Rents on nearly 600 vacant units at Stuyvesant Town and Peter Cooper Village are set to climb an average of $2,100 or more in the coming months, according to property manager Rose Associates, following the completion of an average renovation of $84,210 to each unit.
The project, set to cost roughly $48 million, according to special servicer CWCapital, which took control of the property early last year, includes the renovation of the 570 apartments in a similarly modern style to former owner Tishman Speyer, which renovated many of the units when it bought the 110-building complex for $5.4 billion in 2006, according to Robert Scaglion, a senior managing director with Rose Associates.
Scaglion said that despite the increases, which would bring rents roughly up to the market value of similar apartments, the units will remain rent-stabilized. Many of the units have rents of $900 a month, he noted, which would mean those rents would go up to roughly $3,000 a month.
“Basically, they’ll be brought up close to what market rate is… On a percentage basis there’s no rule of thumb,” said Scaglion, adding that the rents will reflect a vacancy allowance and one-fortieth the cost of the renovation, standard practice for rent-stabilized apartments.
“The properties are rent stabilized… the rent [will be] brought up to whatever the legal rent is,” he said. “If you could renovate it and get it up to $4,000 — well I don’t think the market is going to pay [that] for a one-bedroom in Stuy Town.”
Despite an earlier release from Fitch Ratings that suggested CWCapital would “convert” the vacant units in Stuy Town, Scaglion said that there is currently no plan in place to convert units off rent stabilization or to convert it to a co-op, as has been speculated.
A spokesperson for Fitch confirmed that it had meant to imply a “rehabbing of old units” — not a literal apartment conversion — would be taking place at the 11,227-unit complex, which spans from First Avenue to Avenue C and from 14th Street to 23rd Street.
Scaglion said that as many as 800 apartments at the complex could be renovated by the end of the year, and added that any conversion to co-op status is likely “a long way down the road.”
A spokesperson for CWCapital said the company had no comment.
With additional reporting by Adam Pincus