NEW YORK CITY—The sprawling 11,231-unit Peter CooperVillage/Stuyvesant Town apartment complex, a poster childin the downturn for large-scale commercial property bets thatbackfired, appears to be headed for the auction block once again.Published reports say that CWCapital AssetManagement, which took control of Stuy-Town in 2010 afterthe property's ownership defaulted on a $3-billion mortgage, ispreparing to foreclose on $1.4 billion in mezzanine debt, thustaking full ownership of the complex and putting CWCAM in aposition to sell it.'s calls to a CWCAM spokesman werenot returned by deadline.


Even before a foreclosure action--normally a 30-day process--isa done deal, though, the complex appears to be drawing interestedparties. Citing the opinions of analysts at Barclays, Real CapitalAnalytics and Trepp, the New York Times said Wednesdaymorning that the complex was likely to fetch more than $4 billionin a sale; it had traded for $5.4 billion in 2006 to a partnershipled by Tishman Speyer Properties andBlackRock Real Estate.


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


“I'll definitely take a look at it again,” RichardLeFrak, chairman of the LeFrakOrganization and among the bidders for Stuy-Town eightyears ago, told the Times. “It's still a great asset. Itmay drive the same feeding frenzy, but it still has all theblemishes it had before.”


New York City Council Member Daniel Garodnick,whose district includes Stuy-Town, doesn't want to see any suchfeeding frenzy. “We cannot allow an overheated auction with wildexpectations that puts a target on the back of rent-stabilizedtenants,” says Garodnick, also a resident of the complex. “We haveseen that movie before. Tenants, and the City of New York, cannotafford to let that happen again.”

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.