New partners hope to take over Stuy Town
Winthrop Realty Trust has brought in hedge fund Pershing Square Capital Management to form a joint venture with the intention of taking over Stuyvesant Town and Peter Cooper Village, Winthrop announced today. The new entity has purchased all $300 million worth of the senior mezzanine debt on the Manhattan apartment complex, Crain’s reported. Winthrop — which already owned a portion of that senior mezzanine debt — and Pershing recently spent $45 million to buy the remainder. Winthrop has a 22.5 percent stake in the new joint venture, while Pershing owns 77.5 percent.
The $300 million senior mezzanine debt, along with the $3 billion first mortgage on Stuy Town secured by the property, is in default. Winthrop and Pershing initiated a foreclosure on the equity interests in the property and scheduled a foreclosure auction for Aug. 25. If the group wins, as it expects to, the partnership would take control of Stuy Town and assume the $3 billion debt on the property. Earlier this year, Tishman Speyer Properties and BlackRock, which together bought the 11,000-unit residential complex for $5.4 billion in 2006 near the peak of the market, defaulted on their loans. Since then, the first mortgage on the property has been handed over to special servicer CW Capital. [Crain’s]