Stuy Town now officially worth less than its loan balance

November 05, 2010 09:00AM

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]