My intitial reaction to the story in today’s New York Times was "not again, less New York City housing for the middle class, what a shame." I have written before about what a mistake it would be to turn Manhattan into an island of the rich.
Stuyvesant Town is really the poster child for rent stabilization in New York. Of course, if the property changes hands those rules don’t evaporate. Doubtless, many people living there now, who meet all the legal guidelines for rent stabilization, will remain there with stable rents for years to come. But there will be teams of lawyers looking at ways to get those properties ready for conversion to condominiums or market rate rents. That in and of itself might inspire a fair number of tenants to move out, as the feel of the place will undoubtedly change.
And at the same time, this won’t help the total amount of affordable housing in Manhattan.
For me, that lament was immediately followed by "Who do I know that may have access to the kind of money it would take to snatch up this amazing urban parcel?"
First some back story on the 110-building site north of 14th street on the East Side. Charles V. Bagli and Janny Scott report:
Behind the scenes, the sale has already drawn interest from dozens of prospective buyers, including New York’s top real estate families, pension funds, international investment banks and investors from Dubai, according to real estate executives, even though the marketing book will not be released to bidders until next week.
The deal is likely to lead to profound changes for many of the 25,000 residents of the two complexes, where two-thirds of the apartments have regulated rents at roughly half the market rate. Any new owner paying the equivalent of $450,000 per apartment is going to be eager to create a money-making luxury enclave, real estate executives say.
The sale would only add to the seismic cultural shifts already under way in New York City and especially in Manhattan, where soaring housing costs have made the borough increasingly inhospitable to working-class and middle-class residents. It would be another challenge to Mayor Michael R. Bloomberg’s effort to stabilize and expand the number of affordable apartments in the city.
I admit I quickly sent out an email to the owner of a private equity fund asking if he was ready to get into real estate. Half joking, I would be lying if I didn’t tell you that part of me thought he would respond by saying, "Wow, yes, what an opportunity!"
Wisely, he didn’t. To compete with the likes of Related, Glenwood, Vornado and the like on a $5 billion dollar deal would be foolish on anyone’s part in my opinion. These players know what to do with a prime piece of real estate like this.
I also must say that although the development of such a large scale project as this is quite exciting for me as a real estate broker, it does evoke sadness that more middle income people are going to be forced out of Manhattan. Another step toward Manhattan becoming an exclusive island for the wealthy. How long before Central Park is converted into a golf course?
