A spokesman for Rose Associates could not confirm whether the Riverton assignment was a permanent one or an interim one, as is the case with Stuy-Town. There, CWCapital and a joint venture led by Tishman Speyer Properties and BlackRock Realty hired Rose as transition consultant when the JV handed over the keys to the 80-acre complex after defaulting on a $3-billion senior mortgage. In that instance, Rose had managed Stuy-Town before, under the 11,200-unit complex's previous ownership by MetLife.
As with Stuy-Town, MetLife developed Riverton in the late 1940s. Rose Associates will be responsible for the day-to-day management and maintenance of Riverton.
In a statement, Jeffrey Heifetz, managing director with Rose, says his company is "currently in the process of evaluating services at the property and identifying ways to enhance resident satisfaction. We look forward to maintaining a dialogue with residents and community leaders." Rose currently manages more than 25,000 residential units citywide.
A partnership of the Rockpoint Group and Stellar Management had bought the 1,230-unit Riverton complex in 2005 for $135 million. They refinanced the property a year later with a $225-million first mortgage and a $25-million loan, intending to convert more than half the rent-controlled units to market-rate rents.
However, in a parallel with the Stuy-Town complex, the pace of conversion at Riverton was slower than expected, reportedly reaching only 10% of the rent-controlled units by the summer of 2008, and Riverton's ownership defaulted on the debt in early 2009. The complex was carrying $240.6 million in debt, and Fitch Ratings said at the time that its value had fallen to $196 million. Similarly, Fitch said that Stuy-Town's value had declined to one-third the $5.4 billion that its owners had paid in 2006.
Following the default, special servicer CWCapital filed for foreclosure and receivership in February '09, according to Fitch. In early February of this year, Justice Richard Braun of Manhattan State Supreme Court ordered the property to be sold in a foreclosure auction.
In reporting Braun's order to sell the Riverton complex, the New York Times quoted Harold Shultz, senior fellow at the Citizens Housing and Planning Council, as predicting an imminent "wave of foreclosure sales throughout New York City. This is the first. For tenants, there's good news and bad news. Excessive debt will be eliminated, but they will be at the mercy of the auction process as to who the new owner will be."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
