Metlife May Sell Manhattan Properties Worth $5 Billion

Metropolitan Life, which owns a great deal of real estate all over the place, is entertaining bids for two properties on Manhattan’s Lower East Side, Stuyvesant Town and Peter Cooper Village. The company has described the bids received thus far as “robust.” At around $5 billion, robust seems an understatement. It will be the biggest real estate deal in the city’s history.

The two properties have 110 buildings in total on their 80 acres, which is a sizeable spread for Manhattan. They have over 110,000 square feet of retail space and 22,000 underground parking spaces (which themselves can command hundreds in rent monthly). About two-thirds of the 11,232 apartments come under the city’ rent stabilization and rent control laws – which would be unaffected by any sale.

According to Earthtimes.org, “MetLife had built Stuyvesant Town and the more affluent Peter Cooper Village in 1947 to provide housing for returning veterans. It excluded blacks and unmarried people at first, but protests and lawsuits in the 1950s and 1960s forced it to drop these curbs. The city acquired the land for the purpose and built streets in the area. It also froze property taxes for 25 years at the value of the land before redevelopment. The buildings have low ceilings, a limited number of bathrooms per unit and few amenities like swimming pools or gyms, which can command a better price. There are some 25,000 residents occupying the apartments in the complexes.” MetLife has also spent $300 million in renovations in recent years.

Any buyer, of course, would want to make a profit, and that isn’t easy with the rent rules in place. One obvious solution is to convert the rentals into condominia – the law says little about selling the apartments outright. This would eliminate most of the working and middle-class housing stock in the lower part of Manhattan, but most people who arrived in New York fewer than 20 years ago don’t have the rent stabilization benefits. They live in Brooklyn, Queens, the Bronx or Staten Island.

If MetLife decides to sell, it will radically change the atmosphere of the surrounding districts. The East Village, Gramercy Park and Union Square will change as the demographics change. A hue and cry is inevitable; the people involved, after all, are New Yorkers. Some will see the dollar signs and the promise of better quality dwellings. Others will complain that the character of the area will be lost, that these places will no longer be what they once were (but of course, they never were). And MetLife will have $5 billion in cash – and the problem of where to put it.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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