Why Stuy Town Didn't Hit Its Potential

A memo sent by MetLife to Tishman Speyer and Blackrock Realty shortly before their $5.4B purchase of Stuyvesant Town and Peter Cooper Village in 2006 outlined how converting rent-stabilized units to free market could be a windfall for the new owners. The memo floated out $504M as the NOI the complex could expect to reach by 2017 using that strategy. It didn’t exactly come to pass, as The Real Deal, which has a link to the memo on its site, reports.

Before the ’06 sale, MetLife projected that less than 30% of the complex’s units would be rent stabilized by 2018. But a couple of weeks after Blackstone and Ivanhoé Cambridge announced they’d be picking up the complex for just about the same price paid in ’06, over half of its 11,241 units are rent regulated, and the new owners are obligated by contract to keep at least 5,000 units regulated until at least 2035.

The memo mentions the possibility of condo conversions, the sale of air rights, razing at least one of the buildings and other ways a buyer could get the most bang for its buck by owning the city’s biggest apartment complex. [TRD]

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