Shortly after 9 a.m. on October 17, 2006, Rob Speyer, the strong-jawed 37-year-old future co-CEO of Tishman Speyer, called his father, Jerry, the company’s other co-CEO, on his cell phone and announced, blearily but proudly, that after fourteen hours of negotiations, the biggest real-estate deal in American history had been signed. Tishman Speyer, along with BlackRock Realty, had agreed to buy Stuyvesant Town and Peter Cooper Village, a sprawling 80-acre complex on the East Side of Manhattan, for a record $5.4 billion from MetLife, which had developed it with the help of Robert Moses and owned it since the Second World War.
By design, the deal was a changing of the guard, both for Tishman Speyer and for Manhattan. Though Rob Speyer had over the years taken more and more of a role in the company, the Stuyvesant Town transaction was an enormous moment for him. His father, a legendary New York City macher and a close Bloomberg ally, made a concerted effort to cede the spotlight to his son—his first visit to the complex was deliberately made at night, out of sight of the press. The Times called it Rob’s “very public introduction.”
Rob and his father saw the deal as taking place at a time of demographic transition in Manhattan. They had a very specific idea of the kinds of people who would be populating the new city. Stuyvesant Town and Peter Cooper Village—known as Stuy Town by most residents—were gargantuan symbols of the old city. Finished in 1947, the mammoth housing development had represented a kind of New Deal for returning veterans, and a sign of the power of government and corporate America to make the city hospitable to a rising generation. The Gashouse District, which Moses called a slum and the 11,000 residents who lived there called a neighborhood, was bulldozed to make way for the complex’s construction on the far east flank of Manhattan, from 14th Street to 23rd Street. Over the years, it has become one of the last bastions of the middle class in Manhattan, a distinctly unglamorous if verdant oasis—actual lawns, actual trees—of redbrick high-rises, where the traditional real-estate rules in the rest of the city didn’t seem to apply. The average rent-stabilized two-bedroom, if you were lucky enough to get one, could be had for $1,400 a month. Stuy Town was the kind of place where the children and grandchildren of immigrants ended up. Heavily Jewish, Irish, and Italian (blacks, shamefully, were excluded until the sixties), populated by teachers and government workers, MetLife employees and policy holders, among others, it was a city unto itself, with 25,000 residents and an emphasis on family. The complex has always had a pronounced civic ethos—as befits a place where many civil servants reside—that has given birth to such thinkers as Times columnist David Brooks and Obama strategist David Axelrod. With its workaday high-rises, it was the most modest of Utopias—an entire middle-class suburb miraculously set below 23rd Street on the East Side.
But by 2006, the sun seemed to be setting on the middle class in Manhattan. The blasting real-estate scene gave a whole new meaning to “market rate” apartments, and fewer and fewer people in the city believed in rent stabilization as a core value. The complex seemed a kind of anachronism—and, to the Speyers, a huge opportunity. To start with, the phrase “80 acres of Manhattan” is, to real-estate men like Rob Speyer and his father, a talismanic incantation. But it was more than just the acreage. Rob had a vision. He believed that by adding amenities and remodeling apartments—and forcing out longtime tenants who held on to their apartments in violation of rent-stabilization law—they could make Stuy Town hospitable to the new armies that were increasingly populating Manhattan, the recent college graduates with jobs in marketing and finance who worked long hours and wanted a full-service experience (including even a putting green).
“When we first looked at the property, we thought there were quality-of-life issues that made it less desirable than other Manhattan properties,” says Rob Speyer. “Access to public transportation was a challenge, so we introduced a trolley. There were few entertainment options, so we created an event series. We tried to improve a stark living environment, so we planted trees and we invested in a health club,” among other amenities. There are a passel of social programs—football parties, ski trips, margarita parties—that bring to mind some humongous cruise ship moored in the East River. The idea is that no one should come home from their new job and be lonely, if they don’t want to be.
The Speyers were not the only ones to think of real estate in these terms. Late in the bubble, many developers marketed new buildings not merely as places to live but as “lifestyle communities,” a sort of cross between a hotel and spa. In reality, these new developments were basically dorms catering to the thousands of young, recently transplanted professionals who would shuttle from work to their personal trainer to dinner at Ono. Buildings like André Balazs’s William Beaver House in the financial district seemed to promise a kind of post-frat lifestyle where every moment not spent at work was spent cocktail in hand amid nonstop hilarity.