The Peter Cooper – Stuyvesant Town Blunder Soon To Be A Bankruptcy?
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Peter Cooper – Stuyvesant Town sets record deal at 5.4 billion dollars read the headlines. One of the biggest real estate deals ever and the new owners were going to use their acute business acumen to turn the community from a rent control paradise to a high rent district.
The boys at Tishman Speyer Properties are geniuses I tell you, geniuses!
As a true New Yorker would say, Getoutahere!
The hubris and moxie that pushed through this deal and sucked in pension funds such as Calpers and the Church of England is about to go belly up unless the rabbit can be put into the hat.
The sprawling Manhattan apartment complex known as Peter Cooper Village and Stuyvesant Town — acquired for $5.4 billion in 2006 by a venture of Tishman Speyer Properties and a unit of BlackRockInc. — is running out of cash. As of the end of September, it had $33.7 million left of the $400 million in interest reserves set up to service its debt, according to the people familiar with the matter. At its current burn rate of about $16 million per month, the reserve could be depleted before the end of the year, the people said. Others have said the venture could avoid default until February.
There are only 2 groups that are happy as this incident runs to a conclusion. MetLife is got to be thrilled that they sold the units at the top of the market and got a premium for their share holders and policy holders.
Oh, and the other group? That is the long term rent controlled stabilized tenants who have fought off Tishman Speyer’s attempt to break through. That is as tough a bunch as I have ever come across and I should have known that no company could ever fight them and come away unscathed.
(The author spent a year living in a rent controlled apartment in Peter Cooper in the late 80’s so he knows the tenacity and passion the tenants have about their rent control.)(Thanks for the correction, the apartments are not rent controlled, they are rent stabilized!)
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Comment by Frances on 14 October 2009:
The apartments in Stuyvesant Town and Peter Cooper Village are NOT rent controlled. They are rent stabilized.
Comment by Lee Ann on 14 October 2009:
PCV/ST is not rent controlled and never was. There is a big difference in rent stabilization and rent control. Tishman is trying to take advantage of luxury decontrol–whose guidelines haven’t changed with inflation–and the lovely major capital improvement loophole.
Pingback by The Peter Cooper – Stuyvesant Town Blunder Soon To Be A Bankruptcy? « Business News on 14 October 2009:
[...] The hubris and moxie that pushed through this deal and sucked in pension fundsSource: The Real Estate Bloggers RSS Feed [...]
Comment by Tom Royce on 14 October 2009:
Thanks Frances and Lee Ann for the correction. The post has been updated to reflect the changes.
Comment by P(CV)unk'd on 14 October 2009:
You neglected to mention that landlords of rent-stabilized buildings ALWAYS are allowed to increase rents, regardless of whether their costs have gone up or down. And although rent-stabilized tenants have fought the unbridled greed of various landlords in ST/PCV, they have not always prevailed. Management has been so inept and illegal that market-rate tenants have joined the battle. And why not mention the importance of affordable housing in Manhattan and how Bloomberg has eviscerated the middle class? Before MetLife sold the property they had nurtured so carefully, people were willing to wait years to get in.
Comment by Watching Jerry Fail on 14 October 2009:
Irregardless of his philanthropy and civic contributions, Jerry Speyer’s legacy will be his failed, greed-fueled attempt to jack boot thousands of longstanding, middle class, NYC citizens out of their Stuyvesant Town residences. Many of his victims included elderly WWII veterans and/or their wives/widows – the very same people for whom the complex was built.