JPMorgan has some advice for Stuy-Town investors

June 20, 2012 02:00PM

A new study shows that the of sale of Stuyvesant Town/Peter Cooper Village to the partnership entity between tenants and Brookfield Asset Management would likely offer holders of the property’s first mortgage the best returns. The study, first reported by Crain’s, was undertaken by JPMorgan Securities. The report also found that selling the 11,000-unit rent-regulated complex, which has been in foreclosure since 2010, to the partnership was the development’s most likely outcome.

In late 2011, the partnership said it wanted to purchase Stuyvesant Town/Peter Cooper Village for conversion into affordable condominiums. The JPMorgan Securities study reports a 2011 appraisal of the complex valued the property at $3 billion, and that a partial conversion to condos would bring in $4.4 billion. According to the report, the conversion “could in principle result in a purchase price significantly in excess of the first mortgage balance.”

As previously reported, Stuyvesant Town/Peter Cooper Village’s current $3 billion delinquency accounts for 4 percent of the multi-family sector’s current 15.2 percent delinquent loan rate. [Crain’s]