Insignia hired for StuyTown.

MetLife leaving management business; Insignia gets retail, 11,000 apartments

The Metropolitan Life Insurance Company will outsource the management of Stuyvesant Town and Peter Cooper Village to the Insignia Financial Group, the firms announced jointly.

The insurance giant will continue to own both Lower East Side residential properties, which encompass more than 11,250 apartments in 110 buildings, and maintain an on-site management office at 317 Avenue C, but the day-to-day maintenance will be taken care of by Insignia.

The changeover will become official May 1.

Insignia will be responsible for such actions as collecting rent, hiring and maintaining the staff, negotiating with unions, awarding contracts for repairs and capital improvements.

In these situations, the independent manager would typically keep between 3.5 and five percent of the rent it collects as its fee. For a project this size, that fee could pass $10 million per year.

According to industry sources, three subsidiaries -- Insignia Residential Group, Douglas Elliman and Insignia/ESG -- will jointly handle the assignment. Insignia/ESG will work with the retail tenants and serve as retail leasing agent, and Douglas Elliman will cover all new and renewal apartment leases.

With that arrangement, the deal will be worth even more.

Spokespeople for Insignia/ESG and Douglas Elliman referred all calls to MetLife, who refused to comment.

Residents of Peter Cooper Village and Stuyvesant Town were notified of the deal by a leaflet dated April 17. It was signed jointly by James B. Digney, senior vice president of MetLife and William M. Potts, senior project director at Insignia/ESG.

In the notice, the two seemed to ward off speculation that the properties may be for sale any time soon. When the story was first reported in Real Estate Weekly in February, Jerome Belson, chairman of the Associated Builders and Owners of New York, speculated that the search for a professional management team for the complex was "to their benefit, certainly," and a way to help Metlife "keep their eye on the ball and just sell insurance."

MetLife has been tight-lipped about the process, and refused to confirm they were even looking to, outsource the management. In February, a MetLife spokesperson said tersely, "We don't comment on rumors."

MetLife built both complexes in the 1940s as affordable apartments for returning GIs, and has owned them ever since. Today, more than 20,000 people live in the two complexes. MetLife also owns its share of class A office space in the city, including their headquarters at One Madison Avenue, the former Pan Am building at 200 Park Ave. and 551 Fifth Ave. Recent reports have the company moving out of its One Madison Avenue tower for more affordable space in the outer boroughs or in New Jersey.