Investors have agreed to pay $5.4 billion to buy a pair of big residential real estate developments from MetLife Inc.
Units of Tishman Speyer Properties Inc., New York, and Black Rock Inc., New York, have formed a joint venture that has agreed to pay that price to buy Stuyvesant Town and Peter Cooper Village from MetLife, New York, the company that is famous for using Snoopy as its spokesdog.
The properties, located on First Avenue between 14th and 23rd Streets in Manhattan, were built in the late 1940s by MetLife.
Residents of the 11,232 apartments, many of which are “rent-stabilized,” have wondered how the deal might affect them.
Jerry Speyer, president of Tishman Speyer, has tried to reassure the development residents.
“The thousands of tenants in rent-stabilized apartments are completely protected by the existing system,” Speyer says in a statement accompanying the deal announcement. “No one should be concerned about a sudden or dramatic shift in this neighborhood’s make-up, character or charm.”
Securities analysts have welcomed the deal, and the chance to refer to Snoopy.
Saul Martinez, an analyst at Bear, Stearns & Company Inc., New York, has published a commentary, “Snoopy Moving On Out Of The Lower East Side,” suggesting that MetLife may have been earning just $50 million per year on a property with a price that will bring it a gain of about $3 billion.
If that analysis is correct, MetLife could significantly increase ongoing profits simply by putting the proceeds from the sale in bonds, Martinez says.
But Martinez predicts that MetLife will use some of the cash to buy back stock and use some to expand its business.
“We believe that MetLife may seek opportunistic acquisitions in various businesses, including group insurance and in select non-U.S. markets,” Martinez writes.