Huge apartment project in Manhattan goes to creditors

Hey, let's pay billions for real estate at the top of the market then have an idiotic business plan for making money

Tishman / BlackRock just pulled the plug on Stuyvesant Town, a huge residential project in Manhattan. They bought at the top of the market in 2005, paying $5.4 billion for it. It now may be worth as little as $1.8 billion, and they just turned it over to their creditors.

The California Public Employees’ Retirement System (CalPERS) lost $500 million of their retiree’s pension money as their equity investment in Stuyvesant Town is now worthless. Honestly folks, I think a chimpanzee throwing darts at stock listings could choose better than the arrogant, comatose money managers at CalPERS. They have a positive genius for buying at the top and then losing large amounts of money while somnolently intoning they are long-term investors and expect the market to come back.

As for Tishman / Blackrock, they bought the 11,227 apartment unit with aims of tarting it up then raising the rents – even though most of the units are strictly rent controlled. (What were they thinking?) A judge shot them down on the rent increases, then the real estate market tanked. Game over.

Gary Weisss sums it up: Death of the world’s dumbest real estate deal

But I bet lots of folks made huge amounts in commissions and fees on the deal. So maybe some of them weren’t so dumb after all.


  1. Tishman tried was to force our the rent-regulated tenants. They hired investigators, for example and claimed tenants were not using the apartments as primary residences. In addition, they tried to raise the regulated rents by claiming they’d made Major Capital Improvements. It was a very risky and aggressive strategy but Tishman did not put in much of its own money.

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