Lenders Initiate Stuy-Town Foreclosure

Tuesday, Feb 16, 2010  |  Updated 7:30 PM EDT
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Lenders Initiate Stuy-Town Foreclosure

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The massive Peter Cooper Village and Stuyvesant Town apartment complex is seen from Waterside Plaza.

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The financiers who provided the money for the most expensive real estate deal in U.S. history -- the purchase of Stuyvesant Town and Peter Cooper Village -- have initiated a $3 billion forfeiture proceeding against the real estate partnership that bought it.

     Bank of America, as trustee for senior lenders, brought the lawsuit in federal court in New York on Tuesday against the owners of the 110 buildings that make up Stuy-Town and Peter Cooper Village.
    
The buildings are owned by a partnership led by Tishman Speyer Properties and BlackRock Realty. The ownership team said several weeks ago that they planned to transfer control to the lenders now that the apartments they bought for $5.4 billion in 2006 are now worth $1.8 billion.

According to The New York Times,  the foreclosure action is unlikely to immediately affect the 25,000 residents of the complexes overlooking the East River, between 14th and 23rd Streets. But, the Times said it marks the beginning of what promises to be a lengthy process in which the lenders will take control of the 80-acre complex and run it for an unspecified period before selling it to a new owner.

Tenants of the 110 buildings are concerned that services and maintenance could deteriorate over time.

CWCapital Asset Management LLC, which is overseeing the complex for the lenders, didn't immediately return a call Tuesday seeking comment. A spokesman for Tishman Speyer also didn't return a call.

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