I've covered Stuyvesant Town a number of times already
1.WSJ Article on Tishman: Stuy Town
2. Stuyvesant Town Again
3. More on Stuyvesant Town
Yesterday's WSJ had a major article on the complex, mostly rehashing earlier coverage, but the main update is that the property's reserves are now expected to be exhausted by year-end, as opposed to sometime in 2010.
To reiterate: the primary culprit is not the drop in rents due to the weak economy, it is the unrealistic rate of rollover the buyer originally projected. (The economy is the nail in the coffin, however). Making things worse, as the WSJ points out, is a still pending lawsuit on the deregualtion of units.
One additional detail that emerged (in the article) regarding the $5.4billion acquisition in late 06: net income then was $112MM; the lenders projected it to triple in the first five years of operation. Actual NOI this year wil lbe $139MM, which is 24% income growth in three years-a nice healthy rate of growth- 8% a year. Even if their original pro-forma had a 50% growth rate (10-15% a year), one could have made a plausible argument for it. But 200%???
i've never seen that kind of rollover and turnover in a rent stabilized property.
1.WSJ Article on Tishman: Stuy Town
2. Stuyvesant Town Again
3. More on Stuyvesant Town
Yesterday's WSJ had a major article on the complex, mostly rehashing earlier coverage, but the main update is that the property's reserves are now expected to be exhausted by year-end, as opposed to sometime in 2010.
To reiterate: the primary culprit is not the drop in rents due to the weak economy, it is the unrealistic rate of rollover the buyer originally projected. (The economy is the nail in the coffin, however). Making things worse, as the WSJ points out, is a still pending lawsuit on the deregualtion of units.
One additional detail that emerged (in the article) regarding the $5.4billion acquisition in late 06: net income then was $112MM; the lenders projected it to triple in the first five years of operation. Actual NOI this year wil lbe $139MM, which is 24% income growth in three years-a nice healthy rate of growth- 8% a year. Even if their original pro-forma had a 50% growth rate (10-15% a year), one could have made a plausible argument for it. But 200%???
i've never seen that kind of rollover and turnover in a rent stabilized property.
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