Blackstone Buys Stuy Town for $5.3 Billion, Will Preserve Affordable Housing
The saga of Stuyvesant Town continues. The Real Deal reports that the Blackstone Group has partnered with Canadian investment firm Ivanhoe Cambridge to buy Stuy Town and Peter Cooper Village for $5.3 billion, just slightly under 2006’s $5.4 billion sale.
Currently, more than half of the 11,200 apartments in the long-plagued complex (which was built under Robert Moses as affordable housing for veterans returning from WWII) are market rate. And as TRD notes, “As part of the new agreement with the city, Blackstone will reserve 4,500 units at the complex for middle-income families for the next 20 years… An additional 500 units will be slated for low-income families, and Blackstone will not attempt a condominium conversion at the complex.” In order to keep the affordable units, the city will provide $225 million in funding; give Blackstone a $144 million low-interest loan through the Housing Development Corporation; and waive $77 million in taxes.
Photo via Wiki Commons
The largest apartment complex in Manhattan, Stuyvesant Town first saw red flags go up when Tishman Speyer made a record-breaking deal with MetLife to acquire the property in 2006. Tishman came under fire for trying to evict rent-regulated residents in order to bring in new tenants paying significantly higher rents. After a high-profile lawsuit that demanded rent rebates be given to tenants (event those not in the rent-regulated units were being overcharged), the owners defaulted on $4.4 billion in debt and lost the complex to their creditors.
Currently, the roughly 5,500 market-rate units rent for fairly high sums. For example, a two-bedroom apartment is more than $4,200/month; in 2010, this same unit was roughly $2,900. But under the new agreement with the de Blasio administration, middle-income housing will offer a two-bedroom for $3,205 to a family of three making $128,210 a year, according to the Times. For a family of three earning $62,150 a year, this apartment would be $1,553.
Blackstone, America’s largest private landlord with $93 billion assets, and Ivanhoe Cambridge, “one of the world’s biggest pension-backed investment funds,” are expected to sign the Stuy Town contract this morning.