A $270M CMBS loan backed by 11 multifamily properties in Manhattan owned by Blackstone has been sent to special servicing, according to the latest report from Trepp.
The floating-rate loan, issued in 2019, encompasses 637 units in buildings located in Chelsea, the Upper East Side and Midtown South. Trepp put the portfolio loan, current as of this month, on its watchlist in November.
Higher-than-expected expenditures and the floating-rate debt on the portfolio have created a cash flow shortage on the properties. A statement issued by Blackstone indicated the company is trying to restructure the financial package on the portfolio.
“We continue to focus on delivering the best-in-class experience for our residents while we work with our lenders on the capital structure. Rental housing remains a high conviction theme for us, including in New York City,” Blackstone said, in the statement.
The 2019 loan was originated by Morgan Stanley, with Mirae Asset Daewoo, an investment firm based in South Korea providing $93M in mezzanine debt. Blackstone acquired the portfolio in 2015 in a joint venture with Fairstead Capital from the Caiola family.
The loan on its multifamily portfolio is not the first Blackstone CMBS deal on a Manhattan asset to head for special servicing in recent months. Last year, the CRE giant handed the keys for 1740 Broadway, a 26-story office tower, after a $308M CMBS loan came due and was sent to special servicing.
Earlier this month, Blackstone assured investors in Blackstone Real Estate Income Trust (BREIT) that the $69B fund had raised $14B in an infusion of equity that would enable the company to deal with a wave of redemption requests that began exceeding BREIT’s monthly and quarterly limits for investor withdrawals from the fund in November.
As a non-traded REIT, BREIT has thresholds on how much money investors can take out of its fund in order to avoid forced selling of assets. In a Dec. 1 letter to investors, BREIT said redemption requests had exceeded its 2% of net asset value monthly limit and its 5% quarterly threshold.
Blackstone allowed investors to withdraw $1.3B in November, or 43% of the redemption requests it received; the firm limited December withdrawals to 0.3% of the fund’s net assets.
BREIT also blocked the lion’s share of withdrawals in January: the company disclosed it paid out about $1.3B in fund withdrawals last month, representing just 25% of the approximately $5.3B worth of redemption requests it had received in January, according to a report in Reuters.