NEW YORK CITY—The sprawling 11,231-unit Peter Cooper Village/Stuyvesant Town apartment complex, a poster child in the downturn for large-scale commercial property bets that backfired, appears to be headed for the auction block once again. Published reports say that CWCapital Asset Management, which took control of Stuy-Town in 2010 after the property's ownership defaulted on a $3-billion mortgage, is preparing to foreclose on $1.4 billion in mezzanine debt, thus taking full ownership of the complex and putting CWCAM in a position to sell it. GlobeSt.com's calls to a CWCAM spokesman were not returned by deadline.

Even before a foreclosure action--normally a 30-day process--is a done deal, though, the complex appears to be drawing interested parties. Citing the opinions of analysts at Barclays, Real Capital Analytics and Trepp, the New York Times said Wednesday morning that the complex was likely to fetch more than $4 billion in a sale; it had traded for $5.4 billion in 2006 to a partnership led by Tishman Speyer Properties and BlackRock Real Estate.

Bloomberg reported late Tuesday afternoon that Fortress Investment Group, which owns CWCAM, is seeking financing for a $4.7-billion bid on the 80-acre, 110-building rental complex. A Fortress spokesman tells GlobeSt.com the firm declines to comment on the report.

“I'll definitely take a look at it again,” Richard LeFrak, chairman of the LeFrak Organization and among the bidders for Stuy-Town eight years ago, told the Times. “It's still a great asset. It may drive the same feeding frenzy, but it still has all the blemishes it had before.”

New York City Council Member Daniel Garodnick, whose district includes Stuy-Town, doesn't want to see any such feeding frenzy. “We cannot allow an overheated auction with wild expectations that puts a target on the back of rent-stabilized tenants,” says Garodnick, also a resident of the complex. “We have seen that movie before. Tenants, and the City of New York, cannot afford to let that happen again.”