Tishman Speyer Properties and BlackRock Realty have signed the largest ever American real estate deal, agreeing to pay $5.4bn (£2.89bn) for an 80-acre corridor of apartment buildings along Manhattan’s East River.
Metropolitan Life, the US insurer, sold Stuyvesant Town and Peter Cooper Village to Jerry I. Speyer’s property company, and his investment bank partner, who out bid more than half a dozen other bidders.
The auction for the 11,000 apartments, built by MetLife for returning war veterans in 1947, set off an intense debate over the gentrification of one of New York’s most culturally diverse neighbourhoods.
A large majority of the apartment are rent-controlled, raising questions about the affordability of the flats once market prices kick-in under their new ownership.
Speyer, who also controls New York’s Rockefeller Center and the Chrysler Building, has assured tenants that they will not see their rents soar in the near future.
Tishman and BlackRock’s bid, which values the units at about $485,000 (£260,000) per flat, was competing with rival offers from Apollo Real Estate, Lehman Brothers, Vornado Realty Trust and a bid that include a group of tenants.
MetLife will make $3bn (£1.6bn) from the sale after tax.
References: EGi News 18/10/06
