The New York Times reports that Wall Street investment firm and national landlord The Blackstone Group is about to buy Stuyvesant Town-Peter Cooper Village—at 11,232 units across 110 buildings, the largest apartment complex in Manhattan—for around $5.4 billion.
The deal will preserve 5,000 apartments for middle-class families for the next 20 years. “This has been a priority for us since Day 1,” Mayor Bill de Blasio said in a statement on Monday. “We weren’t going to lose Stuy Town on our watch.”
Completed in 1947 and segregated until the ‘60s, Stuy Town was conceived and brought into existence by Robert Moses as a middle-class oasis in Manhattan, after bulldozing the older, lower-income Gashouse District and displacing its 11,000 residents to make way.
By 2006, the sun seemed to be setting on the middle class in Manhattan. The blasting real-estate scene gave a whole new meaning to “market rate” apartments, and fewer and fewer people in the city believed in rent stabilization as a core value. The complex seemed a kind of anachronism—and, to the Speyers, a huge opportunity. To start with, the phrase “80 acres of Manhattan” is, to real-estate men like Rob Speyer and his father, a talismanic incantation. But it was more than just the acreage. Rob had a vision. He believed that by adding amenities and remodeling apartments—and forcing out longtime tenants who held on to their apartments in violation of rent-stabilization law—they could make Stuy Town hospitable to the new armies that were increasingly populating Manhattan, the recent college graduates with jobs in marketing and finance who worked long hours and wanted a full-service experience (including even a putting green).
Alas, Tishman Speyer / Blackrock’s evil plan was foiled by recalcitrant tenants who in 2007 had the audacity to sue after the owners raised rents on regulated apartments and a cratering global economy.
The buyers expected to triple their net income by 2011 by replacing longtime residents paying regulated rents with tenants paying higher market rates. But their plans fizzled after residents resisted and the partners failed to convert enough apartments to market rents. In January, they defaulted on a $16.1 million monthly mortgage payment.
The casualties from the ruptured deal spanned the globe, as analysts revised the value of the property to $1.9 billion, less than one-third of the acquisition cost. The Church of England, the government of Singapore and several public American companies lost hundreds of millions of dollars, while three public-employee pension funds in California and Florida saw their combined $850 million investment evaporate.