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NEW YORK CITY-One of the biggest recent deals in commercial realestate just went kaput. Tishman Speyer Properties is giving thePeter Cooper Village and Stuyvesant Town apartment complex back toits creditors. Tishman bought the sprawling multifamily complex for$5.4 billion in 2006, according to media reports.

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The move follows Tishman and partner BlackRock's default on $4.4billion in debt they took out to finance the acquisition. Anarticle in the Wall, Street Journal estimates that the56-building complex is only now worth $1.8 billion.

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In a statement issued Monday, the joint venture of Tishman andBlackRock says it would not consider a long-term managementcontract to continue operating the property that does not involveownership. "Without a restructuring that would keep our ownershipgroup as part of the equity, we felt it best that the new ownersinstall a new management team," according to the statement. "We arefully committed to an efficient transition of the property'soperation and are offering to continue managing the property duringthis period to make the transition smooth and seamless for theresidents."

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Click here for the full Journalarticle.

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