http://dealbook.blogs.nytimes.com/2009/09/09/buyers-in-new-york-apartment-deal-face-default-risk/
The New York Times, 9 Sep 2009
Big N.Y. Apartment Deal Under Strain
Three years ago, the sale of the 110 red brick apartment buildings
at Stuyvesant Town and Peter Cooper Village in Manhattan amounted
to the biggest American real estate deal in history.
Now the buyers are running out of time and money, The New York
Times’s Charles V. Bagli reports. Jerry and Rob Speyer and their
partner, BlackRock Realty, which together paid $5.4 billion for the
quiet middle-class redoubt near the East River, have nearly
exhausted an additional $890 million set aside for apartment
renovations, landscaping and interest payments. Rents are down 25
percent from their peak.
Real estate analysts say that the partnership’s money will run out
as soon as December and that the owners are at “high risk” of
default on $4.4 billion in loans. Two real estate executives who
have been briefed on the finances insist that the owners can hold
out, but only until February.
At Stuyvesant Town, there
is a $3 billion first mortgage, or commercial mortgage-backed
security, and a $1.4 billion second loan, known as “mezzanine debt”
held by SL Green, the government of Singapore and
others.
Full Story