State of Wisconsin Investment Board has taken a 10% stake in the multi-billion dollar Stuyvesant Town – Peter Cooper Village apartment complex in New York, according to sources familiar with the transaction.
The pension fund said it co-invested $300m (€274m) of equity alongside Blackstone and Ivanhoé Cambridge’s acquisition of the 80-acre residential scheme.
Private equity firm Blackstone and Canadian investor Ivanhoé Cambridge bought the complex in December for $5.3bn, with $2.7bn of equity and around 50% of debt financing, according to sources with knowledge of the transaction.
The $300m co-investment gives SWIB a stake of approximately 10% in the complex. No other parties will be allowed by Blackstone to co-invest in the project.
Stuyvesant Town, which encompasses 11,200 units in 56 different buildings, is one of the largest apartment projects on the east side of Manhattan.
It was previously owned by Tishman Speyer and BlackRock which paid former owner and developer MetLife $5.4bn in 2006, using $4.4bn of debt. Lenders took possession of the scheme in 2010 following a default, and a number of investors lost equity on the investment.
It is understood that Blackstone invested in the complex on behalf of its open-ended, core-plus fund Blackstone Property Partners.
Around half of the complex’s apartments are leased at market-rate – as high as $10,000 per month, with 5,000 apartments at below-market level.
Blackstone and Ivanhoé Cambridge said they would ensure rental apartments remain affordable to “moderate and middle-income families for at least the next 20 years”.
They recently hired Rick Hayduk, formerly of Boca Raton Resort & Club, to manage the complex.
According to board meeting documents, SWIB is considering making five other core real estate investments, which could amount to $614m of capital commitments.
It is considering providing: $125m for a retail separate account; $89m for an office building separate account; $200m for a closed-ended fund that buys retail properties; $100m for an apartment fund, and $100m for an industrial joint venture.