By: Mike Mustiglione
New York City’s real estate professionals are all abuzz over a recently filed lawsuit.
The suit, lodged against the owner of apartment complexes Stuyvesant Town and Peter Cooper Village, has some investors and brokers feeling nervous.
The issue at hand centers on the question of whether or not landlord the Blackstone Group is free to charge market-rate rent increases for thousands of apartments starting in the next few months.
“A ruling in state court could answer that by wading into a murky area of the rent reforms passed last June. Those rules prevent landlords from jacking up regulated rents, but don’t specify whether apartment buildings that received a popular tax break called J-51–which is at the heart of the Stuyvesant Town case–should be counted,” reported Crain’s New York Business.
“Including J-51 in the changes to the rent rules was not originally conceived, but the issue is evolving at this point,” Assemblyman Steven Cymbrowitz told Crain’s. “I’m having my staff look at it and we should get their analysis soon on what the consequences could be.”
J-51 is a property tax exemption and abatement for renovating a residential apartment building or conversion to multiple dwellings. J-51 is a property tax exemption and abatement for renovating a residential apartment building. The benefit varies depending on the building’s location and the type of improvement. The NYC Department of Housing Preservation and Development (HPD) determines the eligibility for the program. Finance administers the benefit. Once approved you must complete and submit Finance’s J-51 Property Tax Exemption and Abatement Application. You need to include the certificate of Eligibility from HPD with your application.
Blackstone, of course, remains a major player. The firm, headed by Stephen Schwarzman and Jonathan Gray, recently completed what forbes.com has referred to as “the next step in its conquest of Wall Street. On Thursday morning, Blackstone, the world’s largest private equity firm with nearly $600 billion in assets under management, eclipsed investment banks Goldman Sachs and Morgan Stanley in market value, making it the second most valuable standalone investment firm on Wall Street to exchange traded fund giant BlackRock.”
Indeed, the firm’s market capitalization closed Thursday trading at $69.2 billion, Forbes added, “while Goldman Sachs closed at a value of $69 billion, according to data provider Sentieo. Morgan Stanley, after its February deal for online broker Etrade, changes hands at a market value of about $65 billion.”
