William Busch

Blackstone Group is about to make another big multifamily splash, this time by buying the 894-unit Kips Bay Court from affordable housing developer Phipps House in a deal valued at $620 million, or $700,000 per unit.

The deal would be the largest multifamily transaction in New York City this year and emanates from Blackstone's Core-Plus fund, which it also used in last year's $5.3 billion purchase of Stuyvesant Town-Peter Cooper Village.

Kips Bay Court was built in 1975 under the state’s Mitchell-Lama housing program and exited the program more than a decade ago. All of the apartments are free-market, though Section 8 tenants occupy close to 40 percent of the units. Those federally subsidized apartments bring in nearly market-rate rents.

Sources said Blackstone has not had any discussions with the city regarding preservation of the units.

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