The Blackstone Group has signed a contract to purchase Manhattan's largest apartment complex, the Stuyvesant Town-Peter Cooper Village, for $5.3 billion.
According to nytimes.com, the apartment complex has 11,232 units built across 80 acres east of First Avenue, between 14th and 23rd Streets.
Councilman Daniel R. Garodnick, a Democrat and a resident of Peter Cooper Village, said during a news conference underneath the London plane trees that Blackstone is the tenants "true partner" for promising 5,000 apartments to remain affordable for middle- class families in the next 20 years.
The Blackstone group is known to be a real estate behemoth after amassing $93 billion worth of residential buildings, office towers, hotels and warehouses worldwide. It is also known "as a sharp investor, routinely squeezing out 18 percent returns."
Blackstone group is said to be partnering with Ivanhoé Cambridge, the real estate arm of the Canadian pension fund manager Caisse de dépôt et Placement du Québec, for this deal. People are hopeful with the new acquisition but analysts say that they should not expect too much.
Dave Bragg, a real estate analyst at Green Street Advisors, said "They're not a charity. They're one of the savviest dealmakers in all of real estate. It's interesting to see that they think they've got a great deal, while the city is celebrating this as a great deal for affordable housing."
Bragg also said that Blackstone might raise the rents of about 50 percent of the apartments that already have $4,000 to $7,000 per month rate.
In a report by valuewalk.com, Tishman Speyer Properties purchased Stuyvesant Town and Peter Cooper Village last 2006 for $5.4 billion. However, the group had incurred a debt of $4.4 billion last 2010 due to "overly-bullish estimation of rent increases."
Currently, the complex is now being managed by a group of creditors led by CWCapital Asset Management and will soon be under Blackstone Group once the deal pushed through.
It is also known that New York City will contribute $225 million to the apartment complex to ensure that middle and low- income families will be allowed to stay in a portion of the complex.
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