$3B Debt Forces Tishman and Blackrock to Return Peter Cooper/Stuyvesant Town Property to Creditors

February 1, 2010
By Barbra Murray, Contributing Editor

A little over three years after having acquired the 1,000-unit Peter Cooper Village/Stuyvesant Town (PCV/ST) multifamily complex in Manhattan from MetLife Inc. for a record-breaking residential price tag of $5.4 billion, joint venture partners Tishman Speyer L.P. and Blackrock Realty have agreed to relinquish control of the property to lender CWCapital Asset Management. With a $3 billion first mortgage on the apartment property hanging over their heads, Tishman and Blackrock will get some relief from the pressure through the deed-in-lieu of foreclosure transaction.

Consisting of 56 structures occupying 80 acres along First Avenue between 14th and 23rd streets downtown, PCV/ST was developed more than 60 years ago. The $3 billion debt on PCV/ST entails five Commercial Mortgage Backed Securities Trusts. Tishman and Blackrock missed a payment on the aforementioned loan–which was transferred to special servicing in early November 2009–on January 8, leaving the partners in default status.

Transfer of control and operations of PCV/ST to CWCapital notwithstanding, Tishman and Blackrock still financial commitments on the property. There is an additional $1.5 billion of mezzanine debt outstanding.

Tishman and Blackrock’s handing over of the apartment community to creditors has left residents wondering how the change will impact them. “This property is not a football for various real estate moguls to fight over as a prize for their portfolios,” Al Doyle, president of the Stuyvesant Town-Peter Cooper Village Tenants Association, said at a press conference held by New York Sen. Charles E. Schumer on January 31. “To us, Stuyvesant Town and Peter Cooper Village are our homes.” PCV/ST occupants have had to deal with a management merry-go-round for quite a while now, having experienced for changes in teams over the last nine years.