Huge NYC apartment complex misses loan payment

Source: Reuters

NEW YORK, Jan 8 (Reuters) - The joint venture led by Tishman Speyer and BlackRock Inc that owns New York City's vast Stuyvesant Town/Peter Cooper Village apartment complex on Friday said it missed making its full loan payment, moving the deal one step closer toward possible foreclosure.

Credit agencies had warned that the joint venture, has seen the complex's value collapse by more than half since buying it for $5.4 billion in 2006, would likely default as it burned through reserves during a court battle over whether it could deregulate rents and raise them to market prices as swiftly as planned.

. . . .

The joint venture, which bought the 1940s-era complex near the peak of the real estate market, struggled to keep the deal afloat as property values declined during its lengthy court fight with tenants over whether it could raise rents.

In October, New York's top court ruled that the joint venture had wrongly tried to raise apartment rents rates to higher market levels. .


Read more: http://www.reuters.com/article/idUSN0825553320100108

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I feel bad for the tenants. These investors overpaid for the place on the assumption that they could raise the tenants' rents to make the investment pay off.

Yet another example of how rich investors (try to) get even richer by squeezing pennies from the poor.