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« on: 12 January 2010, 13:24:46 pm » |
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From Bloomberg:
GIC Incurs Loss After Tishman Misses Stuyvesant Town Payment
2010-01-12 04:07:38.13 GMT
By Netty Ismail
Jan. 12 (Bloomberg) -- Government of Singapore Investment
Corp., manager of more than $100 billion of the city-state’s
foreign reserves, reported losses from its investment in
Manhattan’s largest residential enclave.
Tishman Speyer Properties LP and BlackRock Inc. said on Jan.
8 they missed a bond payment tied to their $5.4 billion purchase
of the 80-acre property, which includes Stuyvesant Town and
Peter Cooper Village apartments. Missing the payment puts the
property on course to become the second-largest default in a
commercial mortgage-backed security in the U.S.
GIC owns a $575 million mezzanine loan backed by the
property, the Wall Street Journal reported in October, citing
unnamed people familiar with the matter. The sovereign wealth
fund, among the world’s top 10 global investment companies, also
holds about $100 million to $200 million in equity, according to
the newspaper report. A GIC spokeswoman declined to confirm the
numbers today.
GIC’s assets fell more than 20 percent in the year ended
March 31 following the collapse in global financial markets. The
fund increased its allocations to alternative investments,
including private equity, real estate and hedge funds, to 30
percent in the 12-month period, from 23 percent in the previous
fiscal year.
Court Ruling
Tishman Speyer and its partners moved closer to defaulting
on $3 billion in loans they used to purchase Manhattan’s largest
apartment complex after a New York court ruled in October that
the owners illegally raised rents on thousands of tenants.
“GIC recognized the losses following the ruling by the New
York Court of Appeals in October 2009 which precipitated the
default,” the spokeswoman, who declined to have her name used,
said in an e-mail.
The losses were written down, the Straits Times reported
today.
Tishman Speyer and BlackRock bought the 11,200-unit
property -- Manhattan’s biggest apartment complex -- in 2006
with plans to raise rents, evict illegal occupants and upgrade
with amenities including a gym, concierge service and new
gardens.
Those plans were challenged by a recession, slackening
demand for rentals and a legal victory for tenants who claimed
some rent increases were illegal. The World War II-era
development houses about 25,000 people.
For Related News and Information:
Most-read sovereign wealth fund stories: MNI SWF <GO>
Top wealth-fund stories: TNI SWF WWTOP <GO>
--Editors: Chitra Somayaji, Andreea Papuc
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