Wednesday, October 18, 2006

Another one for the record books

The most expensive real estate deal in U.S. history was made yesterday right here in New York City. Met Life sold the sprawling, 80 acre apartment complex known as Stuyvesant Town and Peter Cooper Village for a whopping $5.4 billion to Tishman Speyer, the company that owns both Rockefeller Center and the Chrysler Building, in a joint venture with Black Rock Realty. Thus ending a bidding war that included a bid from the residents of the complex themselves which fell about a billion dollars short.

Why the high stakes bidding war? Because Stuyvesant Town and Peter Cooper Village were the last bastion of middle income housing left in Manhattan with about 80% of the 11,000 units falling under rent-stabilization guidelines. (This means that rents can only be raised a certain percentage every year. There is a common misconception that rent stabilized apartments are far below market value, but that is not necessarily the case. Also, people confuse rent stabilization with rent-control which is virtually non-existent these days.)

Peter Cooper Village and Stuyvesant town were built in the mid-forties as affordable housing for returning World War II servicemen and their families. The complex stretches from 14th Street to 23 Street on the East Side from First Avenue to the East River. The architecture is strictly no-frills and the 1940s urban planning breaks up the grid of the city making it difficult to get around but even so, many residents love it and have called it home for decades. Naturally there is much speculation as to what will become of these long-time residents and their affordable way of life.

Jerry I Speyer, president and CEO of Tishman Speyer said the residents of rent-stabilized apartments are completely protected by the existing system. "No one should be concerned about a sudden or dramatic shift in this neighborhood's make-up, character or charm," he said.

"Sudden" and "dramatic" being the operative words here.

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At 8:10 PM, Anonymous Anonymous said...

"Sudden" and "dramatic" - I've heard those words before. They can change the whole world as you know it.

Cool, you've added word verification. You rock, dude. ;)


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