Retail chain J.C. Penney has agreed to allow Vornado Realty Trust to increase its stake in the company, relaxing a restriction put in place last year to limit the number of shares the real estate investment trust could buy, Dow Jones reported.

The change of heart, disclosed in a filing by J.C. Penney yesterday, is just the most recent piece of evidence in the deepening relationship between Penney and Vornado. It allows Vornado to increase its stake to 15.4 percent from 9.9 percent, including through a synthetic long position” using the derivatives market. Vornado holds a seat on J.C. Penney’s board, Dow Jones said.

Vornado and Bill Ackman’s Pershing Square Capital both have stakes in the department store chain. [more]

Billionaire hedge funder William Ackman, who runs Pershing Square Capital Management, has added a $22 million Bridgehampton estate to his personal portfolio. According to the Post, the eight-bedroom beachfront home sits on six acres with a tennis court and views of Sagg Pond. The Corcoran Group’s Susan Breitenbach had been marketing the property for just under $26 million. But while Ackman may have scored a deal on the East End, his bet on bookseller Borders fell flat yesterday, when the company filed for bankruptcy. Pershing’s stake — it bought 5.1 million shares of the company in 2006 at between $18 and $20 per share — will likely be wiped out in the reorganization, Bloomberg News reported. [Post] and [Bloomberg]

It’s no wonder hedge fund bigwig Bill Ackman put up such a fight for control of Stuyvesant Town and Peter Cooper Village: he thought he could squeeze a “$2 billion potential profit opportunity” out of a co-op conversion at the massive complex, he told attendees of the Bloomberg Link Hedge Funds 2010 Conference yesterday. Ackman’s Pershing Square Capital Management and joint venture partner Winthrop Realty put $45 million into their purchase of $300 million worth of defaulted junior debt on the property earlier this year and had attempted to foreclose. [more]

Stuyvesant Town and Peter Cooper Village

The first appraisal of Stuyvesant Town and Peter Cooper Village since the complex went into default in January is in, and investors won’t be happy with the result: $2.8 billion. Tishman Speyer and BlockRock bought the 11-acre property for $5.6 billion in 2006, using a $3 billion first mortgage and $1.6 billion in mezzanine debt. According to the Wall Street Journal, special servicer CW Capital, which took control of the complex last month after reaching a buyout deal for some $300 million in mezzanine debt from a group of junior lenders led by hedge funder Bill Ackman, is likely to cut down on interest payments to subordinate CMBS debt holders now that the property is worth less than the amount owed on the loan. Prior to the new valuation, CW had been directing advance interest payments to all of Stuyvesant Town’s many investors with the assumption that they would eventually be recovered. [WSJ]

Bill Ackman and Stuyvesant Town

The planned foreclosure auction for the Stuyvestant Town and Peter Cooper Village complex has been postponed for a third time, according to Reuters. The delay, intended to help extend negotiations between the lenders and the borrowers, has pushed the auction date to Oct. 29. Special servicer CWCapital Asset Management is expected to take control of the property when the auction, which was previously slated for Oct. 4 and then Oct. 22, does occur. A group of junior lenders at the property, led by Bill Ackman’s Pershing Square Capital Management, has been angling for control of the housing complex throughout the foreclosure process. CWCapital is said to still be in talks with Ackman and other junior lenders. [Reuters]

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The Stuyvesant Town and Peter Cooper Village foreclosure auction, — already rescheduled, and then rescheduled again, for tomorrow — could be postponed for a third time, according to the Post. A source in on the buyout negotiations between special servicer CWCapital, which represents the senior mortgage holders on the 80-acre complex, and Bill Ackman’s Pershing Square Capital Management, which is leading the junior lenders, told the paper that the talks are going so slowly that CW is unlikely to meet its own deadline. Last week, when the auction was delayed for the second time, an attorney for CW told The Real Deal that the company just “wanted a few more days” but was still “committed to the detailed planning required to assure the most favorable resolution and smooth transition of this highly complex property.” It’s unclear how long the possible third delay might last. [Post]

