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The First of the Worst

The Stuyvesant Town/Peter Cooper Village deal was the biggest property sale ever—and one of the biggest potential failures as well. But if the billions in troubled deals in the pipeline is any indication, it may also be the tip of the iceberg.

By Sule Aygoren Carranza | Updated on March 01, 2010

For the full story, see the March issue of Distressed Assets Investor.

NEW YORK CITY-By now the tale of the failed Stuyvesant Town/Peter Cooper Village deal is well known. Bought for a record $5.4 billion in 2006 by a JV of Tishman Speyer and BlackRock Realty, the 110-building, 11,200-plus-unit residential property is one of Manhattan’s premier residential complexes.

Yet the economy and legal challenges threw a kink into the buyers’ plan to bring the complex’s units from stabilized to market rates. As a result, the property’s cash flow remained too low to cover debt-service obligations. By year-end 2009, the Tishman-BlackRock JV had not only gone through its $400-million debt-service reserve but also a nearly $200-million general reserve.

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