New York City's Stuyvesant Town, a massive apartment complex home to more than 30,000, is listed on the market again for bidding. Bloomberg Business reports that Blackstone Group LP is the most probable buyer. While the negotiations are not made public, sources say that Blackstone will shell out $5.3 billion for the 80-acre complex.
Stuy Town, as it is fondly called, has been beset with problems over the last decade. Located between the 14th and 23rd streets on Manhattan's east side, it was built in the 1940s by Metlife Inc. for World War II veterans. In 2006, Tishman Speyer and Black Rock Inc., bought it for $5.4 billion, only to hand it back over to the lenders in 2010. Financial crisis reportedly devalued the property, and tenants went on to sue the company over dramatic rent hikes. NY Curbed calls this "one of the biggest collapses in the last decade's real estate boom."
Since then, CW Capital Asset Management has been managing the complex, and a successful sale to Blackstone Group will end the five-year limbo its residents are experiencing.
"The tenants are going to insist that the owners work directly with them and with the city to develop a responsible plan to protect the long-term affordability of the place. The ownership has changed more times in the last handful of years than it had since its creation and tenants want to see this issue resolved for good," said City Council Member Daniel Garodnick, also a resident, in an interview quoted by Bloomberg.
Stuy Town remains one of the last estates offering affordable housing for middle-class New Yorkers, and the deal with Blackstone reportedly states that the apartments will stay affordable for the next 20 years.
Additionally, Bloomberg reports that "500 of the 5,000 units will be reserved for families making no more than $62,000 a year."
"[This] would equate to a monthly rent of about $1,500 for a two-bedroom apartment. The other 4,500 units would be for families making as much as $128,000 a year, which would translate to about $3,200 a month. The 1,400 units that will gain another five years of rent protection will see annual increases of no more than 5 percent under the agreement," said Wiley Norvell, a spokesman for Mayor Bill de Blasio.
According to Peter Hauspurg, chief executive officer of brokerage Eastern Consolidated, the Stuy Town purchase is a good call in the part of Blackstone. Though it has had a rough decade, the complex still remains a prime property.
"It's so big, it's so well located, there's still so much upside in it that someone is still going to make a lot of money if you hang in there," he said.
Blackstone Group LP is expected to make an official announcement soon.
