Fitch Ratings issued a statement Friday that said that a $3 billion mortgage for Stuyvesant Town and Peter Cooper Village had been transferred from a partnership led by Tishman Speyer and BlackRock Realty to a "special servicer," CW Capital, due to the sponsors' "request for relief."
The Tishman Speyer/BlackRock partnership is facing default on the 11,200-unit apartment complex east of First Avenue between 14th and 23rd Streets.
An article by Hui-Young Yu, Jonathan Keehner and Oshrat Carmiel at Bloomberg News today said that Fitch "said the property doesn't produce enough income to pay the debt and a reserve fund probably will be depleted by year-end," adding that "A sale is more likely than a restructuring because the complex has lost so much value, said Kevin O'Shea, managing partner and head of the real estate practice at the law firm Allen & Overy."
The article quoted a spokesman for Tishman Speyer as maintaining that "We requested that the joint venture's loan be moved to special servicer in order to facilitate negotiations on a restructuring of the debt load," adding that "The loan is not in default."
Tishman Speyer and BlackRock paid $5.4 billion in November, 2006 to acquire the property and had assumed that they would be able to convert many apartments to unregulated "market" rents but a recent court ruling in a lawsuit brought by some tenants has stymied that plan and the residential market meanwhile has collapsed significantly.
The Bloomberg article said that "Stuyvesant Town's worth has plunged to $1.8 billion, according to Fitch. This means that all the investors besides the senior bondholders are probably wiped out. BlackRock wrote its investment to zero at the end of last year, spokesman Brian Beades said. Beades referred all further questions on Stuyvesant Town to Tishman. The Florida State Board of Administration also wrote off its $250 million investment."
The transferring of the loan to "special servicing," the article continued, "means holders of the $1.4 billion of mezzanine debt, including Fortress Investment Group Inc. and SLGreen Realty Corp., may have lost their money."
CW Capital is a unit of Caisse de depot et placement du Quebec, a large Canadian pension fund.
The Tishman Speyer/BlackRock partnership is facing default on the 11,200-unit apartment complex east of First Avenue between 14th and 23rd Streets.
An article by Hui-Young Yu, Jonathan Keehner and Oshrat Carmiel at Bloomberg News today said that Fitch "said the property doesn't produce enough income to pay the debt and a reserve fund probably will be depleted by year-end," adding that "A sale is more likely than a restructuring because the complex has lost so much value, said Kevin O'Shea, managing partner and head of the real estate practice at the law firm Allen & Overy."
The article quoted a spokesman for Tishman Speyer as maintaining that "We requested that the joint venture's loan be moved to special servicer in order to facilitate negotiations on a restructuring of the debt load," adding that "The loan is not in default."
Tishman Speyer and BlackRock paid $5.4 billion in November, 2006 to acquire the property and had assumed that they would be able to convert many apartments to unregulated "market" rents but a recent court ruling in a lawsuit brought by some tenants has stymied that plan and the residential market meanwhile has collapsed significantly.
The Bloomberg article said that "Stuyvesant Town's worth has plunged to $1.8 billion, according to Fitch. This means that all the investors besides the senior bondholders are probably wiped out. BlackRock wrote its investment to zero at the end of last year, spokesman Brian Beades said. Beades referred all further questions on Stuyvesant Town to Tishman. The Florida State Board of Administration also wrote off its $250 million investment."
The transferring of the loan to "special servicing," the article continued, "means holders of the $1.4 billion of mezzanine debt, including Fortress Investment Group Inc. and SLGreen Realty Corp., may have lost their money."
CW Capital is a unit of Caisse de depot et placement du Quebec, a large Canadian pension fund.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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