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Wednesday, October 14, 2009

Update on Stuy Town

by Calculated Risk on 10/14/2009 12:23:00 PM

The WSJ has an article today on Stuy Town: An Apartment Complex Teeters

One of the biggest, most high-profile deals of the commercial real-estate boom is in danger of imminent default ... signaling the beginning of what is expected to be a wave of commercial-property failures.
According to Lingling Wei and Craig Karmin at the WSJ the interest reserve could be depleted by the end of the year, and that could put the property in default.

According to Realpoint, the property is worth less than 40% of the $5.4 billion purchase price.

Here is a September article from the NY Times: Buyers of Huge Manhattan Complex Face Default Risk
Tishman Speyer and BlackRock spent $6.3 billion — the $5.4 billion purchase price and the creation of four reserve funds totaling $890 million — to buy Stuyvesant Town and Peter Cooper Village from the original owner, Metropolitan Life.
At Stuyvesant Town, there is a $3 billion first mortgage, or commercial mortgage-backed security, and a $1.4 billion second loan held by SL Green and others.

Finally, there is $1.9 billion in equity put up by Tishman Speyer, BlackRock and their investors.
The equity and the second loan will probably be wiped out.