Blackstone Group is leading a deal to buy New York's Stuyvesant Town-Peter Cooper Village, a transaction that would put Manhattan's largest apartment complex in the hands of the world's largest private equity firm and maintain some affordable housing at the property.
Blackstone, working with Ivanhoe Cambridge, will acquire the 80-acre enclave for about $5.3 billion, the company and city officials said Tuesday. Ivanhoe Cambridge is the real estate subsidiary of Caisse de Depot et Placement du Quebec, Montreal, which manages C$240.8 billion ($186.4 billion) in Quebec pension and other assets.
The purchase price is just less than the record $5.4 billion that prior owners Tishman Speyer and BlackRock paid almost nine years ago before walking away from the mortgage in 2010, marking one of the biggest collapses in the last decade's real estate boom.
The sale ends five years of uncertainty over ownership of the complex, home to about 30,000 residents and traditionally a housing haven for middle-class New Yorkers. The deal includes an agreement that would keep almost half of the more than 11,000 apartments affordable for 20 years. For Blackstone, it extends a push into owning rentals and makes it one of the largest residential landlords in Manhattan.
The transaction was formally announced at a news conference Tuesday featuring New York City Mayor Bill de Blasio, Blackstone real estate chief Jon Gray and City Councilman Daniel Garodnick, a lifelong resident of Stuyvesant Town-Peter Cooper Village.
Tishman Speyer and BlackRock handed the property over to lenders after its value plunged in the financial crisis and tenants successfully sued to stop a dramatic increase in some rents. Since then, it has been under the control of CWCapital Asset Management, which represents bondholders.
The purchase will be made through Blackstone's first fund for core-plus real estate, said a person with knowledge of the matter, who asked not to be named because the details are private. The open-end fund can hold assets for decades, unlike the firm's traditional property funds, which have a finite life and typically require holdings to be sold and money returned to investors in seven to 10 years.
Blackstone has about $8.5 billion of core-plus assets under management, President Tony James said Oct. 15. Such properties are typically high-quality buildings that require light renovation or leasing to boost returns.
The Stuyvesant Town transaction should be completed by the end of the year, Mr. Gray said at the news conference.