The Government of Singapore Investment Corporation (GIC) has reportedly booked on a loss on Tishman Speyer and BlackRock's ill-fated purchase of New York’s Stuyvesant Town and Peter Cooper Village residential complexes in 2006.
According to a report by Reuters, the loss was recognised in the wake of a legal ruling by the New York Court of Appeals in October last year that found the duo improperly converted rent-stablised units at the complexes to market rates.
A spokeswoman for the sovereign wealth fund confirmed the loss to Reuters, adding that GIC had invested $100 million of equity and held $575 million in debt positions secured against the 80-acre residential complexes. That debt was issued to help Tishman Speyer and BlackRock purchase the properties for $5.4 billion before the credit crunch.
The news comes just days after the two firms confirmed in a statement the joint venture failed to make a scheduled debt service payment to senior lenders. The payment of a reported $16 million was due last Friday.
Tishman rushed to reassure the complexes’ tens of thousands of residents that tenant services and day-to-day operations would not be immediately impacted.
The joint venture has been engaged in discussions with CWCapital, the special servicer acting on behalf of the lenders, and hopes to continue good-faith negotiations toward a potential restructuring of the debt.
A $3 billion senior mortgage backed by Stuy Town, as the complex is known, had already been transferred to special servicing in December following a “request for relief” by Tishman and BlackRock. Tishman said at the time the transfer was to allow the firms to “facilitate negotiations on a restructuring of the debt load”.