Via The New York Observer

Looking to make a possible bid for the property themselves, the Stuyvesant Town/Peter Cooper Village tenants' association has found itself a corporate law firm. The association announced Monday that Paul, Weiss, Rifkind, Wharton & Garrison would provide it representation as the imbroglio at the apartment complex moves forward. 

"We believe that the tenants are the key to a successful solution to the ownership of this iconic housing complex--and we are looking forward to helping them achieve their goals," Paul Weiss partner Meredith Kane said in a statement.

The announcement said Paul Weiss "will represent the TA without seeking compensation from tenants."

There's a link here to City Councilman Dan Garodnick, who lives in Peter Cooper Village and who played a leading role when the tenants tried to buy the complex back in 2006 (they submitted a bid of more than $4 billion). Before he was on the council, he was a litigator at Paul Weiss.

Continue reading "Exploring a Bid, Stuy Town Tenants Lawyer Up with Paul Weiss" @ The New York Observer

Via the ST / PCV Tenants Association

The Stuyvesant Town/Peter Cooper Village Tenants Association announced today that it has retained the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP to provide counsel that will help the TA meet its goals of preserving the property's long-term affordability and ensuring adequate maintenance.

Paul, Weiss is widely recognized as one of the top law firms in the country, with robust real estate and restructuring practices-expertise the TA is seeking for the upcoming complex negotiations over the future ownership and management of STPCV.

"This is a firm that is second to none, and we are proud to have them on our team," said Al Doyle, president of the Tenants Association.  "If anyone thought the tenants were not a force to be reckoned with at the bargaining table, they will now realize that we are serious, we are organized, and we have the resources we need to determine our own destiny in this process and ensure we are treated fairly."

The TA selected Paul Weiss because of its experience in some of the most significant and complicated real estate transactions and restructurings of recent times.  It has represented major creditor groups and other parties in the chapter 11 reorganizations cases of Lehman Brothers, General Motors Corporation, GMAC, Charter Communications, CIT, the New York Racing Association and Pacific Gas & Electric, California's largest investor-owned public utility and the largest public utility in U.S. history to file for chapter 11 relief.  Paul Weiss's real estate practice includes the representation of private and governmental clients in the proposed sale and development of MTA's West Side Railyards and Atlantic Yards, the lease and redevelopment of the World Trade Center site, the financing for the Time Warner Center in Columbus Circle and the Venetian Resort Hotel in Las Vegas, and the acquisition, sale, development and financing of thousands of units of housing and millions of square feet of office and commercial space in New York City and around the globe. The firm also represented the Miami Heat basketball team in the development of the American Airlines Arena in downtown Miami and the Government of Hong Kong in the development of Hong Kong Disneyland.

Currently there are a dozen or so FDNY / NYPD vehicles in front of 15 Stuyvesant Oval. The building and part of the First Avenue Loop are closed off as of 8PM with flood lights pointed directly at the building. Details to come.

Update: Gothamist originally posted the incident in their News section as a "barricaded emotionally distressed person" at 6:10PM but it has since been changed to "Jumper" and given a new address of 2nd Avenue and 18th Street. More Stuy Town damage control? The photo doesn't lie, it's clearly Stuy Town.

Via Town & Village

Via Multifamily Executive

A $5.4 billion New York commercial real estate deal involving two huge apartment complexes -- Stuyvesant Town and Peter Cooper Village -- fell apart last week.

Among those who helped put together the deal was Rob Friedberg, a real estate investor who lives in Woodcliff Lake.

Friedberg, now managing partner of the Englewood real estate investment firm Capstone Realty, helped secure financing used to buy the massive 11,227-unit Stuyvesant Town and Peter Cooper Village apartment complexes on Manhattan's East Side when he was a managing director at BlackRock Realty.

BlackRock, which Friedberg said he left in late 2008, partnered with Tishman Speyer to buy the 110-building complex in 2006. But last week, the buyers announced plans to hand over "Stuy Town" to its creditors.

Some of the investors who provided debt or equity financing for the deal include, according to news reports: the Republic of Singapore, the Church of England, and CalPERS, the California public employees' pension fund.

The ratings agency Realpoint pegged the apartment complexes' current value at $1.99 billion.

Friedberg spoke with The Record about the ill-fated deal recently.

Continue reading "Anatomy of an Implosion" @ Multifamilyexecutive.com.

Representatives of the current owners of Stuyvesant Town and Peter Cooper Village and counsel for the plaintiffs, Wolf Haldenstein Adler Freeman & Herz LLP and Bernstein Liebhard LLP, agreed today to extend the interim agreement they reached last December to adjust rents in each apartment affected by the recent Court of Appeals decision in the Roberts litigation.  Under the extended agreement, affected tenants will continue to pay the lower of either their lease rent or an estimated rent-stabilized rent through the month of June 2010.  Each affected tenant will also continue to be afforded certain rights as if pursuant to the Rent Stabilization Law, including renewal and succession rights.

In addition, the amounts that were deposited into the escrow account in connection with tenants' payments of their November and December 2009 rents will be fully reimbursed to the tenants, either by way of a corresponding reduction of current tenants' March 2010 rent bills or a refund check issued to former tenants who moved after paying their November and/or December rents.  Finally, the owners have stipulated to permit the lawsuit to proceed as a class action.  The parties expect that over the next few months the rents for the approximately 4,400 affected apartments will be calculated as if pursuant to the Rent Stabilization Law by an independent consultant, who has been selected but not yet formally retained.

