Florida Lost $250 Million on New York’s Stuyvesant Apartments

Sept. 1 (Bloomberg) -- Florida’s pension lost $250 million it invested in Stuyvesant Town and Peter Cooper Village, Manhattan’s largest rental-apartment complex, the fund’s trustees were told. “We are carrying that investment at zero because the market softened dramatically,” Ash Williams, executive director of the State Board of Administration [...] Tishman and Blackrock acquired the 80-acre,... [more]

Sept. 1 (Bloomberg) -- Florida’s pension lost $250 million it invested in Stuyvesant Town and Peter Cooper Village, Manhattan’s largest rental-apartment complex, the fund’s trustees were told. “We are carrying that investment at zero because the market softened dramatically,” Ash Williams, executive director of the State Board of Administration [...] Tishman and Blackrock acquired the 80-acre, 11,200-unit Stuyvesant Town and Peter Cooper complex for $5.4 billion in 2006 at what Williams called “the top of the market.” Their plan to convert 1,600 rent-stabilized units to market rates as residents vacated was stymied by rising unemployment during the worst economic recession since the Great Depression. “Rents are not going up like they normally would, landlords are making concessions like free rent and people have not moved out at the rate anticipated,” said Williams, who came to the SBA after nine years as a managing director at Fir Tree Partners, a New York hedge fund. Manhattan apartment rents fell as much as 10 percent in August from a year earlier, the Real Estate Group of New York said on Aug. 25. Vacancies are growing and tenants aren’t moving as the city’s unemployment rate climbed to a 12-year high of 9.6 percent in July. [...] “Cash flow generated from the property remains significantly below what is needed to service the current outstanding debt,” Fitch said in a report. http://www.bloomberg.com/apps/news?pid=20601087&sid=aMJ6yR9lHQQM This is the true state of Manhattan real estate today - rents, falling & far below owners' carrying costs. [less]