The Ultimate Jingle Mail: $4.4 billion...
The "biggest ever" residential real estate deal defaults:
Property value collapses from $5.4 billion to $1.8 billion,
losses at over .67 cents on the dollar...
ftalphaville.ft.com
What's in your pension plan's wallet?
A group led by Tishman Speyer Properties has decided to give up the sprawling Peter Cooper Village and Stuyvesant Town apartment complex in Manhattan to its creditors in the collapse of one of the most high-profile deals of the real-estate boom.
The decision comes after the venture between Tishman and BlackRock Inc. defaulted on the $4.4 billion debt used to help finance the deal.
The venture acquired the 56-building, 11,000-unit property for $5.4 billion in 2006—the most ever paid for a single residential property in the U.S.
The venture had been struggling for months to restructure the debt but capitulated facing a massive debt load and a weak New York City economy that has undercut rents and demand for high-priced apartments.
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.
That’s right, the keys to the biggest ever residential property deal in the US are now in the post:
The Peter Copper Villages are the red brick apartments
And the creditors?
How 'bout the California Public Employee's Pension fund,
among others...
"By some accounts, Stuyvesant Town is only valued at $1.8 billion now, less than half the purchase price. By that measure, all the equity investors—including the California Public Employees’ Retirement System, a Florida pension fund and the Church of England—and many of the debtholders, including Government of Singapore Investment Corp., or GIC, and Hartford Financial Services Group, are in danger of seeing most, if not all, of their investments wiped out."
Remember, the PBGC, like the FDIC, is basically broke.
And you wonder why the Obama administration continues to
float the idea of converting private 401K's and IRA's to
government annuities?
Will never happen, just gloom & doom you say?
Then why did the government already hold an online webinar
to sell it to government bureaucrats and politicians?
Hmmm, Who else is going to buy all those Treasuries?
...especially when the Chinese warned Obama not to pursue
passing Health Care.
Like I said, it's time to start thinking the unthinkble.
Better keep a tight grip on that denial blanky,
because reality is coming, and soon.
SOTB |
