October 17, 2006
StuyTown Sold to Tishman-Speyer for $5.4 Billion
Breaking: Tishman-Speyer, the real estate concern that controls Rockefeller Center, the Chrysler Building, the Lipstick Building, and much more around the city and world, was the winning bidder in the Stuyvesant Town-Peter Cooper Village sweepstakes. The NY Times' Charles Bagli writes:
Mr. Speyer and his partner, the Blackrock investment bank, outmaneuvered nearly a dozen bidders, including a group aligned with the tenants at the complexes who hoped to preserve what is fast becoming a rare commodity in Manhattan: middle-class housing. With rents and housing prices skyrocketing in recent years, the pending sale and the issue of affordable housing became a cause célèbre among New York politicians and tenant activists.The NY Sun adds that another of Tishman-Speyer's partners in the deal was the California State Teachers' Reitrement System- and that MetLife sold the Pan-Am building to Tishman-Speyer and other investors earlier this year. To put the deal, called the biggest in history, in perspective, Bloomberg News says that the cost of the 1803 Louisana Purchase would be about $277 million in 2006 dollars.But Mayor Michael R. Bloomberg stayed on the sidelines and MetLife was intent on selling for the highest possible price. At $4.5 billion, the tenant offer lagged behind bids from some of the biggest names in real estate, including Apollo Real Estate Advisors with the Dermot Company, Related Companies with Lehman Brothers, the Millstein brothers, and Vornado Realty Trust.
City Councilman Daniel Gardonick, who is a Peter Cooper resident and was involved with the tenant bid, told the Times, “We expect a new owner to not only to honor his obligations under the law, but to come up with a plan that preserves the long-term affordability of this middle-class community.”
Photograph of family and a pigeon in Stuyvesant Town by Mary Altaffer/AP
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dram. $5.4 billion!!
"a plan that preserves the long-term affordability of this middle-class community"
amazing what some people think they're entitled to.
Another piece of land gone to the rich. Who will be able to afford the rent five years from now?
Who will be able to afford rent five years from now?
Just me baby, just me.
You are entitled no to be kicked out of your home.
Corporate Fascism!
"You are entitled no to be kicked out of your home."
Uhhh... not when you don't own it. That's Tish's home now, right or wrong.
Three comments:
1) Unless there is a lot of unused floor area and a potential for additional development, they overpaid. That's why Metlife was in a rush to sell.
2) Based on that, I'm glad it's not our pension funds (backed by taxpayers) backing the deal.
3) The price suggests that the city would have had to provide nearly $1 billion in subsidies, in addition to the tenant bid, for their bid to succeed. Or $90K per apartment.
Wrong.
City Councilman Daniel Gardonick, who is a Peter Cooper resident and was involved with the tenant bid, told the Times, “We expect a new owner to not only to honor his obligations under the law, but to come up with a plan that preserves the long-term affordability of this middle-class community.”
Covering that land in 40-story buildings would justify $5.4B...and that's what's coming.
ouch. CA teachers' pensions spent wisely. Great time to enter the housing market.
1. The land isn't zoned for 40 story buildings.. It's currently using nearly all of it's floor space to land allocation.. It'd take a zoning change to build more, so relax and fight that if it comes.
2. There is no "right to affordable rentals". If you want to control costs, buy.
3. If you think it's middle class now, you're kidding yourself. It's either abused rent stabilized, someone really old who's been there forever and probably doesn't need the 3br anymore now that the kids and grandkids are gone, or 4 college kids overpaying for a market rate 2br apt.
4. Why should tish have to come up "with a plan that preserves the long-term affordability of this middle-class community"? Sure that would be nice, but who spends 5.4 billion to be nice? I'd rather they offer the apartments up for sale.
-joe
RS and RC only affects a small percentage of renters in this city. Are there abuses? sure, like tax loopholes.
why should we help? because it's the right thing to do.
don't worry, you'll all get yours.
"many of the residents make more than 175,000". Yeah, these people need the housing assistance.
Move to Cuba if you want socialism. (or wait 3 years and NYC is a socialist heaven once spitzer and the next mayor are in power)
#6 - Agree, no renter is entitled to their homes, it's a contract to lease not to own, and Tish only needs to honor the the leases until they expire, and the right to renew is in Tish(owner)'s hands.
Unless Tish gets some type of government subsidy, I don't see why they have to keep the RS units if they are able to charge market rates on them.
Whether Tish and its partners overpaid is another issue all together. But I doubt Tish purchased the place for charity.
Most of you 'free marketers' will all be singing a different tune once *all* lower- and middle-income wage earners flee the city in search of more a more affordable lifestyle. When the costs of services skyrocket, I'm sure those crying about rent control/subsidy will be the first to complain about how much it costs to get your shirts ironed.
