On January 25, 2010, Tishman Speyer Properties LP and BlackRock Inc. announced they were giving up their ownership interests in the Stuyvesant Town-Peter Cooper Village project in New York City. Their ownership group purchased the property in 2006 for $5.4 billion plus a $900 million reserve fund (thus, a total of $6.3 billion). The project is now worth an estimated $1.8 billion. Tishman Speyer, BlackRock and their investors, including Calpers (the California public employee’s pension fund), the Government of Singapore, the Church of England, a Florida pension fund and many other groups, will likely lose their entire equity investments totaling approximately $1.9 billion. Most of the lender’s $4.4 billion of debt financing on the project will likely also be lost.
The quote below is from a December 21, 2009 Bloomberg article about Stuyvesant Town and the anticipated default on the debt by the ownership group and the potential loss of their investment:
Both Speyers [co-CEOs Jerry and Rob Speyer of Tishman-Speyer] said they don’t think the purchase will hinder their standing or ability to buy and sell buildings.
“It’s just unfortunate that we hit this boomerang on this deal,” co-CEO Jerry Speyer said in the interview. “But is this deal going to change the reputation of Tishman Speyer, or what people think of either Rob or myself? I don’t think so, honestly. I certainly would hope not.”
If they are right, either investors and
lenders have short memories or losing billions of dollars is too low a
threshold to damage reputations. Sadly, probably both... Steven Karbank
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