U.S. life insurer and financial services company MetLife Inc. says it is considering the sale of its Peter Cooper Village and Stuyvesant Town properties – an 11,000 apartment unit complex in Manhattan that covers an area of 80 acres.
Although John Calagna, a spokesman for MetLife, would not comment on the price, published reports have suggested that the property could be sold off for $5 billion, making it one of the largest property sales in U.S. real estate history.
Also, he declined to provide sales materials for the properties, saying that they are only being provided to qualified bidders.
The brokerage on the deal is CB Richard Ellis, and MetLife says it expects the formal bidding on the property to end sometime this month. The life insurer notes that it hopes to have the sale completed by the end of the year. The properties are actually owned by MetLife affiliate Metropolitan Tower Life Insurance Co.
‘We have not decided to sell Peter Cooper Village yet. It is not final. Right now, we are soliciting bids,’ Calagna says.
In a press release issued by MetLife, Robert Merck, head of real estate investments for the insurer, said the company believes ‘current market conditions are very favorable, and we have decided to test the market to gauge buyer interest in these properties.’
The company added that there is a lot of capital seeking high-quality real estate of this caliber, and MetLife anticipates that it will see excellent market pricing for these properties.
This transaction, however, will not be the first New York City skyline landmark to be put up for sale recently by MetLife.
In May 2005, the life insurer sold its 200 Park Ave. property, a 2.8 million square-foot space that is connected to Grand Central Terminal. That deal was brokered by Cushman & Wakefield. The property was purchased by Tishman Speyer Properties for $1.72 billion – then touted by Cushman as the largest single building sale in New York City history.
The properties
Peter Cooper Village sits on Manhattan's East Side next to Franklin D. Roosevelt Drive, between 23rd Street and 20th Street. Stuyvesant Town sits between 20th Street and 14th Street. The property was first opened in 1947. According to ‘The Encyclopedia of New York City,’ edited by Kenneth Jackson, 500 existing buildings were demolished in 1945 to make way for the project. By 1949, all 2,495 apartments in Peter Cooper Village were leased. The apartment buildings range from 12 to 15 stories.
Stuyvesant Town was built in 1943 for $112 million. This project was built after the creation of a state law designed to encourage slum clearance by private firms, according to Jackson's encyclopedia.
Robert Moses, the power broker who had much say in the creation and shaping of modern New York, initiated the Stuyvesant Town project. Stuyvesant Town was designed by architects Irwin Clavan and Gilmore Clarke. The property is made up of 35 buildings that are 13 to 14 stories high, and it has 8,756 rent-stabilized apartments. The first units were open for rent in 1947, and many were homes for GIs returning from World War II.
Stuyvesant had 20,000 residents in 1990, while Peter Cooper Village had 5,000 residents, according to ‘The Encyclopedia of New York City.’ CMI
E-FYI
Executes First CDO Issuance
Arlington, Va.-based Kodiak Funding LP recently securitized a $774.7 million collateralized debt obligation (CDO) composed of real estate investments and real estate operating companies. Kodiak, through Kodiak CDO I Ltd., issued these notes in a private placement to institutional investors.
The assets of the CDO consist of trust-preferred securities of a broad range of issuers in the real estate sector, achieving diversification through asset type, geography, issuer, size of issue and other factors, the company says. Kodiak invests primarily in real estate operating companies, real estate investment trusts, builders and developers, families with substantial real estate holdings, and corporate owners of ancillary real estate. KODIAK CDO Management LLC will manage the CDO.
‘We are extremely pleased with the quality of our first CDO execution,’ says Jeff McClure, chief executive officer of Kodiak. ‘Institutional investors worldwide have chosen to invest in Kodiak CDO I, emphasizing the international desire for exposure to the U.S. real estate market through alternative investment vehicles.’
Division Offers CMBS Loans
RBC Capital Markets, an international corporate and investment bank, has launched its Real Estate Mortgage Capital business, which will initially focus on providing fixed- and floating-rate commercial mortgage-backed securities loans and later offer collateralized debt obligation loans in the U.S.
‘Our goal is to provide our clients with strategic expertise backed by capital and full distribution for debt and equity for all types of real estate,’ says Mike Coster, head of RBC Capital Markets' real estate investment banking group. ‘By adding CMBS capabilities, bringing on additional senior bankers and restructuring our equity research platform, we can now provide a full product suite to our public and private real estate operator clients throughout North America.’
The company has appointed several employees to manage the new division. Among them are Dan Smith, a 20-year industry veteran who will head the group, and Dan LePage, who will oversee the business's real estate balance sheet lending program. The firm has also hired Kevin Stahl and Bryan Maher for the real estate investment banking group.
The Real Estate Mortgage Capital division is based in New York and Dallas, with offices planned for Chicago, Phoenix and Newport Beach, Calif. More offices are expected to open as the platform grows, the company says. CMI
E-Dealmakers
CO: VENTANA APARTMENTS, DENVER
WHAT: The Ventana Apartments is a 300-unit apartment community originally built in 1971. The property is located in a quiet residential neighborhood one block from I-25.
WHO: CBRE | Melody arranged the financing for the acquisition and renovation of the apartment complex.
$$$: $20.4 million.
TERMS: The financing was structured as a $16.4 million senior loan with an additional $4 million of mezzanine financing. The senior loan provided 80% of the total acquisition and renovation costs, with the mezzanine financing covering 90% of the remaining equity required.
CBRE | Melody: (303) 293-9330.
NY: RETAIL/OFFICE PROPERTY, BRONXVILLE
WHAT: This 80,000 square-foot retail/office property is located across the street from Lawrence Hospital and the Metro North train station. Both the office space located on the second floor and the retail space on ground level have had significant upgrades as new leases have been signed over the past three years. North Fork Bank, Houlihan O'Malley Appraisals and Medicom International are among the 32 tenants in the building.
WHO: White Plains, N.Y.-headquartered Houlihan Parnes/iCap Realty Advisors, a national real estate investment firm, placed the financing on the property. Part of the process involved in placing the new loan was defeasing the existing debt, which added an additional layer of complexity to the transaction. Thatcher Proffitt & Wood handled legal matters for the borrowers.
$$$: $9.5 million.
TERMS: The loan carries a fixed 6.18% rate for 10 years, with an interest-only option for the entire loan term.
Houlihan Parnes/iCap Realty Advisors: (914) 694-6070.