Yesterday the owners of Stuyvesant Town/Peter Cooper Village turned their backs on their $5.4 billion purchase, and left investors to clean up the mess. It turns out, of everyone involved Tishman Speyer and BlackRock—who are each losing the $112 million they put in originally—may come out on top. Meanwhile potential buyers, including the complex's ever-zealous tenants, are circling the property while contemplating how to minimize its massive debt.
The NY Times reported that though the default is bad for Tishman Speyer, it's not fatal. “This is a big black eye for them,” said John McIlwain, a senior fellow for housing at the Urban Land Institute. “But it’s not the end of Tishman. They own a lot of property. It’s a dent, but not the end.” Those who really stand to lose are the investors: Fortress Investment Groups, the Church of England and the nation of Singapore (which could be in the hole for $775 million) just to name a few.
The Wall Street Journal reported on the suitors already lining up at Stuy Town's doors. Initially CW Capital, the group that represents investors who paid for the complex's $3 million first mortgage may take control and then try to trash the existing mortgage and find a buyer. Management of the 11,000 units may be handed back to firms like Related, LeFrak and Rose Associates. As usual tenants in the rent-stabilized apartments want a piece of the action too. In 2006 they bid against Tishman and they may do it again: "We're putting together our advisory team and will be ready as the opportunity arises," said City Councilman Daniel Garodnick, who lives in Peter Cooper Village.
