Brookfield Asset Management and tenants of Stuyvesant Town and Peter Cooper Village are making a bid to take over the massive apartment complex of over 11,000 units on Manhattan's east side.
Tenants hope to convert some units into condos or co-ops, where residents could buy their apartments or remain as rent-regulated tenants.
This is an important moment for our community and for empowered tenants across the city, but it is only the beginning, said Al Doyle, president of the Tenants Association, in a letter to neighbors, Over the coming months we will be gathering input and holding a communitywide conversation as we finalize our bid.
Brookfield and the tenants have a number of obstacles: enough tenants must indicate their support of the bid, and an actual amount for the bid has not been determined. Brookfield and tenants would have to negotiate a deal with CW Capital, which is servicing the property for senior lenders who hold a $3 billion mortgage after the former owners Tishman Speyer and BlackRock Realty defaulted last year.
In the coming months, we will work with the tenants association on a proposal that will provide real value for Stuyvesant Town-Peter Cooper Village creditors, while giving tenants the stability and affordability they deserve, Barry Blattman, a senior managing partner at Brookfield, said in the statement.
The tenants had previously submitted a $4.5 billion offer to buy the complex at the height of the boom in 2006, when former owner and developer Metropolitan Life put it up for sale. Tishman Speyer, a large office landlord that owns Rockefeller Center and other properties, and BlackRock eventually won the property for a record $5.4 billion.
Tishman Speyer spent millions landscaping the housing complex and rebranding it for young professionals and college students in an attempt to increase rents. But following the housing crash in 2008, Tishman's cash reserves to make mortgage payments dwindled and it defaulted on the property last year.
To add further uncertainty, a court ruled that Tishman had illegally deregulated rent regulated apartments while receiving tax abatements, but it was unclear how much back rent would be owed to tenants whose apartments were deregulated. Attorneys for the tenants have estimated that $200 million is owed, but it hasn't been determined how that amount would be paid out.
Although the process is still in its early stages, local politicians including Senators Chuck Schumer and Kirsten Gillibrand, Congresswoman Carolyn Maloney, Manhattan borough president Scott Stringer, State Senator Tom Duane and City Councilman Dan Gradonick, a Peter Cooper Village resident, praised the bid, which they said would preserve affordable housing in the city.
Publicly traded Canadian firm Brookfield Asset Management has around $150 billion in real estate, infrastructure and energy holdings. Its subsidiaries include Brookfield Office Properties, the landlord that controls World Financial Center and Zuccotti Park in Manhattan. Brookfield also has a stake in mall operator General Growth Properties.
The tenants are scheduled to meet on Dec. 3 to discuss the bid.