Thursday, 22 October 2009

NY Court Wallops StuyTown; CMBS to Get Clipped

Commercial Real Estate Direct Staff Report

The value of Manhattan's Stuyvesant Town and Peter Cooper Village apartment complex might have been dealt a fatal blow.

New York State's Court of Appeals has ruled that the property's current owner, a venture of Tishman Speyer Properties and BlackRock Realty, as well as its previous owner, Metropolitan Life Insurance Co., should not have been able to move individual units out of the city's rent-stabilization roster, thus allowing them to charge higher, market-rate rents.

The court said it did not consider whether its ruling should be applied retroactively, so it's not clear whether the number of units that are now generating market-rate rents will change.

The result is devastating, not only for the property's owner, which bought it for $5.4 billion in 2007, but for investors who hold bonds from the five CMBS deals that own $3 billion of senior debt on the property, which has a total of 11,227 units....

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