Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-The $3-billion loan on Peter Cooper Village/Stuyvesant Town has been transferred into special servicing, Fitch Ratings said Friday evening. A spokesman for Tishman Speyer Properties, which owns the 11,227-unit apartment complex in a joint venture with Blackrock Realty, tells GlobeSt.com, “We requested that the joint venture’s loan be moved to special servicer in order to facilitate negotiations on a restructuring of the debt load.” According to a release from Fitch, the special servicer is CWCapital.

Although the Stuy-Town loan is not in default, Fitch says cash flow generated by the 56-building property is “insufficient to service the debt.” Debt service reserves are expected to be depleted by the end of December, according to the ratings agency.

In separate ratings actions taken in August and at the end of October, Fitch downgraded several classes of CMBS containing portions of the loan. The agency’s Oct. 30 action occurred after the ruling by the New York State Court of Appeals that rent-stabilized apartments at Stuy-Town were illegally decontrolled.

The court’s ruling “is likely to stop the conversion of rent-stabilized units to market rate units and has made the owners liable for repayments of rent overcharges for unit conversions now deemed illegal,” Fitch said in October. Accordingly, Fitch lowered its estimate of the property’s value to $1.8 billion, one-third of the $5.4 billion the JV paid in 2006.

In a release on Friday, Fitch said it believes there will be “many factors involved” in the workout and ultimate recovery of the loan. These include a possible modification, potential legislative changes to rent stabilization laws, commitment of the loan sponsors, the remaining seven-year term of the loan and the “low” loan per unit of $267,213. Fitch said in October it expects losses of $600 million on the loan, or of 40% of its current balance.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


GlobeSt. Multifamily Fall 2022Event

Join the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2022 ALM Global, LLC. All Rights Reserved.