Tishman Speyer Gives Up Stuyvestant Town & Peter Cooper Village

by Jordan Yerman | January 25, 2010 at 07:47 am

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Tishman Speyer Properties and its affiliates are giving up Stuyestant Town and Peter Cooper Village, the huge complex of renovated apartment blocks just above New York City's East Village. Commonly referred to as Stuy Town, Stuyvesant Town and Peter Cooper Village began as low-cost housing for soldiers returning home from World War II.

More recently, the complex was renovated and pitched as a less-costly alternative to downtown living: Stuy Town and Peter Cooper Village (pitched as more upscale) aren't so much cheap as huge: the units are massive, but the neighborhood feels remote and looks like a housing project, which made it a tough sell to New Yorkers and nervous out-of-towners alike.

The property's owners signaled they would be unable to reach a deal with lenders and instead decided to allow creditors to proceed with what amounts to an orderly deed-in-lieu of foreclosure, which means a borrower voluntarily gives the property back to lenders to avoid a foreclosure proceeding.

Currently, Stuyvesant Town and Peter Cooper Village are valued well below their selling price of $5.8 billion, and investors stand to lose a lot of money.

The collapse of the Stuy Town deal is blamed on the tanked economy and its effect on rents, as fewer people in New York are moving.

Back in my dark days of real estate, Stuy Town was the bane of a broker's existence: if you didn't take a client there, another broker would, but nobody ever liked Stuy Town, no matter how nice the units were. Fifth-floor railroad walkups were easier sells if they were in more desirable neighborhoods.