November 7, 2009
Not really news as the previous income and debt-coverage numbers revealed this asset is in a world of hurt, not to mention the hit it will take as a result of all the legal wrangling going on about rent controls. This is one big capital stack. Fitch has already reduced CMBS ratings on a number of issues relating to the StuyTown/Peter Cooper Village deal.
Fitch Ratings does not expect to take any negative rating actions following the transfer of the Peter Cooper Village/Stuyvesant Town (PCV/ST) loan to special servicing today. The $3 billion A-Note was transferred to CWCapital, as special servicer, due to the sponsors’ request for relief. Details of the request for relief by Tishman Speyer Properties, LP and Blackrock Realty are not immediately available.
Fitch expected the transfer of the loan to special servicing as cash flow generated by the property remains insufficient to service the debt. Debt service reserves are expected to be depleted by the end of December. Fitch downgraded U.S. commercial mortgage backed security (CMBS) transactions containing portions of the PCV/ST loan on Aug. 28, 2009 and Oct. 30, 2009 based on the expected default of the loan and Fitch’s estimate of value.
Fitch believes there will be many factors involved in the workout and ultimate recovery of the loan, including a possible modification, potential legislative changes to rent stabilization laws, commitment of the loan sponsors, the remaining seven-year term of the loan, and the low loan per unit ($267,213).
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