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Saturday, August 22, 2009
More Bad Press For Tishman Speyer
Another media hit, this time from the NY Post:
Developer Tishman Speyer has nearly depleted a $650 million cash reserve needed to prop up iconic apartment complexes Peter Cooper Village and Stuyvesant Town, and thanks to an unresolved court case, can't replenish its coffers.
Sources tell The Post that the real-estate developer led by Chairman Jerry Speyer has had to put its fundraising plans on ice because the properties' revenue potential is tied up in the legal battle....
Under normal circumstances, savvy, well-respected developers like Tishman would simply go out and raise more money, either through loans or by selling stakes to new investors.
But an unresolved court case that could affect its revenues from the property is crimping those plans, sources said....
On Sept. 10, the New York Court of Appeals will hear Tishman's appeal of the decision. But even if the courts ultimately rule in Tishman's favor, sources said a decision could take months.
And until Tishman can answer if and when it can convert the complex's apartments to market-rate units, investors are likely to stay away from any deals the developer tries to put together.
"It's a material risk," said one real-estate lawyer. Losing the case will have a "very, very, very, very material impact," and investors just aren't willing to take the chance, he said.
Tishman officials declined to comment, but people close to the firm said the developer and its investors are banking on the cash reserves lasting through at least March or April, giving them time to rebuild the cash coffers once the case is settled....
The full article by Kaja Whitehouse is here.