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Wednesday, September 9, 2009

Rents Down 25% from Peak


Rob and Jerry Speyer in far happier times. Their deal for ST/PCV is now called "a poster child for all that was wrong with that era of easy credit, highly speculative deals and greed." Congratulations on your wonderful stewardship of this property, Rob and Jerry!

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Rents in ST/PCV Down 25% from Peak

So states the NY Times in today's article about the money troubles for Tishman Speyer and BlackRock via their Stuyvesant Town/Peter Cooper Village property. The full two-page online article rehashes much that we've read before, with some extra titbits and some new quotes from Rob and Jerry about their failed venture.

http://www.nytimes.com/2009/09/10/nyregion/10stuy.html?hp


Here's a bit more meat from the article:

Regardless of that outcome, Stuyvesant Town and Peter Cooper Village are in trouble. City officials have been monitoring the looming crisis and how it might affect a complex that has served as an oasis of affordability in Manhattan for middle-class New Yorkers. Some 6,875 of the 11,227 apartments at the complexes are rent regulated.

“We are absolutely keeping an eye on it,” said Rafael E. Cestero, the city’s housing commissioner. “It’s an iconic complex.”

“We’re not doing this to bail out anybody who was part of the original transaction,” he added. “Those folks are going to take their lumps. We are looking at how we can ensure that the rent-stabilized units and the families that live there and families that could live there in the future could be insulated from the unwinding of this deal.”

Even with the partnership’s financial problems pointing to a possible default, tenants would not be likely to face high rent increases or eviction, but they may face a period of deferred maintenance and disinvestment.

Rob Speyer, who is co-chief executive of Tishman Speyer Properties with his father, Jerry, acknowledged the problems went beyond the need for a cash infusion from the partners and their investors, which include Calpers, the giant California pension fund that is the nation’s largest.

“The asset is going to require a restructuring,” he said. “Once the court case is resolved, we’ll speak to our debt holders as well as our fellow equity investors.”

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.

The deal has become a “poster child” for all that was wrong with that era of easy credit, highly speculative deals and greed, said Ben Thypin, an analyst at Real Capital Analytics, a research firm.

....

Now the buyers are running out of time and money. Jerry I. and Rob Speyer and their partner, BlackRock Realty, who paid $5.4 billion for the quiet middle-class redoubt near the East River, have seen the property lose more than half of its value, and the income from rent — down 25 percent from its peak — covers less than half of their debt payments.

8 comments:

Anonymous said...

Any bailout of TS should be met with armed revolt. I seriously doubt it will happen, though.

That said, we could still end up with them as 'managing agent' after the default occurs. And it most certainly will.

TS needs to go and a management team WITHOUT an axe to grind needs to be installed. Just my opinion. Should be the opinion of the senior debt holders as well--unless they are looking have their interests further degraded.

Anonymous said...

Thanks for the TV link, STR. It's very much appreciated. I'll be on the edge of my chair, chewing my nails down to the quick tomorrow!

Anonymous said...

I pray to God that the Justices on this panel have not been bought by the Bloomberg machine. There's no limit to Bloomberg's ruthlessness, ambition and corruption. He's like a modern-day Caesar! We've already seen and experienced the avarice and ruthlessness of the Speyers and they and the Mayor/Dictator For Life are all in bed together. (Ugh! Disgusting thought!)

Stuy Town Reporter said...

You're welcome. It begins at 2PM, apparently.

Anonymous said...

Can't wait to see the smirks wiped off those two ugly, sleazy faces. Just looking at the photograph of those two makes me vomit.

Anonymous said...

If the court ruling comes out in favor of Tishman Speyer I hope that the 60 Minute News Team will be on the doorstep of every one of those Justices who ruled against it. I always of the understanding that Judges were supposed to support the rule of law to the letter of the law and not maintain the status quo for expediency or cowardice when it comes to killing a few sacred cows - especially if those sacred cows send a lot of creamy milk to those who would not want to sacrifice it.

cory said...

You may experience difficulties receiving EbS and EbS+ live and video streaming if you are using a firewall facility. The firewall has to be modified to allow the streaming signal to get through. Any recent changes to security software can also prevent the video streaming from appearing.

You should also make sure you have the minimum required version of the relevant software as well as any additional codec.

240ite said...

Someone should have pushed them off that roof where they posed for that pic.

(no, of course I don't mean that and violence is deplorable.)