$5bn Manhattan flats set US property record

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The Independent US

"For sale: residential property in attractive Manhattan locale. River views and gardens with fountains. Own private roads. High ceilings. Some renovations required. Currently occupied. Accept $5bn or near offer."

No such classified ad has been listed, because word of mouth will suffice to attract buyers. Never mind that the price being asked will ensure that it goes down as the most expensive sale of a single property in the modern history of the United States.

Formally on the auction block is a pair of apartment complexes, called Stuyvesant Town and Peter Cooper Village, that bestride 10 city blocks on the East Side of Manhattan from 14th to 23rd Street flanking the East River. Together they comprise 110 buildings with 11,000 apartments.

The seller is neither a tycoon nor the city, but rather the insurance giant Metropolitan Life, which has traditionally held a huge portfolio of buildings across New York. It built the complexes at the end of the Second World War to provide comfortable, if unglamorous, homes for returning veterans.

Today, the chunky brick stumps that are the apartment buildings are still short on aesthetic appeal and living inside Stuyvesant or Peter Cooper can have the feel of belonging to an institution. Strict rules govern matters such as pets (very few are allowed) and sunbathing in the garden is also discouraged.

But Met Life has engaged in a $300m (£160m) prettification scheme over recent years, which prompted rumours of a likely sale. It is also trying to reinvent the two communities as a place for luxury rentals appealing to young professionals.

Today, there are 25,000 people in Peter Cooper and Stuyvesant and many are still more middle class than affluent. This is largely because about two-thirds of the apartments fall under complicated rent-control laws that restrict the owner's ability to raise the rent.

Anyone spending $5bn, however, will need to find ways to maximise their rental returns. This will prompt fears that the days are coming to an end when the two communities offered sanctuary to middle-class families who would otherwise find few alternatives in overheated Manhattan. The complexes' current residents range from nurses, firemen and police officers to teachers and students.

Suzanne Wasserman, a historian and long-time resident of the complex, said it meant the process of squeezing "people who aren't just interested in money" out of Manhattan would accelerate.

Met Life is well used to seeking buyers for its properties. Last year alone, it sold a landmark tower at 1 Madison Avenue and the Met Life building, the skyscraper which used to be the Pan Am Building. The pair sold for $2.6bn.

Prospective bidders are said to be queueing already for Peter Cooper and Stuyvesant. Those expressing an interest apparently include UBS Bank, The Blackstone investment firm, a group of Dubai investors, and top New York property development dynasties.

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