Stuy-Town One Step Closer To Condominium Conversion?
Stuyvesant Town, one of New York City’s most iconic post-World War II private housing communities, has just been given a new appraisal. The independent appraiser for CWCapital Asset Management valuated Manhattan’s largest apartment complex at $3.2 billion, compared to its last appraisal dated back to 2010 when it was valuated at only $2.8 billion – $400 million less of its current assessment. CWCapital Asset Management ordered the appraisal on behalf of the bondholder owners.
Stuyvesant Town’s past has been overshadowed by a near bankruptcy and a lawsuit. Tishman Speyer Properties purchased it from MetLive for $5.4 billion when the deal closed on November 2006. Shortly after, tenants of Stuyvesant Town filed a class action lawsuit against MetLive and Tishman Speyer Properties worth over $215 million in rent overcharges and damages. The plaintiffs claimed that MetLive received tax benefits from the City of New York under the J-51 program, yet they still charged tenants market-rate rents instead of rent-stabilized rents, which is required under the program. A settlement worth around $146 million was reached in late November, which included approximately $68.8 million worth of cash to compensate for the overcharged rents that spanned for nine years.
Tishman defaulted on the mortgage and handed over the distressed 11,000-unit property to the current bondholders in January, 2010. Rose Associates managed the property from the same year until August 2012, when the present manager, CWCapital Asset Management, took over the duties. The Tenants Association had other plans though and tried to oust CWCapital to work with Brookfield Asset Management so the struggling massive apartment complex can be converted into condominiums.
A sale of the immense property is getting closer with the new appraisal and a condominium conversion is becoming more likely to happen.