When we last checked in on the state of the sprawling Manhattan apartment complex known as Peter Cooper Village and Stuyvesant Town, it was at high risk of default on some $4.4 billion in loans. That was the beginning of September, and the prognosis is still negative. At the end of the month, it had $33.7 million left of the $400 million in interest reserves set up to service its debt, sources tell the Wall Street Journal. This means that at its current burn rate of about $16 million per month, the reserve could be depleted before the end of the year.
One credit-rating agency estimates that the property is worth only $2.1 billion now, less than half of the purchase price. When the Tishman-Speyer purchased the property from MetLife in late 2006, they anticipated turning thousands of rent-regulated units to luxury rentals. It's tempting to ha-ha, but investors who bought into the deal included the pension funds of several other states. Now everybody's going to lose their shirts, and they still haven't caught that college kid who shit in the stairwell.