Default Looms on Priciest U.S. Real Estate Deal
September 11, 2009 – The 2006 sale of Manhattan’s Stuyvesant Town and Peter Cooper Village for $5.4 billion was the most expensive real estate deal in U.S. history. Since then the property has lost more than half its value, while rent payments fail to cover even half of the debt service.
The tenants are suing the property management firm Tishman Speyer Properties saying that they illegally raised rents. A lower New York State appeals court ruled in favor of the tenants. Now the opponents are sparring in the state’s top Court of Appeals.
Meanwhile, analysts predict that the owner, BlackRock Realty, will blow through the $890 million they originally set aside for maintenance and will likely default early next year.
