Equity firms could default on tenements

October 06, 2008 09:14AM

Private equity firms who purchased tenement housing in upper Manhattan and the outer boroughs, often in highly leveraged deals and based on the expectation that affordable apartments would be converted to market-rate units, are facing problems paying mortgages on those properties. Up to 54,000 of the 90,000 apartments purchased in these deals are in complexes that are at some risk of default in the next six to 12 months, according to nonprofit advocacy group Association for Neighborhood Housing and Development.

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