Manhattan’s Peter Cooper Village/Stuyvesant Town Under New Management
- Aug 30, 2012
By Scott Baltic, Contributing Editor
In the latest episode in their storied, and recently troubled, history, management of the massive Peter Cooper Village and Stuyvesant Town apartment complexes on Manhattan’s East Side will be taken over, effective tomorrow, by CompassRock Real Estate, it was announced Tuesday. CompassRock is a subsidiary of CW Financial Services, as is its client, CWCapital Asset Management LLC, the trustee for the properties’ bondholders.
The change is somewhat less substantive than it might appear, however, because Rose Associates’ Sean Sullivan, who was named general manager of PCV/ST earlier this year, will remain, as will the on-site management staff. Nonetheless, CWCapital Asset Management (CWCAM) has articulated some specific goals for the new management.
PCV/ST comprises 56 buildings totaling 11,250 apartments with about 25,000 residents on 80 acres near the East River. The complexes were begun during World War II by the Metropolitan Life Insurance Co. to provide housing for returning military veterans, around the same time that MetLife also developed Parkchester, in The Bronx, and Riverton, in Harlem. (The latter is owned by CWCAM.)
In 2006, MetLife sold PCV/ST to Tishman Speyer Properties and BlackRock Realty Advisors for what was subsequently seen as the wildly inflated price of $5.4 billion, plus $590 million in reserves and $240 million in closing costs.
By October 2009, when the New York State Court of Appeals found for the plaintiffs in a suit by tenants alleging the illegal conversion of hundreds of units from rent control to market rents, the real estate market had already fallen drastically. By that point, at least one investor in the Tishman/BlackRock purchase, the Florida Retirement System Pension Plan, had written off its $250 million equity investment.
Tishman defaulted on the mortgage in January 2010, creating the largest commercial mortgage default in U.S. history. The PCV/ST complex was then valued at about $1.9 billion.
Working with Rose Associates, the existing property manager, CWCAM reportedly renovated and leased more than 900 vacant units and restructured the properties’ collective bargaining agreements. Earlier this year, CWCAM also restructured PCV/ST management, reportedly helping to increase net operating income by more than 45 percent on an annualized basis.
According to a CWCAM spokesperson, CompassRock will further improve the properties’ performance through a management fee reduced by 33 percent and “several specific technology and operational initiatives that it will undertake immediately upon transition.” These initiatives were not elaborated on by the firm.
Amenities at PCV/ST include a fitness center, a seasonal greenmarket, an outdoor ice rink, outdoor events (including movies, sports screenings, family carnival and music concerts), kids play areas, a café, 15 outdoor recreation areas, concierge services, storage facilities, a shuttle service and parking garages.
Rents in Stuyvesant Town currently run about $3,100 to $3,250 a month for a one-bedroom apartment and about $5,150 to $5,650 for a three-bedroom. Rents at Peter Cooper appear to be slightly higher, by perhaps 10 to 15 percent.