Blackstone seeks $2.3bn financing on ‘Stuy Town’ acquisition

The Blackstone Group is seeking $2.3bn in financing for its acquisition of Stuyvesant Town-Peter Cooper Village, sources tell Real Estate Capital.

The Blackstone Group is seeking $2.3bn in financing for its acquisition of Stuyvesant Town-Peter Cooper Village, sources tell Real Estate Capital.

Blackstone and partner Ivanhoe Cambridge agreed this week to pay $5.3bn for Manhattan’s largest apartment complex after striking a deal with the city of New York regarding affordability guidelines for its 11,232 units.

stuyThe sale comes six years after Tishman Speyer paid $5.4m for the massive property, but with just $112m of its own equity, which ended in disaster after the firm defaulted on more than $4bn of debt.

Blackstone and Ivanhoe are said to be contributing $1.3bn of equity each.  

“This is a very different situation from back then,” Jonathan Gray, global head of real estate for Blackstone, assured a crowd at a press conference this week, local blog Town & Village reported.

He called the leverage being sought “very low,” noting that the firm was seeking lower returns and less risk on the “long-term” hold.

The sale includes an agreement with Mayor Bill de Blasio’s administration reserving a block of 5,000 apartments as “affordable” under city guidelines for the next 20 years. Blackstone also cannot pursue a condominium conversion or build new towers on the property.

In return, the city is providing Blackstone with a $144m “low-interest loan” through the Housing Development Corporation and waiving $77m in mortgage recording taxes.

Tishman Speyer’s bullish projections for rent increases fell way short, prompting a default on $4.4bn of debt in January 2010, when CW Capital took control on behalf of lenders.

Blackstone declined to comment.

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