Concerns Continue For 25,000 Residents In 11,000-Unit Manhattan Apartment Complex As Foreclosure Action On $3B Mortgage Is Filed

In New York City, The New York Times reports:

• The lenders at Stuyvesant Town and Peter Cooper Village are expected to begin an uncontested foreclosure action [] against the owner of Manhattan’s largest residential complex, according to bankers and real estate executives. CWCapital, the company that is overseeing the complex on behalf of the owners of $3 billion in mortgages, plans to file the action in State Supreme Court in Manhattan, they said. The owner, a partnership of Tishman Speyer Properties and BlackRock Realty, announced last month that it would turn over the property after defaulting on a $16 million loan payment, rather than wage a battle for control.

• The foreclosure action is unlikely to immediately affect the 25,000 residents of the two sister complexes overlooking the East River, between 14th and 23rd Streets. But 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.

• Still, tenants of the 110 buildings are concerned that services and maintenance could deteriorate over time. “It is unfortunate that we find ourselves in this position,” said Daniel R. Garodnick, a city councilman and lifelong resident. He added: “Anything that moves this process toward an orderly restructuring will be in the tenants’ interest. We most certainly don’t want anyone gumming up the works.”(1)

For more, see Worry at Stuyvesant Town as Foreclosure Draws Near.

For story updates, see:

• Reuters: Lender's agent forecloses on Stuyvesant Town: The trustees for the holders of securitized senior mortgages on Stuyvesant Town/Peter Cooper Village in Manhattan have moved to foreclose after the owner of the apartment complex failed to make the monthly installments on the $3 billion loan (action filed in federal court in Manhattan).
• New York Post: LeFrak, Ross unfazed by StuyTown suit: New York real estate mogul Richard LeFrak says he and billionaire investor Wilbur Ross are still interested in buying Stuyvesant Town-Peter Cooper Village, despite moves by lenders to foreclose on the apartment complex. [...] Ross told The Post he supports a foreclosure sale, saying it will simplify the sale process.

(1) Reportedly, the Stuyvesant Town foreclosure would come only weeks after a state judge ordered the foreclosure sale of Riverton Houses, a middle-class complex in Harlem. And analysts predict that more complexes bought with enormous loans during the real estate boom will also default. At Riverton, which like Stuyvesant Town was built by Metropolitan Life Insurance in the 1940s, the owner reportedly defaulted on a $225 million mortgage. On behalf of mortgage holders, loan servicer CW Capital will have to pay a transfer tax of an estimated $100 million on the Stuyvesant Town foreclosure when it does take possession of the property, the story states.