Official reports have confirmed that a group headed by Tishman Speyer Properties has decided to give up the plush Peter Cooper Village and Stuyvesant Town apartment complex, which was coming up in Manhattan, to its creditors, a move which is being viewed as a collapse of one the most luxurious and high-profile deal of the real-estate boom.
The decision has been a direct result of the venture between Tishman and BlackRock Inc. defaulting on the heavy debt of $4.4 Billion, which had been picked up to help finance the deal. The venture proceeded to acquire the 56-building, 11,000-unit property in 2006, at a price of $5.4 Billion. This was the most ever payment made for a single residential property in America.
For about two months now, the venture had been struggling to restructure the debt, but failed. Owners of the property have now suggested that they would not be able to reach a deal with the lenders, and have therefore decided to let the creditors to go ahead with the takeover of the property.
"It has become clear to us through this process that the only viable alternative to bankruptcy would be to transfer control and operation of the property, in an orderly manner, to the lenders and their representatives. We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the city", the venture said.
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