Related

Stuyvesant Town owners agree to class action suit [Reuters]
Stuy Town Residents Can Keep Lower Rents Until At Least June [WNYC]

Via Next American City

Image via The Mannahatta Project

The biggest, most offensive real estate deal in history has gone belly-up! Tishman Speyer properties--along with BlackRock--has forfeited Stuyvesant Town/Peter Cooper Village to investors. They bought the historic 80-acre postwar housing development for $5.4 billion back in 2006, exactly 380 years after Peter Minuit bought the island of Manhattan from the Lenape for about $24 in wampum (actually, it was about $1,000). They are completely unrelated, aside from the fact that they may go down in history together as the worst real estate deals to ever happen, ever.

Tishman Speyer's failure stems not only from making a massive purchase immediately before the market tanked, though that didn't help; their other mistake was buying a housing project and expecting to be able to treat it exactly like any other luxury housing development. Not only is a housing project not as appealing as a condominium (we will get to that later)--but people already live there. Lots of them.

Tishman Speyer saw this as a mere bump in the road; their plan for raising enough revenue to pay back their massive loans--the purchase was 80% leveraged--was to turn rent-controlled apartments into market-rate apartments. Curious what a market-rate one bedroom costs in a former MetLife housing project just above the Lower East Side of Manhattan? $2850 a month. With more than 11,000 apartments in the two complexes, ranging from one to five bedrooms, Tishman was poised to make a lot of money. But, on top of a recession-generated lag in the rental market, the rent-controlled tenants filed suit against Tishman, arguing their actions were illegal, and actually won. Tishman Speyer's business model was ruined, and they are now forced to default on $4.4 billion in loans.

For anyone familiar with San Francisco current events, this is a cluster-site, New York-scale version of what happened with the Lembi group. This confluence really makes one wonder how many real estate investors got the capital for their highly-leveraged purchasing sprees by telling their investors they would boot rent-controlled tenants.

Continue reading Stuy-Town: Worst Real Estate Deal Since 1626! @ Next American City

Via The New York Observer

To flip through the pages of the 2006 offering book for potential buyers of the 11,200-apartment Stuyvesant Town and Peter Cooper Village-a deal that has devolved into the largest individual property default in modern history-is to immerse oneself in an historical delusion, one that, from today's privileged vantage point, appears as likely as Iraqi WMDs.

The book wove the strands of possible Stuy Town revenue into a real estate dreamscape, one in which the largely rent-regulated complex could become a wealthier community, complete with an elite private school, gourmet grocery shops, private spas, gated communities, Santa Cecilia granite countertops in every apartment.

"With the surge in market rental increases showing no signs of abating, there is immense upside potential, especially for stabilized units rolling to market rates," reads the 73-page offering book, prepared by Darcy Stacom, one of the city's top investment sales brokers.

If the failed $6.3 billion Stuyvesant Town deal-sealed in late 2006 by seller MetLife and buyers led by Tishman Speyer-is emblematic of nearly everything that went wrong with the real estate world during this most recent boom, the marketing of the historically middle-income property is emblematic of the unexamined contribution of top brokers to the era's fantastical mind-set.

As conversations with numerous executives involved with the bidding process illustrate, the role of Ms Stacom and other advisers was essentially to pour lubricant into an ever-accelerating dealmaking machine, one that would eventually implode.

Ms. Stacom, 50, is a real estate titan in her own right, as admired for her business acumen and salesmanship as she is feared for her mercurial temper.

New York born and Greenwich raised, Ms. Stacom, who declined comment for this story, was nurtured in real estate. Both of her parents, Matthew and Claire Stacom, were Cushman & Wakefield brokers. Her father most famously consulted in the development and leasing of the Sears Tower (now the Willis Tower). When she was 14, she worked in the Cushman & Wakefield mailroom.

She began her brokerage career at Cushman & Wakefield, defecting in 2002 for archrival CB Richard Ellis. Her sister, Tara, remains at Cushman. Her husband is a broker at Jones Lang LaSalle. It wasn't easy being a woman broker in a real estate world where men, even now, behave like extras in Mad Men. In 1996, when she was pregnant with one of her daughters, Ms. Stacom pitched a deal to a potential client, only to be asked what would happen were she to have complications during childbirth. She didn't get the gig. In interviews, she prides herself on her eccentricities: She prefers colorful skirts to business suits, funky costume jewelry to the real stuff.

Continue reading The Selling of Stuy Town @ The New York Observer

Via Wall Street Journal

It might not be a political office, but there's still campaigning under way to run New York's sprawling Stuyvesant Town and Peter Cooper Village apartment complex.

Tuesday, billionaire investor Wilbur Ross said on CNBC that the LeFrak Organization Inc., a Big Apple residential powerhouse, "is the ideal solution" for the 11,000-unit development. As we've detailed, the project was recently thrown into chaos after a group led by owner Tishman Speyer Properties dumped it on its creditors.

Mr. Ross also promised LeFrak would maintain the property as affordable housing for the city's middle class, addressing big concern for current tenants. "They're not looking at it as a 'flip' -to try to suddenly convert it to luxury apartments," he said. "They've been owning and operating rent-controlled and rent-stabilized (apartments) for generations."

Ross's W.L. Ross & Co., private-equity firm Centerbridge Partners and LeFrak are pursuing a joint bid to buy the complex. Still, dealing with bondholders who hold $1.4 billion in junior, or "mezzanine," debt beneath the mortgage on the property will be "immensely complicated," the investor added.

Continue reading Wilbur Ross: LeFrak Is Ideal for Stuy Town, Trump's 'Not Interested' @ Wall Street Journal

Related

Wilbur Ross: We Are Ideal for Stuyvesant Town [CNBC]l