Joe -
What exactly is your definition of middle class? I've been told the average income in the area is mid-60s (from census figures). For NY, that's barely middle class.
In addition, there are plenty of middle-aged rent stabilized tenants - MetLife only started destabilizing within the last 5-7 years. Many of them will be around for the duration. In addition, there are legitimate ways to "inherit" a rent stabilized apartment. Also, prior to destabilization, people would downsize to smaller apts. The college kids - well, they may be out of luck.
It seems to me the tenant bid would have given people the opportunity to buy their apartment at a rate that wasn't over-inflated. I doubt that they will get the opportunity now.
15, i don't understand why free market housing works in every other section of the country, but not in NY? also Boston got rid of rent control and despite all the doomsday predictions, everything is fine. these housing subsidies help only a very few at the expense of everyone (even those who cant afford it, but make just over what is necessary to even be considered for subsidies).
Ironic isn't it. It's practically the reverse of the white flight of 30 years ago in New York City. I guess the days of the wealthy abandoning the city to the impoverished trapped by lack of mobility.l
are over.
(that ending is key)
[12] i thought RS units were just over half of the rental units in the city. rent regulation goes away when its less than half (either bc it stops making such a difference or there are more residents hurt by rent regulation than benefit from it.)
[15] i wouldn't begrudge someone an increase in their income or i'd just iron my own shirts. its not a major deal. although rent stabilisation is a major reason nobody builds low to mid income rental housing in the city anymore. it's a stupid thing to do when the state won't allow you to adjust your revenue relative to your costs. in fact, the distribution of housing in less regulated cities tends to have more low income housing.
It's not about entitlement, it's about having a healthy society. Sometimes the middle class needs protection (and $175k/year is middle class here).
Tanya,
NYC is unlike any other real estate market in the country for many reasons. First, there is the severe shortage in inventory due to space constraints.
Secondly, there is an exaggerated income disparity that doesn't exist anywhere else in the US. You won't find people this rich or this poor in such large groups. Have you seen what RE in even sketchier areas of Brooklyn are going for?
The further out you push the middle and especially lower classes, the less likely they'll fill jobs requiring massive commutes for comparitive peanuts.
I live in a RS rental, It's a luxury building.
so just because someone has RS in their lease does not mean they are making out like bandits.
It just means my rent won't go up drasticly when it ends. It protects everyone.
So don't equate RS laws with only the poor.
Wow. It's pretty sickening to me that what was once an encouraging place for all kinds of people to live, gather and work, Manhattan will be an island full of boring, rich financiers who are the only people that can afford to live here. BOOORING!
Of course they had a right to sell. Of course Tishman has a right to buy. . . but what upsets me is that people are mistaking the term "affordable housing" with "charity" or "free rent." I'm not looking for a handout, I just want a place that I want to live in that is fairly priced. 'Cause you're kidding yourself if my apartment is worth any more than $2400 for a one bedroom, whether my landlord is MetLife or Tishman.
"The further out you push the middle and especially lower classes, the less likely they'll fill jobs requiring massive commutes for comparitive peanuts."
then i guess the salaries offered for those jobs would have to rise, since no one would fill them and the gov't is not subsidizing the low wages with housing regulation. the market will work these things out. it might bring the total stock pricing into a more reasonable level, if building decisions were market driven and developers were permitted to build and rent based on actual demand.
my sister and her husband live in stuy town. he grew up there. he teaches pre-school. she teaches grade school. they have two kids.
they can't afford to live anywhere else. oh well. manhattan belongs to the rich, who don't need school teachers.
Gosh, where are these jobs?
We just got raise to the minimum wage to 6.75 this year. That's around $240 for a 35hr work week.
the market will not work it out. it's all an urban legend.
MetLife made no improvements to the place (there was no AC in Stuy Town until the mid-nineties) for almost 40 years and were charging affordable rent, and MetLife seemed satisfied for all those years. How do you justify the "market value" as post [24] suggests? Is it because they finally decided to do some landscaping, fix the elevators and put signs up so people wouldn't get lost or because all (and MetLife admits this in the sale offering) of this was recently done to sell the place at a market rate (even with the current rent stabalized tenants percentage).
On another note,it makes no sense for the City Administration to preach the need for affordable housing on one hand and kick out these units on the other hand. It's simple math!
And finally, how anyone can type a response blatantly suggesting no (zero) support for the current tenants to keep their apartments based soley on some capitalistic arguement better take a course in civics and civil planning soon. The city is a complicated beast, thankfully we don't have you guys running it.
