Standard & Poor Lower Ratings For Stuyvesant Town and Peter Cooper Bonds
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Tishman Speyer Properties is in a pickle. After making the biggest real estate deal ever when it purchased Peter Cooper Village and Stuyvesant Town in Manhattan, the company took out bonds to cover the cost of 5.4 billion dollars.
However in the meantime the property values have dropped 10 percent on the two landmark communities and efforts to gentrify the communities and reduce the amount of rent controlled apartments faces tough community opposition.
The net result, less potential earnings and the companies reserve funds have been being spent forcing Standard & Poor to cut the bond ratings.
So now Tishman Speyer is caught in a pickle. They are facing higher costs on their bonds and have an impaired cash position so investments in Peter Cooper and Stuy Town will have to be cut back.
Was this New York’s greatest real estate boondoggle? MetLife is looking very smart right now getting this price and getting out of a Manhattan real estate market that is heading south.
And there was an immediate reaction in the real estate world: Tishman Speyer Properties, which controls Rockefeller Center, the Chrysler Building and scores of other properties, abruptly pulled out of a deal to buy the former Mobil Building, a 1.6 million-square-foot tower on 42nd Street, near Grand Central Terminal, for $400 million, two executives involved in the transaction said.
Commercial properties are not the only ones facing problems. On Friday, Standard & Poor’s dropped its rating on the bonds used in Tishman’s $5.4 billion purchase of the Stuyvesant Town and Peter Cooper Village apartment complexes in 2006, the biggest real estate deal in modern history. Standard & Poor’s said it cut the rating, in part, because of an estimated 10 percent decline in the properties’ value and the rapid depletion of reserve funds.
The rating reduction shows the growing nervousness of lenders and investors about such deals, which have often involved aggressive — critics say unrealistic — projections of future income. via NYTimes.com.
It probably is a really good time to buy real estate - monthly payments are about equal to market rents ...
The part about the inventory is right on but in my area they are mostly low end and beat up ...
I worked for this man, he is a great con man and has done this in more than States then ...
You're right. If you come from Central Jersey (as the Boss and I do), you go to Florida at some ...
Maybe it was kryptonite...
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By Mike ...
I couldn't agree more.
The newspaper has always "stuck" it to the real estate agent with rates that were much higher ...
By the way, homeowners trying to get short sale approval should be aware that lenders are comparing the initial loan ...
Ouch! Thankfully I haven't come across anything like that yet. We normally don't have situations like that in ...
well, the guy was here illegally.
serves him right. 
BY USING FIRST CLAIM INSURANCE ADJUSTERS YOU WILL HAVE THE ABILITY TO LOOK AT YOUR INSURANCE SETTLEMENT AND REALIZE FIRST ...
Comment by New Homes in Charlotte on 1 October 2008:
Wow that is incredible news. I have been hearing that the NYC market was continuing to be solid. I guess we are all being hit hard by this downturn.
Comment by Seanster on 3 October 2008:
Interesting piece of information. Shows how badly we are affected by this downswing.