Stuyvesant Town/Peter Cooper Village bigwigs Tishman Speyer and BlackRock have decided to turn the rental complex over to creditors, capping a tumultuous four years of ownership and cementing the deal as one of the worst in real estate history. The surrender comes a few weeks after the partnership?which paid (along with a very eclectic array of investors) a record $5.4 billion for the 110-building property?defaulted on a loan payment after burning through cash reserves. It was thought that the complicated untangling of the Stuy Town mess would involve some serious debt restructuring and the continued involvement of Tishman Speyer and BlackRock in some capacity, but that's no longer the case. Tishman Speyer will no longer manage the property after the transfer of power. If the real estate bubble was the Summer of Love, and Lehman's bankruptcy was Altamont, then this is...Nixon?
The joint venture's statement is a postscript for the era:
“We have spent the last few weeks negotiating in good faith to restructure the debt and ownership of Stuyvesant Town/Peter Cooper Village. It was our hope in these discussions that our partnership would remain as part of the long-term ownership. “Over the last few days, however, it has become clear to us through this process that the only viable alternative to bankruptcy would be to transfer control and operation of the property, in an orderly manner, to the lenders and their representatives.
“We have no intention of putting ST/PCV into bankruptcy. 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 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.
“We are fully committed to an efficient transition of the property’s operation and are offering to continue managing the property during this period to make the transition smooth and seamless for the residents.”
So what's next for Stuy Town, other than confusion, chaos and the looting of the GameStop on First Avenue? Perhaps another tenants' bid to buy the property?
· Huge Housing Complex in N.Y. Returned to Creditors [NYT]
· All Stuy Town coverage [Curbed]