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Wednesday, September 09, 2009

Market and StuyTown Update

by Calculated Risk on 9/09/2009 04:08:00 PM

Since I haven't posted this in some time ...

Stock Market Crashes Click on graph for larger image in new window.

This graph is from Doug Short of (financial planner): "Four Bad Bears".

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

And on StuyTown from the NY Times: Buyers of Huge Manhattan Complex Face Default Risk (ht Ann)

[T]he buyers [of Stuyvesant Town and Peter Cooper Village in Manhattan] are running out of time and money. Jerry and Rob Speyer and their partner, BlackRock Realty, who together paid $5.4 billion ... have nearly exhausted an additional $890 million set aside for apartment renovations, landscaping and interest payments. Rents are down 25 percent from their peak.

Real estate analysts say that the partnership’s money will run out as soon as December and that the owners are at “high risk” of default on $4.4 billion in loans.
A recent report from Realpoint, a credit rating agency, estimates that the property has a value today of only $2.13 billion.
At Stuyvesant Town, there is a $3 billion first mortgage, or commercial mortgage-backed security, and a $1.4 billion second loan, known as “mezzanine debt” held by SL Green, the government of Singapore and others.

Finally, there is $1.9 billion in equity put up by Tishman Speyer, BlackRock and their investors.
At that valuation - about two-thirds off the total $6.3 billion price - the equity is wiped out, the mezzanine debt is wiped out, and the first mortgage will take a significant haircut.