The Largest Real Estate Deal in American History

Stuyvesant Town and Peter Cooper Village were built by Metropolitan Life, the largest life insurer in North America, with tax breaks and other subsidies for middle-income residents for returning WWII veterans. Complicating the deal is that 73% of the 12,232 apartments in the two, leafy developments are “rent-controlled” and thus truly affordable to working class Manhattanites.

“The tenants association at Peter Cooper and Stuyvesant Town is also putting together a bid of more than $4 billion based on a plan that involves selling some apartments at market and below-market rates, while preserving about 20 percent of the units as rentals affordable to middle-income families. But the offer is dependent on MetLife’s willingness to accept less money from the tenants if bids escalate to $5 billion and beyond.”

"Even as the condominium market has slowed, investors have increasingly bought pedestrian rental buildings, which are seen as relatively safe investments with potential windfall profits when the apartments no longer qualify for rent regulation."

The pending sale has become a political issue as middle-income neighborhoods are fast disappearing in Manhattan.

“It’s becoming clear that middle-class families can’t find a place to live,” said Brad Lander, director of the Pratt Center for Community Development. “But here MetLife is intent on making billions more by selling to a buyer who displaces middle-income people with higher-income people. But it’s not in the city’s interest to displace middle-class families.

MetLife executives say they do not have a continuing obligation to provide subsidized housing. They say the company’s 25-year agreement with the city to provide affordable housing expired in the 1970’s.

The Bloomberg administration, which has long trumpeted its plans to preserve and expand affordable housing for low- and middle-income families, has been grappling with the pending sale. Officials say they have talked to bidders, including the tenants group, and are trying to assess the relatively high costs of preserving Stuyvesant Town versus the lower cost of building affordable housing in Brooklyn, Queens, Staten Island or the Bronx.”

"City Councilman Daniel L. Garodnick, who lives in Peter Cooper Village and has been promoting a tenant bid, said this was a “defining moment in city history.”