Tishman, BlackRock hand back Stuy Town

Tishman Speyer and BlackRock have handed back the $5.4 billion multifamily complex Stuyvesant Town/Peter Cooper Village after failing to negotiate a debt restructuring with lenders.

The joint venture admitted defeat in the early hours of Monday, saying handing back control and operation of the 80-acre Manhattan residential complex was the only “viable alternative to bankruptcy”.

Stuyvesant Town/Peter Cooper Town

Tishman, BlackRock missed a $16 million debt payment on 8 January, saying at the time they would work with the special servicer, CWCapital, to continue “good-faith negotiations toward a potential restructuring of the debt”.

That restructuring, though, has failed to materalise with the two parties saying in a statement today: “Over the last few days, however, 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.”

Handing back the property, Tishman said it would not consider managing the property “that does not

Over the last few days, however, 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. Tishman, BlackRock

involve ownership. Without a restructuring that would keep our ownership group as part of the equity, we felt it best that the new owners install a new management team. “

In December, a $3 billion senior mortgage backed by the East Village site was transferred to special servicing following a “request for relief” by Tishman and BlackRock.

That followed the conclusion of a lengthy legal battle with tenants, which ruled Tishman and BlackRock’s strategy of converting rent-stablised apartments to market rates was illegal.

Tishman and BlackRock bought the 11,227-unit residential apartment complex for $5.4 billion in 2006, with Tishman investing $112 million of equity into the deal. 

Tishman added today it had no intention of putting the deal into bankruptcy saying a “contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or [New York]  City.

“We are fully committed to an efficient transition of the property’s operation and are offering to continue managing the property during this period to make the transition smooth and seamless for the residents.”