As the Stuyvesant Town and Peter Cooper Village complex heads into foreclosure auction later this month, both the NY Times and Wall Street Journal look at how the development, in spite of its problems under Tishman Speyer, remains attractive. People are expecting a war over the property, and one investor group thinks it'll make a lot of money by turning the rental apartments into co-ops. William Ackman, whose Pershing Square Capital Management and Winthrop Realty Trust is one of the parties in the investor group, tells the WSJ, "The value of the property as a co-op is much higher than the value of the property as a rental." If only Tishman knew that four years ago!
He also told the Times that his group wants to work with tenants and elected officials, "The unique circumstances of Stuyvesant Town today create the opportunity for us to make an attractive investment, for tenants to buy their apartments at below-market prices and for the first-mortgage lender to get back its money. We're excited about that." The property was sold at $5.4 billion in 2006, and Tishman thought it would make bank by raising rents to mark rates. But the rent increase was deemed illegal, since Tishman was taking advantage of tax breaks related to rent-stabilized apartments; it's now worth $2 billion.
Besides Ackman's group, investment groups, and other big real estate developers, the Stuy Town tenants are looking to join one of the bids. City Councilman and Stuy Town resident Daniel Garodnick told the WSJ tenants are interested a plan that allows them to buy their units at discounted prices or to remain as rent-stabilized tenants, "Addressing the tenants' needs is the only route to success" for a bidder.