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Bill Ackman of Pershing Square Capital Management

Pershing Square Capital Management and Winthrop Realty Services, the Stuyvesant Town and Peter Cooper Village junior debt holders whose attempt to gain control of the massive residential complex through foreclosure was stymied yesterday by a New York State Supreme Court judge, aren’t walking away without a fight. The joint venture officially announced plans last night to appeal the decision, which allowed the complex’s senior lenders to proceed with their planned foreclosure auction early next month. In a statement, the venture said it “strongly disagrees with the trial court’s ruling and will appeal the decision to the New York appellate court and will seek to stay the mortgage lender’s planned property foreclosure. If [Pershing Square and Winthrop are] unsuccessful on appeal, or if the mortgage lender is permitted to foreclosure prior to a successful appeal, the value of [the partners'] investment in the mezzanine loans may be lost.” Pershing Square has invested roughly $36 million in the loans, while Winthrop has put in around $10.5 million, the companies said. TRD

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A New York state Supreme Court judge postponed ruling today on whether a joint venture can foreclose on Stuyvesant Town and Peter Cooper Village. Judge Richard Lowe indicated he would likely rule later this month in the case over the 11,000-unit East Side complex, Crain’s reported. Over the summer, a joint venture between hedge fund manager Bill Ackman’s Pershing Square Capital Management and Winthrop Realty Services acquired a $300 million mezzanine loan for just $45 million, with plans to foreclose on the property in an auction Aug. 25. However, Bank of America and U.S. Bancorp, acting as trustees for the complex’s senior lenders, sued to block the foreclosure, alleging that the venture was breaching terms of the inter-creditor agreement, The senior lenders, who hold the $3 billion mortgage on the complex, also want to foreclose on the property. Earlier this year, a Tishman Speyer-led partnership defaulted on the mortgage. Since then, special servicer CW Capital, representing the interests of the senior lenders, has been working to ensure the property is maintained and preparing for an orderly foreclosure. [Crain's]

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From left: Wilbur Ross, Stuy Town and Peter Cooper Village, Bill Ackman

Wilbur Ross, the billionaire investor who has long been interested in a takeover of the foreclosed Stuyvesant Town and Peter Cooper Village, said he has no plans to back out even after hedge funder Bill Ackman’s recent move to wrest control of the 11,227-unit complex. “My interest has not changed, nor has the interest of my partners,” he said in an e-mail to the Post. His partners are the LeFrak Orgniazation and Centerbridge Partners, and the trio had planned since January, when developer Tishman Speyer defaulted on its $3 billion mortgage on the property, to wait until the time was right to swoop in. On Monday, though, Ackman and Winthrop Realty Trust announced that they had purchased a piece of the $1.4 billion second mortgage that would allow them to foreclosure on Stuy Town’s current operator and become the de-facto owners. Ackman said he wants to convert the complex to co-ops through a bankruptcy plan, but Ross expressed doubt over whether such a plan would benefit tenants and lenders. He said that Ackman would need to raise $3 billion from tenant purchasers in order to satisfy lenders during a co-op conversion, but “it is not at all clear that tenants would find a total price in excess of $3 billion attractive. [Post]

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Bill Ackman, CEO of Pershing Square Capital Management, and 115 Central Park West (building photo source: PropertyShark)

After announcing that his 19th-floor spread at the Majestic at 115 Central Park West had gone into contract, Pershing Square Capital Management CEO Bill Ackman must now sell his one remaining unit in the building, a 322-square-foot, one-bedroom, one-bathroom so-called “guest suite” on the 18th floor. Pershing purchased the modestly sized unit for $450,000 at auction in 2007, only to put the spot through a $250,000 renovation immediately afterward. Approximately two years and $700,000 later (not including the furniture, which includes a Sub-Zero fridge and flatscreen TV), Ackman has the unit back on the market with a $950,000 asking price. In a letter to other building residents, obtained by Curbed, the famed hedge funder said that he plans to wait for offers until Dec. 8, after which point he said he’ll auction off the unit himself and “will provide some excellent wines for participants.”