Blackstone Group LP and Canadian investor Ivanhoé Cambridge announced on Tuesday, Oct. 20 that they were negotiating a deal to purchase the 11,200-apartment Stuyvesant Town and Peter Cooper Village, according to the Wall Street Journal.
The 80-acre East Side complex is reportedly being sold for around $5.3 billion. Although it’s slightly lower than the $5.4 billion price of the property back in 2006 (especially when inflation is taken into consideration), it represents a major improvement from five years ago.
In 2010, the WSJ states, the property was valued under $3 billion and was close to being foreclosed. It was lucky to make it through a period of high foreclosure rates in 2013 (when one in every 96 homes filed for foreclosure), but it has taken some time for the complex to regain value since then.
Jonathan Gray, head of real estate at Blackstone, explained in a recent press conference that investors are now clambering to grab a piece of New York real estate.
“There is a shortage of apartments in New York City,” Gray said on Tuesday. “We think rents will go up — that’s part of the reason we’ve been investing so much.”
As the New York Times reported, rent is expected to rise very soon for at least 50% of apartments located in the city; this could mean increases of anywhere between $4,000 and $7,000 per month for an apartment offered at market rate.
As Stuyvesant Town began moving more units away from rent-regulated agreements and into market-rate agreements, the overall collective income of its residents began rising. Less than half (45%) of its residents still pay regulated rents, which is down from 71% in 2006, but Blackstone agreed to keep a large portion of units under rent-regulated terms for at least 20 years.
The 10-year journey of Stuyvesant Town hasn’t exactly been typical of New York real estate — but then again, New Yorkers are always finding new ways to adapt to city living, and Stuyvesant is no exception.