Biggest Residential Complex in Manhattan goes into Foreclosure

An uncontested foreclosure move was planned against the owner of the biggest residential complex in Manhattan lenders at Stuyvesant Town and Peter Cooper Village. The complex was being managed by CWCapital representing the owners.

The total mortgages on the building amount to $3 billion. A case will be filed in the Supreme Court at Manhattan. The owners Tishman Sepyer Properties and BlackRock Realty informed that after having defaulted they would hand over the unit and not contest for control.

The action would impact on residents numbering 25,000. There are two adjacent complexes overlooking East River located between 23rd and 14th Streets. There is the possibility that a long process would start with lenders trying to possess this complex standing on 80 acres. Most probably they would try to run it for some time prior to selling it off. The tenants in 110 buildings are worried that over a period of time the services and maintenance of the same would deteriorate.

Daniel Garodnick, a councilman and long time resident said, “It is unfortunate that we find ourselves in this position. Anything that moves this process toward an orderly restructuring will be in the tenants’ interest. We most certainly don’t want anyone gumming up the works.”

CWCapital declined to return calls asking for comments. It will have remit a transfer tax amounting to about $100 million when it takes over control of the unit. Often a foreclosure process takes a year to run its course. If the owners do not contest then it could move more swiftly. But experts cautioned that other lenders of Stuyvesant Town with secondary liens might raise objections as the foreclosure move could leave them out cold without anything.

Recently CWCapital informed that Rose Associates has been engaged as advisor. For three years Rose has been managing 11,227 apartments within the complexes prior to it being sold in 2006. Garodnick said that both Rose as well as CWCapital plans to work with the tenants.

Prior to this, couple of weeks ago a state judge ruled the foreclosure selling of a middle-class housing complex in Harlem – Riverton Houses. Experts forecast that more such complexes that had been purchased with hefty loans during the housing boom would also face foreclosure risk. Riverton was built by Metropolitan Life Insurance during the 40’s. The owner has now defaulted on a mortgage of $225 million.

During the boom the average condo price in Manhattan had spiked to more than $1 million. The rents too had climbed up even before the inflation. Private firms took advantage of this seemingly insatiable thirst for houses.

Original Post: Biggest Residential Complex in Manhattan goes into Foreclosure