Welcome to New York City, people. It's the world's largest economic hub and home to some of its hottest real estate. You're not entitled to live here. If you can't afford it, move somewhere else. All rent stabilization does is decrease supply and drive up costs for the rest of us.
amen, pedestrian... it's a shame people cant grasp such a simple concept.
amen, pedestrian... it's a shame people cant grasp such a simple concept.
Things are rarely simple in this city. I should know since I was born and raised here. Only the future knows the truth.
Another big problem with Stuy Town are the renters who make well over 175k paying below market rate there.
Another big problem with Stuy Town are the renters who make well over 175k paying below market rate there.
I wish I knew the percentage of renters making over $175K at Stuy Town. I don't think it's too big.
Yes, which was exactly my point. These same people screaming for free market real estate pricing are the same ones who will bitch and moan when it costs $3.50 per shirt for dry cleaning, $60 for your weekly mani/pedi, and $18.50 for a movie.
Which is exactly what will have to happen when the piggishly rich are the only ones left within a stone's throw of Manhattan.
well, anonymass you pay one way or another, either via your taxes that go to subsidies (which are now ridiculous in NY state and city) or on your shirt, etc. I would prefer the later since I have control over that, whereas you have no choices in paying income/property/state taxes and people get priced out of their homes and businesses leave because of them.
Relocating or Moving?.
BEING relocated or moved?.
Trust the company that for decades has helped middle-class folks like yourselves cease and desist from continued occupation IMMEDIATELY.
Already got your 24 hour Notice to Vacate?.
ACME can have your crap bagged-up and ready to go in just 3 hours.
ACME can have you moved-out almost as fast as you can say, "Rent hikes!".
You get what you pay for. I think we're all witnessing the slow death of a great city.
Well, perhaps not the death, but the neutering anyway.
It's a representative microcosm of America The Empire in general. We no longer innovate, we no longer produce: we as a nation are content to scam, steal, plunder, and gorge ourselves with personal wealth all the while selling out our fellow citizens.
It's tragically shortsighted.
Well said, anonymass. May I add, what goes around, comes around and it may be coming sooner than you think.
Looks like it's time to buy into Sunset Park and Bay Ridge....a tad too far for most, but the only parts of So. Brooklyn relatively safe and calm.
I'm not one to somplain about thsi stuff too much - free markets tend to work themselves out anyway.
BUT, what does get my goat is that this land was practically given to MetLife for nothing by the city. Given how often this city seems to claim it's going to use imminent domain to turn peoples' homes into sports complexes, why can't the city tell MetLife it's taking this land back, using I.D. for the purposes of affordable housing?
I know that wouldn't happen, but I get irritated about how MetLife gets to run all the way to the bank on this one, when the land was essentially a gift from the city so that teachers and public servants could have somewhere affordable to live.
Dude, for the record, that should be "eminent domain", but you make a solid point.
http://en.wikipedia.org/wiki/Eminent_domain
(I know that wouldn't happen, but I get irritated about how MetLife gets to run all the way to the bank on this one, when the land was essentially a gift from the city)
Perhaps you are prepared to look at the evidence, as I have, and conclude that the era of government power being used for the less well off was a brief one, and is over. And that perhaps there should be less of it.
Look at the census data. Peter Cooper and Stuytown residents are much more educated and affluent that average. If they were not, there would be no talk of subsidizing them. I would have been happy if the tenant's bid had succeeded, but I'm not looking to subsidize those better off either.
More educated and affluent than average in what terms? In NYC terms? In national terms?
If the latter, that doesn't mean anything. NYC's middle class is more affluent than probably 90% of the rest of the country's upper class. Our population is many times over the national average in terms of average educational accomplishments.
"it makes no sense for the City Administration to preach the need for affordable housing on one hand and kick out these units on the other hand."
It makes perfect sense to Bloomberg staffers/political geniuses...
'Only the future knows the truth'
History has ytaught me that wealth prevails over all else...
"It's tragically shortsighted"
I've always felt this way about New York and NYers...
My comment is about the Stuytown realistate sale or deal. Just after World War II, the rich people in the realstate business and liberal politicians had a plan, to diplace many of the families that were loyal to the U.S. of America that fought in world war 2, Korea and Vietnam by driving up the price of three major commodities up so high you had to move from New York City or go broke they are: TAXES, FOOD AND RENT.
The plan is drive out all the middle class families and have Wealfare families work for the rich liberals at cheap LABOR RATES, while collecting wealfare. The governemnt must interceed and get rid of the business men and liberal politicians involved in this conspearancy, and CAP ALL RENTS SO THAT RETIRED PEOPLE, THE AGED AND THOSE PEOPLE RAISING CHILDREN WILL HAVE FUTURE IN NEW YORK CITY AS FREE BORN CITIZENS OF THIS COUNTRY. People should be more important to this country than the liberal's ALL MIGHTY DOLLAR!