Stuyvesant Town in danger of default

Investors in Stuyvesant Town and Peter Cooper Village stand to lose everything they put in if the project goes into default, as some insiders have predicted. The East Side apartment complex was acquired for $5.4 billion in 2006 by Tishman Speyer Properties and a unit of BlackRock, when many thought rent increases would easily boost profit margins. Now, in a cooled rental market, Stuyvesant Town is worth only an estimated $2.1 billion, and tenants have been largely successful in their fight to block escalating rents. Sources told the Wall Street Journal that the 56-building, 11,000-apartment development could sidestep default until February, but that it had only $33.7 million left of its $400 million in interest reserves at the end of September, and that it uses about $16 million per month. [WSJ]