When we first got word that Peter Cooper and Stuyvesant Town were being considered for sale by Met Life, the asking price was 3 billion and Met Life was not sure that they could get that price. Peter Cooper and Stuy Town have a high percentage of rent controlled units so getting top dollar was considered out of the question.
But it looks like there is much more demand than originally thought and now these landmark middle class communities owned by Met Life may now reach the 5 billion dollar mark. If I was living at Peter Cooper or Stuyvesant Town and had a rent controlled apartment, I would be very nervous. It looks like between Met Life and the new owners, everything possible will be done to get rid of all the rent control tenants that have the slightest violation to their lease before a possible sale.
Behind the scenes, the sale has already drawn interest from dozens of prospective buyers, including New York’s top real estate families, pension funds, international investment banks and investors from Dubai, according to real estate executives, even though the marketing book will not be released to bidders until next week.
The deal is likely to lead to profound changes for many of the 25,000 residents of the two complexes, where two-thirds of the apartments have regulated rents at roughly half the market rate. Any new owner paying the equivalent of $450,000 per apartment is going to be eager to create a money-making luxury enclave, real estate executives say.
The sale would only add to the seismic cultural shifts already under way in New York City and especially in Manhattan, where soaring housing costs have made the borough increasingly inhospitable to working-class and middle-class residents. It would be another challenge to Mayor Michael R. Bloomberg’s effort to stabilize and expand the number of affordable apartments in the city.
via FT.com
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