Stuyvesant Town-Peter Cooper Village: Second Largest Ever Commercial Mortgage Default
January 25th, 2010Via: Bloomberg:
Tishman Speyer Properties LP and BlackRock Inc. ceded control of Stuyvesant Town-Peter Cooper Village, New York’s largest apartment complex, to lenders after its value plummeted and the owners were prevented from raising rents.
Tishman, which bought the 80-acre property with BlackRock Realty Inc. in 2006 for $5.4 billion, missed a $16.1 million debt payment on Jan. 8. Gramercy Capital Corp., which holds some of the debt, asked to have Tishman removed as manager of the buildings, three people familiar with the matter said last week.
“We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the city,” Tishman and BlackRock said in an e- mailed statement today.
The New York-based investors bought the developments from insurer MetLife Inc. near the top of the market with plans to remodel and raise the cost of rent-regulated units to market rates. On Oct. 22, the New York Court of Appeals in Albany ruled that increases on about 4,350 apartments were illegal. That month, Fitch Ratings valued the property at $1.8 billion.
A default involving the 11,200-apartment complex would be the second largest for a commercial mortgage-backed security, behind the $4.1 billion default by Extended Stay America Inc. hotels last year, according to Fitch.
