RCA in the commercial property press:

Soured Manhattan deal portends property storm

The Globe and Mail reports: It's a real estate deal so big – and so bad – that one observer mused it was the city's worst property transaction since a group of Native Americans were swindled out of the island of Manhattan by Dutch settlers.

Struck at the height of the real-estate boom, the $5.4-billion purchase of two storied New York City apartment complexes finally crashed to earth in late January when the owner walked away, turning over the keys to a group of creditors.

The deal's failure is a harbinger of trouble ahead in the US commercial real estate market, where prices have tumbled but many say the woes have just begun.

Sifting through the debris of the deal for the two New York apartment complexes – Stuyvesant Town and Peter Cooper Village – shows how complicated the process can be. Whoever controls the property will face scores of investors maneuvering to recover billions in losses, not to mention thousands of worried tenants.

“We are a little bit in uncharted territory here,” says Sam Chandan, chief economist at Real Capital Analytics, a property research firm in New York. “It's the scale, the scope, the number of participants to the transaction.”

Articles related to this topic:

 Tishman Speyer's $5.4 Billion Boomerang
 Manhattan’s Apartment Market Stabilizes
 Stuyvesant Town Gamble Costs Church of England £40m
 Macklowe Looms Large In Sales
 NYC Service Cuts and the Bigger Picture

Posted by: Matthew Stone

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