Tishman Speyer and BlackRock, who acquired the Stuyvesant Town and Peter Cooper residential enclaves for $5.4 billion from the Metropolitan Life Insurance Company in 2006, issued a statement Friday stating that their joint venture would not make the scheduled full debt service payment to its senior lenders due that day.
The statement said that the venture had been "engaged in discussions with CWCapital, the special servicer adding on behalf of the lenders."
By missing the $16 million payment due, the venture is in technical default on their mortgages. The venture has been trying to renegotiate about $3 billion of debt on the properties that cover 80 acres east of First Avenue between 14th and 23rd Streets and house more than 11,000 residents.
"Aside from the $3 billion in mortgages," Charles V. Bagli wrote in an January 8, 2010 article in The New York Times, "there is another $1.4 billion in secondary, or mezzanine, loans and almost $1 billion in equity invested by the partners, a Florida pension fund, the Church of England and others."
"Also in the mix are the government-controlled mortgage giants Fannie Mae and Freddie Mac, which together hold a bond that is secured by as much as $2 billion of debt on the property," the article continued, adding that "these two companies will get paid first with whatever revenue comes from the property, but they are not involved in the negotiations."
The value of the venture's acquisition has fallen dramatically because of the financial crisis and because last month the New York State Court of Appeals ruled ordered market rate rents rolled back at the development for at least six months beginning January 1.
Metropolitan Life erected the enclave of 15-story, red-brick buildings without air-conditioners for World War II veterans and it received tax breaks and incentives in return for keeping rents low.
The statement said that the venture had been "engaged in discussions with CWCapital, the special servicer adding on behalf of the lenders."
By missing the $16 million payment due, the venture is in technical default on their mortgages. The venture has been trying to renegotiate about $3 billion of debt on the properties that cover 80 acres east of First Avenue between 14th and 23rd Streets and house more than 11,000 residents.
"Aside from the $3 billion in mortgages," Charles V. Bagli wrote in an January 8, 2010 article in The New York Times, "there is another $1.4 billion in secondary, or mezzanine, loans and almost $1 billion in equity invested by the partners, a Florida pension fund, the Church of England and others."
"Also in the mix are the government-controlled mortgage giants Fannie Mae and Freddie Mac, which together hold a bond that is secured by as much as $2 billion of debt on the property," the article continued, adding that "these two companies will get paid first with whatever revenue comes from the property, but they are not involved in the negotiations."
The value of the venture's acquisition has fallen dramatically because of the financial crisis and because last month the New York State Court of Appeals ruled ordered market rate rents rolled back at the development for at least six months beginning January 1.
Metropolitan Life erected the enclave of 15-story, red-brick buildings without air-conditioners for World War II veterans and it received tax breaks and incentives in return for keeping rents low.
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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