Co-op owners rallied outside a Midtown building owned by tech billionaire Michael Dell to protest threats to Carnegie House, one of the last affordable buildings on Billionaires' Row. Residents who own apartments do not own the ground beneath the building, and the ground lease owner can set rent. The ground lease was bought in 2014 for $261 million by an entity tied to Rubin Schron and David Werner, with $100 million financing from MSD Partners in 2023. An arbitration panel ruled that ground rent could rise from $4.36 million to roughly $24 million, producing steep maintenance hikes and risking long-term resident displacement.
Just down the block sits Carnegie House. It's the longtime home of many rally attendees - and one of Dell's recent real estate investments. Residents of the co-op, known as the only remaining affordable building on Billionaires' Row, are facing the looming threat of displacement from a 450% rent hike. The issue is the co-op's ground lease. Though residents own their apartments inside, they don't own the land the building stands on - the ground lease owners do.
The current landowner of the Carnegie Hall lease, an entity tied to real estate investors Rubin Schron and David Werner, purchased the ground lease in 2014 for $261 million. They received a $100 million in financing from Michael Dell's MSD Partners in 2023, the Real Deal reported. After recent negotiations between the co-op and the landowners failed, an independent arbitration panel ruled in July that the owners could hike the rent from $4.36 million to roughly $24 million, the Wall Street Journal reported.
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