An Apartment Complex Teeters

just pointing out that even at $2.1 billion the value is supposed to be $191,000 per apartment. lol

i was not aware that the Church of England owned a piece of my home. maybe before they lost all of their equity they owned one of my doorknobs.

"But New York rent rules were eased over the years. When the Tishman/BlackRock venture purchased the property from MetLife in late 2006, the new owners predicted they would be able to convert thousands of protected apartments to higher market rents....These projections convinced Calpers and the pension funds of several other states to make large equity investments in the deal. Meantime"

I wonder what law firm(s) provided an opinion of counsel on this...

Is ST/PCV High Church or Low Church?

AR,

You think this development will tank?

mutombo, it certainly won't have the same ownership shortly. but it is a physical structure with tenants. won't necessarily be the best transition, but something will get done.

ah, high all the way, baby.

In this case, I think the RS tenants are the salvation. They're not going anywhere, and something will happen. My vote is for a tenant-led buyout.

nyc10023, you are probably right. interestingly, the prior tenant plan involved selling a certain percentage of the market rate units to insiders.

I don't know the underlying numbers, but with the current RS-FM mix, does it generate enough revenue to run the complex? If not, that's a huge problem.

if it didn't have this level of debt load, sure. the prior tenant plan would have failed, but would have done better than the TS plan. it would have sold units, i believe, to pay down some of the debt load.

Law firms don't give opinions on projections or financials (thank god). Any opinion would have been about whether Met Life had the right to sell the building free and clear and all that. The financial guys (on both ends) have nobody but themselves to blame.

Tishman Rent Rise in Manhattan Voided by New York’s Top Court

By Patricia Hurtado

Oct. 22 (Bloomberg) -- Tishman Speyer Properties LP, owner of Stuyvesant Town-Peter Cooper Village, Manhattan’s largest apartment complex, lost a tenants’ lawsuit in New York state’s highest court accusing the company of improperly raising rents.

The New York Court of Appeals in Albany said today the rent increase on about 4,350 apartments in the massive complex on Manhattan’s east side violated the law because it was built with city assistance and the building’s owners received tax breaks.

The ruling upheld a decision by a lower appeals court in Manhattan. That court ruled in March that Tishman and the prior owner, MetLife Inc., wrongfully deregulated the apartments by raising the rents because of a sale of the property in 2006.

Today’s decision means the companies might have to pay millions of dollars in rent rebates to thousands of tenants. State law entitles tenants to triple damages for illegal rent increases, lawyers in the case said.

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

Last Updated: October 22, 2009 09:07 EDT

These guys are absolutely screwed.

As will be a lot of rental buildings in this town.