- The Washington Times - Tuesday, October 17, 2006

NEW YORK (AP) — One of the largest apartment complexes in the nation was sold to a developer yesterday for $5.4 billion after a bidding war that included tenants who feared their middle-class homes would be replaced by luxury apartments.

MetLife Inc. announced the sale of the Peter Cooper Village and Stuyvesant Town apartments to the Tishman Speyer development company in a joint venture with BlackRock Realty.

“The opportunity to buy 11,000 apartments in a terrific neighborhood in this city doesn’t come along very often, maybe once in a generation,” said Robert Speyer, Tishman Speyer’s senior managing director. “You live for opportunities like this one.”

The $5.4 billion price tag makes the sale one of the biggest residential real estate deals ever.

The 110 apartment buildings along the East River include mostly below-market, rent-stabilized apartments, a community center and private parkland. Generations of families of lawyers, teachers and firefighters have lived in the apartments originally built for returning World War II veterans, and have called it the last bastion of middle-class housing in Manhattan’s supercharged real estate market.

“We don’t want Stuyvesant Town and Peter Cooper Village to be a place of pied-a-terres over the long term, a luxury gated community, one which is only accessible to the richest New Yorkers,” said Councilman Daniel Garodnick, a resident who was part of a tenant-backed bid of $4.5 billion for the properties. The tenants were among several bidders for the complex.

Mr. Speyer said the residents of rent-stabilized apartments are “very clearly protected by law” and will be able to keep paying the below-market prices as long as they still live there. He said there are no plans to convert any of the apartments into condominiums.

“Obviously, I think they’re going to raise them to market,” said Dottie Herman, president and chief executive officer of the Prudential Douglas Elliman real estate firm.

Miss Herman, whose firm used to manage Stuyvesant Town, said the sale could help alleviate a shortage of rentable Manhattan apartments. “They’ll end up being fair prices, for New York City prices,” Miss Herman said. “I don’t think they’re going to be top of the market.”

Alvin Doyle, who heads the complex’s tenants association, said the apartments renting at market prices are not filling up. He pays more than $1,200 a month for a two-bedroom rent-stabilized apartment; more than 70 percent of the apartments are rent-stabilized. Mr. Doyle said apartments his size that are not rent-stabilized are priced at close to $5,000 a month.

Tishman Speyer is one of the largest real estate companies in New York City, and its signature properties include Manhattan’s Rockefeller Center, the Chrysler Building and the MetLife building.

MetLife said it expects an after-tax gain of approximately $3 billion from the deal.

The insurer was commissioned in the 1940s to design housing on the Lower East Side to accommodate returning veterans. Construction began in 1945; by the time the buildings were completed, 200,000 people had applied to move in.

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