Stuy Town turned over to creditors

Tishman Speyer and BlackRock Realty, the owners of Stuyvesant Town and Peter Cooper Village, are turning the 110-building complex over to creditors in a deed-in-lieu of foreclosure, the companies announced this morning. The partners went into default on the property after missing a $16.1 million debt payment earlier this month. The complex was purchased for $5.4 billion in 2006 in the most expensive single residential sale ever in the country and it has $4.4 billion in debt. The property is now worth an estimated $1.8 billion. Creditors had been threatening to move forward with foreclosure proceedings in recent weeks and to remove Tishman Speyer as property manager. “We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the city,” Tishman and BlackRock said in a joint statement to the media. “Tishman Speyer would not consider a long-term management contract to
continue operating the property that does not involve ownership. Without a restructuring that would keep our ownership group as part of the equity, we felt it best that the new owners install a new management team.” Tishman Speyer itself invested only $112 million in the property; damage to the company’s reputation is likely to be more palpable in the aftermath of the soured deal. [WSJ]