December 2008 Archives

"The picture of income, which Tishman is said to be close to arriving at because it has finished reviewing almost all of the property's rolling leases, will likely allow the company to determine whether its record purchase of the 11,000-unit complex will be a financial success.

Nearly two years have passed since Tishman Speyer purchased the twin complex for $5.4 billion, the most ever paid for a single residential real estate asset and whose financial feasibility appeared to be based upon the expectation that a significant portion of the property's rent regulated tenants could be replaced with those paying market rate.

But in about two months, Garodnick said, leases for virtually all of the complex's tenants will have come up for renewal during Tishman's tenure as owner because the maximum lease period for regulated apartments is two years."

"Jerry Speyer: His Tishman Speyer Properties bought Stuyvesant Town and Peter Cooper Village for $5.4 billion and bet it could convert the traditionally middle-class enclave into a luxury apartment complex. Then the economy tanked, and the conversion seized up. Unless an equity partner can be found to prop up the debt, or Speyer himself dips into his personal fortune, the property could be foreclosed on when the reserves run out next year."

"The reason for the downgrades echoed previous concerns raised by Moody's and fellow rating agency Standard & Poor's, both of which have lowered other debt securities tied to StuyTown mortgage loans.

The main concern involves the difficulties the developer has met in getting the rents it wants from the apartment complexes. Tishman has found it difficult to push out rent-stabilized tenants, and the company's efforts have been further hampered by the slowdown in the city's real-estate market."

"Private investment firms have been amassing what may seem like unusual stakes in New York real estate: they have bought hundreds of apartment buildings with thousands of rent-regulated units across the city that produce decidedly meager returns.

As regulatory filings and promotional materials show, the companies expect to generate higher returns quickly by increasing rents after existing tenants vacate their units. Their success depends upon far higher vacancy rates than are typical in rent-regulated apartments in New York.

Some residents and tenant advocates say that they began seeing what they consider a pattern of harassment of low-income tenants this year and suspect that it is a result of the new owners' business models. Tenants have been sued repeatedly for unpaid rent that has already been received by the landlords; they have been sent false notices of rent bills, lease terminations and nonrenewals; and they have been accused of illegal sublets."

"...With a record amount of commercial real-estate debt coming due, some of the country's biggest property developers have become the latest to go hat-in-hand to the government for assistance.

They're warning policymakers that thousands of office complexes, hotels, shopping centers and other commercial buildings are headed into defaults, foreclosures and bankruptcies. The reason: according to research firm Foresight Analytics LCC, $530 billion of commercial mortgages will be coming due for refinancing in the next three years -- with about $160 billion maturing in the next year..."

"Ms. Krause, who had always worked and was confused by public-assistance options, had fallen behind. The reason is shared by millions of other aging disabled people: The careful plans of her parents had foundered in financial reality. A legacy that paid more than $60,000 a year for the home health aides that Ms. Krause requires hit bottom in the spring. She became anguished as bills mounted, along with fear of expulsion from her rent-stabilized cocoon."

"Catholic Charities, one of the seven agencies supported by The New York Times Neediest Cases Fund, used $1,317.16 from the fund to cover a crucial rent check while a financial rescue plan to pay $5,055.65 in arrears was put in place."

"We would have been within the law to push harder," said George Hatzmann, a manager director at Tishman Speyer, "but we gave her the time she needed to get the money together. We're glad she's able to remain in Stuyvesant Town."

"Tishman, which bought Peter Cooper Village and Stuyvesant Town to take these apartment complexes upscale, is reportedly packing the place with college students who will each pay a premium amount to jam into apartments together. Why is the firm doing this? It needs to support the huge leverage it put on the project. What do you think converting these apartments to dorms will do to rents longer term? Won't the huge absorption of college students into these gigantic apartment complexes hurt rents at the other East Village buildings that used to serve as accommodations for students?"

"---------- Forwarded message ----------
From: Oval Concierge <ovalconcierge@abigailmichaels.com>
Date: Fri, Dec 5, 2008 at 6:36 PM
Subject: News from Oval Concierge
To: XXXXXXXXXXXXXXXXXXX

Dear Oval Concierge Member,

It's the most exciting time of the year! Just like you, your concierges are eager for the holiday carols, the festivities, the family bonding, and the presents! We know that the month of December is special to a lot of us and whether you are a college student, a young urban professional, retired, or a big ol' family, you're all going to want to partake in the most boisterous time of the year in the most exciting city on Earth. With that in mind, your concierges have come together to generate what we feel our members might enjoy, as well as, places and events they might not have heard of. You give so much to us every day and we want to give back to you by leading you to the most fun winter you could possibly have! If you have any questions about any of the events featured in this month's newsletter, just shoot us an email or come in and we'll be more than happy to help you get started with your holiday fun. From everyone at Oval Concierge, we wish you all a great holiday and a happy new year!

Warm wishes,

THE OVAL CONCIERGE TEAM "