SL Green Realty Corp. (NYSE:SLG) and its Gramercy Capital Corp.'s (NYSE:GKK) investment in the Stuyvesant Town Peter Cooper Village is in deep trouble because of a recent court ruling that would severely compromise its ability to repay its debt. Now, the two real estate investors want to do something to salvage their investment. The New York-based REITs said Tuesday they want to be involved in the restructuring of debt for the Manhattan residential complex that was purchased at the height of the real estate boom in 2006.
Specifically, SL Green and Gramercy Capital invested $200 million in $1.4 billion of mezzanine debt and will "actively monitor the situation very closely [as] the potential exists to be a part of some form of restructuring or resolution of this investment," SL Green CEO Marc Holliday told Reuters. For the owners of Stuyvesant Town Peter Cooper Village -- Tishman Speyer Properties LP and BlackRock Inc. (NYSE:BLK) -- the offer appears to provide some relief.
But Tishman and BlackRock need other lenders to step up and be as willing to restructure the debt held in the property. The pressure to restructure the nearly $4.4 billion in total debt is mounting for Tishman and BlackRock because of a court decision that found the owners illegally converted rent-stabilized apartments to market-rate ones. The judgment could spell millions in dollars in back rent or a credit for some 4,000 apartments, and it would hamper Tishman's already limited resource of funds, which reportedly will last at most till February, 
to service the debt. - Gerald Magpily
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