New York, UNITED STATES: Traffic and pedestrians pass the Stuyvesant Town apartments.
A tentative legal agreement has been reached to reduce rents for thousands of tenants at Peter Cooper Village and Stuyvesant Town.
The agreement, which will cover a six month period, was reached Monday in state Supreme Court.
Rents will be reduced based on each tenant's lease starting in January and each affected tenant will be granted benefits—lease renewals under stabilized rates and succession rights—under the Rent Stabilization Law.
The agreement is in place until a formal agreement can be reached following a study on exactly what rents are across the complex. The ruling affects 4,400 apartments.
“In addition, Tishman Speyer and BlackRock have reached agreement with counsel for the plaintiffs on a more inclusive, six-month agreement covering a wider range of unresolved issues beyond those addressed in the interim agreement," a joint statement by the attorneys said.
The East River enclave has more than 11,000 apartments. It was built to house World War II veterans returning to the city.
The purchase of Stuy-Town and Peter Cooper Village in 2006 amounted to the biggest real estate deal in U.S. history. The partnership purchased the 110-building Stuy Town/Peter Cooper Village rental complex for a $5.4 billion. It is now valued at just $2.13 billion by a credit rating agency.
Jerry I. and Rob Speyer and their partner, BlackRock Realty have nearly exhausted an additional $890 million set aside for apartment renovations, landscaping and interest payments. Rents are down 25 percent from their peak, officials said.
Real estate analysts have found that Tishman's money will run out as soon as December and that the owners are at “high risk” of defaulting on $4.4 billion in loans.