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Blackstone to acquire Manhattan's Stuyvesant Town for $5.3 Billion

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(Credit: MoneyTimes) The Stuyvesant Town and Peter Cooper Village apartment complexes are seen in front of the Empire State Building October 22, 2009 in New York City.New York
October 20
10:09 PM 2015

Blackstone Group LP, the world's largest private equity firm is expected to be the next firm that will acquire the 11,000 apartment complex in Manhattan's Stuyvesant Town. Although the deal is not official yet, news has been circulating that the complex will be acquired by the firm for a value around $5.3 billion.

The news is set to be good for most middle-class family living there as the apartment complex will still be preserved and not tear down or sold to others for higher rental payment. According to the New York Times, parts of agreement in the deal with Mayor Bill de Blasio is that the Blackstone Group LP will ensure that 5,000 apartments in the town will be retained at an affordable rental rate for the next 20 years.

This means that around 4,500 families whose income less than $128,210 per year will be able to afford a two-bedroom apartment in the area. While another 500 families whose income less than $62,150 per year will receive a special low rental rate for the same two-bedroom apartment.

A city council member for the Stuyvesant Town said that he is happy with the latest update regarding the fate of the town. According to him "For the traditional rent-stabilized tenants, they can take comfort in the fact that there is a very little incentive here for anyone to try to push them out."

Besides that, Blackstone will also receive lots of benefit from the acquisition including a waiver worth $77 million in mortgage recording taxes and also a $144 million low-interest loan through the Housing Development Corporation. A beneficial deal for the firm as they plan to venture more into housing area soon.

Under the deal, Blackstone will be partnering with other firms for the acquisition. This includes the Ivanhoe Cambridge as reported by The Wall Street Journal. This will set both firms as the next owner for the previously financially troubled 80-acres worth of housing.

Previously, the complex was sold by MetLife Inc to Tishman Speyer Properties L.P in a deal worth $5.4 billion in 2007. However, due to mounting debt misses, the complex was later acquired by CWCapital  Asset Management LLC in 2010 according to Reuters.

Details regarding the deal is still unknown as the agreement is still confidential until it is signed on Tuesday. Both Blackstone and CWCapital refused to comment regarding the deal for now.

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