Tishman Speyer Properties and BlackRock Realty are taking the "for rent" sign down on apartments in its troubled New York City real estate investment, Stuyvesant Town Peter Cooper Village.
The owner of the 11,000-plus apartment development has put a moratorium on renting available apartments so it can figure out what to do with them in light of a recent court decision that ruled the owners raised rents illegally on some 4,000 apartments. The decision sets the stage for tenants to receive refunds in the millions of dollars, which would burn a huge hole in Tishman's and BlackRock's budgets. Now, these vacant apartments, whose number is uncertain, puts an additional financial burden on the cash-strapped owners.
Tishman and BlackRock reportedly have enough money till February to service debt payments on loans that total $4.4 billion. A default on the debt seems almost certain unless creditors are willing to restructure the loans. On Tuesday, SL Green Realty Corp. (NYSE:SLG) and its Gramercy Capital Corp., both of which are creditors in the deal, said they are willing to restructure $200 million of loans they made to Tishman/BlackRock, but more creditors will have to follow suit in order for the owners to avert bankruptcy. New York City Councilman Dan Garodnick and several other New York City politicians are trying to negotiate a restructuring of debt held by Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE), according to the New York Post.
Time is running out for StuyTown Peter Cooper. If a debt restructuring is not done soon, the transaction will likely go from the largest real estate deal ever at $5.4 billion at the height of the real estate market boom to one of the biggest real estate bankruptcies ever. - Gerald Magpily
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I am very pleased that NY is stopping illegal apartments. They would not have their family in an unsafe apartment.