Stuy Town default could come within weeks

TRD New York /
Nov.November 24, 2009 03:32 PM

In the wake of the potentially crippling state appeals court decision over rent destabilization at Stuyvestant Town and Peter Cooper Village last month, the complex’s owners are creeping closer and closer to default. The Wall Street Journal reported last month that Tishman Speyer Properties and BlackRock could likely stave off default until February on the property they acquired for $5.4 billion in 2006. But that was before the landmark Oct. 22 ruling, which meant the companies might be forced to pay back $200 million in rent overcharges to tenants whose apartments were illegally deregulated. Now, credit rating agency RealPoint has said the owners have only $6.75 million left in reserves for Stuy Town, which reportedly burns up around $16 million each month. “We could easily see them go delinquent in December,” said Steve Kurtitz, senior vice president at RealPoint. Another source told the New York Post that while default is inevitable, it is more likely to happen in January. [Post]

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