IN ONE OF biggest single residential property failures in US history, Tishman Speyer Properties and its partner Black Rock have walked away from its 56-building complex at Peter Cooper Village and Stuyvesant Town in Manhattan handing it over to creditors.
Tishman Speyer and Black Rock Realty, which paid $US5.4 billion for the project in 2006, had attempt to restructure financing on the massive residential project, but waved the white flag over the weekend inviting creditors to take charge of the apartment complexes that are now reported to be worth just $US2 billion.
The project partners failed to restructure the growing debt used to finance the historically ambitious U.S residential project, which was purchased at the top-of-the-market in 2006.
The Government of Singapore Investment Corporation (GIC) is believed to have invested close to $US800 million in the Manhattan project whilst U.S based investors SL Green, and Fortress Investment Group, the Church of England as well as pension and super funds have also lost hundreds of millions.
It is expected GIC will lost its entire $US800 million investment.
The California public employees’ pension fund bought a $US500 million stake in the property whilst the Florida pension fund staked $US250 million in the Manhattan apartment complexes.
The Church of England has suffered a $US65 million loss as a result of the collapse. The Church of England says it has written off the entire investment stating it would look carefully at the lessons learned from the failed investment.
A feeding frenzy of various creditors and investors has already begun fighting for control of the complex.
Leading contender is the New York based CWCapital, an asset manager that represents investors who hold the $US3 billion first mortgage on the property.
Peter Cooper Village and Stuyvesant Town has 11,000 units and amenities such as parks, playgrounds and a putting green in the middle of Manhattan’s ritziest real-estate market.
Apart from a tainted reputation, the financial damage to Tishman Speyer, which manages a $US33.5 billion and a portfolio of 72 million square feet of property in the United States, Europe, Asia and Latin America, is expected to be nominal.
CWCapital is negotiating with Tishman and Black Rock on behalf of creditors is expected to make an announcement on the project in the coming days.
Australian Property Journal
