It was easy to get all misty-eyed last fall when Tishman Speyer purchased Stuyvesant Town and Peter Cooper Village for $5.4 billion. That sale was charged in so many ways. It was the most expensive residential sale in the city’s history and seemed like such an ominous symbol (the city’s swan song to middle-class ambition?).
On Tuesday, in a deal less fraught but no less meaningful, Tishman Speyer, along with Lehman Brothers, announced the purchase of real-estate investment trust Archstone-Smith in a deal valued at $22.2 billion.
Four times more expensive than the Stuy Town deal, it’s the largest deal in Tishman Speyer’s history. It’s the largest public-to-private acquisition ever among apartment REIT’s.
Perhaps there were no tears shed, but this deal is poignant in a more ostentatious (indeed, obnoxious) way: This deal was all about power—amassing it, securing it.
Jerry and Rob Speyer widened the gap even further among the top landlords in the city by massively expanding their footprint. With the Archstone apartments factored in, Tishman Speyer now owns roughly 14,500 apartments in New York City.
Archstone owns more than 86,000 rentals nationally, and brags that it’s the largest owner of rental apartments in Manhattan. (Well, used to be …. )
A spokesman for Archstone confirmed that it controls more than 3,000 units in the city, and a search on its Web site reveals that it owns at least 10 buildings in the city, including at least nine in Manhattan and one in Brooklyn Heights.
There should also be no confusion between the rent-stabilized buildings at Stuy Town and those controlled by Archstone. Available one-bedrooms in the Archstone 39th start now at $4,475 a month; in the Archstone 101 West End, a studio can run toward $2,900 a month; and at the Archstone Chelsea at 800 Sixth Avenue, one-bedrooms start at $3,905 per month.
As part of the buyout, Archstone’s C.E.O., Scott Sellers, will maintain his position.
So with rents already sky-high and the same team in place collecting the checks, Jerry and Rob Speyer won’t be burdened with hiring private investigators or cracking the math to figure out how to raise rents, like they’re doing at Stuy Town and Cooper Village.
Instead, their portfolio will only get thicker. In addition to the roughly 14,500 apartments, Tishman Speyer owns the MetLife Building at 200 Park Avenue, the entire multi-building complex at Rockefeller Center, and controls the leasehold position at the Chrysler Building.
Representatives for Tishman Speyer wouldn’t comment on the latest deal.
In the last five months, Tishman Speyer has found itself flush in money. It has sold more than $3 billion worth of properties this year, including 666 Fifth Avenue, the Lipstick Building on Third Avenue and 229 West 43rd Street, the former home of The New York Times.
Market analysts say that this buy is the start of a tidal wave of REIT’s getting gobbled up by private landlords. If that’s the case, who’s going to pony up next and cut the Secretariat-like lead that the Speyers have created among the city’s landlords?
Follow John Koblin via RSS.