A New York Times report said the Stuyvesant Town and Peter Cooper Village project in Manhattan, with its 110 red brick apartment buildings, may well be faced with foreclosure by early 2010 and have already eaten up $890 million targeted for apartment renovations, landscaping, and interest payments. Current owners, Tishman Speyer Properties and BlackRock, bought the project for $5.4 billion in 2006.
Rob Speyer, who is co-chief executive of Tishman Speyer Properties with his father, Jerry, told the Times the Stuyvesant deal went beyond the need for a cash infusion from the partners and their investors.
Included in the investors is California Public Employees’ Retirement System (CalPERS), the Florida State Board of Administration (SBA), and other pension funds, the Times reported. The SBA was informed recently that it may end up losing the $250 million it had in the Stuyvesant deal (see Fla. Pension’s NYC Real Estate Deal Goes Sour).
“The asset is going to require a restructuring,” Rob Speyer said, according to the Times report. “…we’ll speak to our debt holders as well as our fellow equity investors.”
According to the Times account, the original plan was to replace residents of the complex living in rent-stabilized units with others paying higher fees. The partners have been unable to convert apartments to market rates as quickly as they had imagined and rents, which had escalated for years, suddenly fell sharply as the economy slowed and layoffs prevailed.
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