The Real Deal New York

Stuy Town sale will mean big payday for CWCapital

Special servicer stands to make $615 million from deal

November 03, 2015 12:52PM

Stuyvesant Town and CWCapital President David Iannarone

Stuyvesant Town and CWCapital President David Iannarone

Stuyvesant Town special servicer CWCapital Asset Management stands to make more than half a billion from the property’s sale to the Blackstone Group and Ivanhoe Cambridge for $5.3 billion.

The company, controlled by Fortress investment Group, will make as much as $615 million from the sale because Stuyvesant Town and Peter Cooper Village’s value climbed so far beyond its $3 billion mortgage, according to estimates by Barclays. Tishman Speyer and partners defaulted on the mortgage in 2010.

While special servicers like CWCapital usually collect a .25-percent fee on the total debt yield plus a fee when the property sells, the company claims that the jump in value entitles it 3 percent of the in-default debt, the Wall Street Journal reported.

“It’s the mother lode,” Edward Shugrue, chief executive of bond manager Talmage LLC, told the Journal. “Comb through structured finance – there’s nothing like this … That’s a pretty flippin’ crazy amount of money.”

CW stands to make $45 million from the standard servicing fees, in addition to roughly $555 million from the added value, according to Barclays. It can also claim a $15 million liquidation fee.

Fortress paid about $300 million for CWCapital when it bought the company in 2010. [WSJ] – Rich Bockmann