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Blackstone, Ivanhoe close on $5.45B Stuy Town buy

By: Sabina Mollot

Blackstone and Ivanhoé Cambridge announced on Friday that they have closed on the $5.45 million purchase of Stuyvesant Town and Peter Cooper Village.

The companies have assumed ownership from CWCapital, the special servicer since 2010.

The $5.45 billion closing sale beats the record $5.4 billion previously paid for the 11,000-unit complex by a Tishman Speyer partnership, but only on paper, according to the new owners.

A spokesperson for Blackstone said the net price was still the previously reported $5.3 billion. The heftier figure includes full payment of transfer taxes.

Prior to announcing the deal in October, the city had agreed to provide Blackstone with around $225 million in tax breaks and a loan that will be forgiven.

Meanwhile, the closing was rushed in order to prevent another lawsuit against CWCapital, this time threatened by commercial landlord SL Green, according to the New York Times.
SL Green was involved the 2006 sale of the property, having lent and lost about $200 million. But, the article noted, a real estate investor whose partners include Fortress, CW’s parent company, had challenged a midtown skyscraper SL Green wants to build.

“Fearing that the suit could delay the closing, the company offered SL Green what it considered a token amount, $10 million,” reported the newspaper.

The litigation threat came on the heels of a suit against CW filed by a group of lenders led by hedge fund Appaloosa which was utlimately withdrawn late last week.

That group had filed suit over CW being able to walk off with a reported $566 million in fees from the sale and other services rendered at Stuyvesant Town.

CWCapital didn’t comment on any of the law suits, instead offering a statement noting its accomplishments at the property, such as boosting income and bringing “stability.”

“Since taking over PCVST, CWCapital has resolved four major litigations, doubled cash flow and tripled the value of the asset,” said Andrew MacArthur, managing director at CWCapital.

“We are very pleased that we have achieved a full recovery for the bondholders we represent while simultaneously delivering long-term stability to the PCVST community.”

As special servicer, CW raised net operating income at the property from $110 million to $210 million and implemented $150 million in capital improvements to upgrade the infrastructure.

On the closing, Jon Gray, Global Head of Real Estate for Blackstone, cheered the news in an official statement.
“We are proud to have entered into long-term partnership with the PCVST community and the City of New York,” he said. “We look forward to working together with them to preserve what makes this community so special.”

Daniel Fournier, chairman and CEO of Ivanhoé Cambridge said, “We are honored to share with Blackstone the responsibility of the future of PCVST. This investment is a win-win for the community of 30,000 residents, for our investors and for New York.”

The deal, touted as “the mother of all preservation deals,” by Mayor Bill de Blasio, will preserve affordability at 5,000 of the complex’s apartments for the next 20 years.

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