Wednesday, November 30, 2011

Stuy Town tenants back in play

Crain's reported yesterday that Brookfield (who happened to raise their hand last week when we asked who had a few billion dollars of cash looking for a home in distressed real estate deals) is teaming up with tenants to make another push to buy the property. You'll recall that the tenants actually were prepared to pay north of $4 billion when MetLife original sold the property in '07, and the NY Times, at least, believes that bid will be at least the $3 billion owed on the senior mortgage.

Even if you correctly assume that the NY Times doesn't know what it is talking about and is pulling numbers out of the air that make good headlines, this is still good for the AJ and better bonds. In fact, the faster the resolution comes the better - we should see interest shortfalls get cured and the deals can stop accruing fees, not too mention the legal settlement, potential effects of an assumption or early payoff, etc. The big negative is what the loss to investors is going to be, but it's not going to be as bad as what is priced in to the bonds right now (guessing the C30 AJs are in the 50s, maybe L60s at best).

1 comment:

crabsofsteel said...

don't diss my NY Times! they're spot on because a new appraisal just came in exactly the size of the senior note. Stuy Town may well be the 800 lb gorilla at over 19% of this pool, but there are a few other goofy loans in there too (including the garage with addons B of A's analyst though was an office)