Hopes that the debt-collector holding the keys to Stuyvesant Town would rally to reach a sale of the massive East Side property look to have been unfounded.
Despite a settlement in the so-called Roberts v. Tishman Speyer lawsuit over illegal rent charges, CWCapital is reportedly in no rush to sell the 11,000 apartment complex and could even be looking to hike rents there.
The plan was the subject of a Wall Street Journal article that tenant leader John Marsh, president of the ST-PCV Tenants Association, said he believed was accurate.
“It tells the community a lot about CW,” said Marsh. “The excuse has been that they couldn’t talk while Roberts was pending. That’s been solved and now they’re changing their story.”
Marsh said he realizes the special servicer’s first obligation is to get full recovery for the bondholders, but insisted, “We’ve indicated that we’re prepared to do that. We will do what it takes to make sure the bondholders are 100 percent whole.”
He called the current silence from CW on the subject of a tenant-led conversion “very frustrating,”
The TA, along with Council member Dan Garodnick, had refrained from cheering the landmark Roberts v. Tishman Speyer settlement due to concerns that rents could go up as a result.
A spokesperson for CWCapital did not respond to a request for comment on the WSJ story, which also included numbers relating to income from the property as well as the fees that are paid out to CWCapital.
Analyst Lee Hornsby estimated that CW earns $625,000 a month and has earned a total of $26 million since first becoming involved with the property. Its decision last summer to replace management firm Rose Associates with subsidiary
CompassRock has also helped boost its fees.
Marsh said he was concerned about the staggering amount of money that CWCapital is said to be earning.
“It seems to be they’re very conflicted. They’re making a fistful of money. Why should they run away?”
Garodnick noted, “That’s seven million a year. That’s a significant amount of fees and that’s not even what it costs to operate the place.”
Meanwhile, the tenants association has begun looking into a few recent tenant concerns about high rent hikes due to individual apartment improvements (IAI) and vacancy bonuses.
Last year, the Association, tired of waiting for CW to agree to discuss a possible deal, reached out directly to the bondholders. However, the TA shelved talked shortly after when hurricane Sandy hit, heavily impacting Peter Cooper and Stuy Town.
Since then, the TA has been occupied with an effort to get reductions for tenants who suffered storm-related service losses.
However, Marsh said the Tenants Association with partner Brookfield Asset Management is still “100 percent committed” to a conversion. He added, “We are not going anywhere. Whatever path CW takes, we are going to be vocal and make it clear that the tenants have a right to control their own destiny.”
Because the senior debt on Stuyvesant Town, which is what CW is responsible for recouping, is $3 billion, any credible bid will have to top that amount.
Michael Ashner, CEO and chair of Winthrop Realty Trust, a REIT in 2010 teamed up with hedge fund Pershing Square Capital Management in an unsuccessful effort to acquire the property said that sale-wise, “I don’t think anything’s going to happen for a while.”