MetLife puts its MH on the block

NEW YORK MetLife, the largest life insurance company in the U.S., is putting two of its prized multihousing properties on the market.

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Last year, it sold the MetLife Building at 200 Park Avenue, a 58-story, 2.8 million square-foot office tower, for $1.72 billion, the highest recorded price for an office building in America.

MetLife will set another record if it sells the Peter Cooper Village and Stuyvesant Town rental properties, together the largest apartment communities in Manhattan, totaling more than 11,200 units in 110 buildings spanning 80 contiguous acres.

“We believe current market conditions are very favorable, and we have decided to test the market to gauge buyer interest in these properties,” said Robert Merck, the head of real estate investments for MetLife.

Experts say the community could fetch upwards of $3.3 billion. Roughly 25 percent of the apartments are leased at market rate, and the remainder are under rent control. Based on a price of $350,000 a unit, the $3.3 billion price is very possible.

Purchasers from around the world are interested in owning the site, including real estate pension funds, individuals, private investors and REITs. A number of the city’s biggest developers and investment banks have also shown interest.

Archstone-Smith recently acquired Westmont, 163-unit, 16-story rental building in New York for $87.8 million and the KeyWest, a 20-year-old, 207-unit apartment community at 750 Columbus Avenue between 96th and 97th. It’s paying about $115 million, or $550,000 a unit, to the Gotham Organization.

In Manhattan, Archstone-Smith owns 12 communities, representing 3,908 units, including those under construction. Earlier this year it purchased the Marlborough House in Brooklyn, and the Gershwin on Eighth Avenue and West 50th.

Another possible purchaser is Equity Residential, which purchased a 135-unit apartment house at 600 Washington Street. Last November, EQR purchased Trump Place consisting of 1,325 rental apartments. Equity paid about $809 million, or $580,000 an apartment unit and $723 a square foot of rent-able apartment space.

If MetLife does sell its rental portfolio, increasing the number of additional condominiums available for sale or rental, the influx of product would have an overwhelming affect on the market.

Daniel R. Garodnick, who grew up in the apartments and represents their 25,000 residents on the City Council, is organizing a group of
investors to try to buy the two complexes and keep them affordable to the middle class.

It’s widely assumed that a buyer who pays up to $5 billion for the property will want, over time, to convert it to luxury apartments.