Friday, November 30, 2012

Stuy Town one step closer to resolution

The tenants came to a settlement. This was one of the key blocks to a final resolution on the property that had us thinking it would be late next year "at best", but given this settlement, I think it is safe to say that a final resolution by year-end 2013 could even be labeled "likely" at this point. This is definitely a positive for bondholders.

The only negative I can see, is that the rent-controlled units must stay rent-controlled until 2020 to comply with the original J-51 tax abatement and rents are now set through 2020. This obviously crimps potential revenues, but it makes sense that they would have this as a condition. After all, the only way Tishman got the numbers to work in the first place was to mark-to-fantasy, ignore rent control, evade taxes, and team up with the dumbest lender available (yes, I'm talking about you CMBS Market). Also, it is offset by the fact that it allows them to raise revenues

The settlement works out in favor of Wolf Haldenstein Adler Freeman & Herz, the firm representing the tenants, second place prize goes to Venable LLP, counsel for CW Capital. Everyone else lost. The tenants lost and the lender lost. In lawsuits, everyone is a loser except the attorneys.

Interesting side note, I was going through prior posts on this property and all the action seems to happen in October and November. There are some rare August and March posts, but things seem to happen in October and November. Based on this non-scientific analysis, I'm going to go ahead and call it - PCV/ST will get worked out by November 30th, in fact, on November 30th, 2013.


crabsofsteel said...

It's the general case that things in CRE tend to happen around year-end. Interesting call on a Nov. 2013 liquidation but I don't think so. CWC is not going to stick around for a co-op plan to be worked out ... they would sell it to anyone with 3.5bb to pay off the loan plus its accruals. You need FH to finance you for that kind of money. I doubt they would want to replace the 5+% coupon they're getting on their A1As with a lower-rate mortgage.

crabsofsteel said...

on further reflection, losing money never seems to bother the folks at Freddie, so maybe they would after all, as it might look good politically.

crabsofsteel said...

Stuy Town appraised up to 3.2B, and this is apparently before the rent-hike litigation was settled. these bonds are going to the moon!