquisitions
In a recent example, Carlyle bought 30 Lefferts Place in Clinton Hill from Greenbrook Partners for $4.3 million in an all-cash deal. That’s roughly double what Greenbrook paid for the four-unit building in 2023, which it renovated in the interim.
Carlyle did not return a request for comment from the publication. The company’s acquisition spree in Brooklyn began in the summer of 2021, when it spent a year stitching together a half-billion-dollar portfolio of small apartment buildings in the borough.
Portfolio Expansion
During that time, Carlyle bought more than 130 small apartment buildings in neighborhoods such as Bushwick, Bedford-Stuyvesant, Park Slope, and Cobble Hill, according to sources and an analysis of property records. Carlyle was often buying the buildings one at a time, writing the kind of $2 million or $3 million checks common to small investors who dominate the space.
People familiar with the firm’s strategy at the time said it targeted a specific type of building that falls into the city’s 2A/2B tax designation, which limited increases on real estate taxes to no more than 8 percent a year. This strategy allows Carlyle to minimize its tax liability while expanding its portfolio in Brooklyn.
For the people living in these buildings, Carlyle’s acquisition strategy means that they will be dealing with a large, well-funded landlord. This can be a double-edged sword, as Carlyle may be able to invest more in the buildings, but it also means that tenants may face increased rents or other changes to their living situation.
Investment and Assets
At the start of this year, Carlyle and Z+G Property Group acquired a 132-unit, 13-story apartment building at 130 Second Street in Gowanus for $105 million. The property, which was completed last year, consists of 99 market-rate and 33 affordable units and also features a 12,000-square-foot ground-floor retail space.
Carlyle manages $485 billion in assets, according to its second-quarter earnings report. The company closed its most recent real estate fund last August, raising $9 billion for the vehicle.
