By Dan Orlando
The value of Stuyvesant Town and Peter Cooper Village, the 11,000-unit East Side housing development, has gone up.
Appraisers said the complex which sold for $5.4 billion at the height of the boom in 2007, is now worth $3.5 billion.
While its $2 billion short of its last sale price, the appraisal is good news for lenders still owed from the bubble-bursting buy made by Tishman Speyer and a group of partners led by BlackRock Inc.
“The special servicer reduced or decreased their appraisal reduction and the appraisal reduction is basically the special servicer’s best attempt to predict what the potential loss on the loan is going to be,” Joe McBride, research analyst for Trepp told Real Estate Weekly.
“They’ve taken a different view on what the property is worth and, from things I’ve read elsewhere, this property is probably worth much more than this.”
The special servicer, CWCapital Asset Management LLC, took ownership of the property in 2014, which makes its role in evaluating the value of the properties interesting. So far, the company has not responded to requests for comment on how it reached the new value.
However, Nicholas Kamillatos, a member of the real estate group at Rosenberg & Estis, P.C., said, “A significant number of the apartments are rent regulated and how they leave rent regulation in the future is a very important consideration for assessing the appraisal. It’s not just market valuations that you’re buying.”
Labeling rent regulations as one of the chief concerns for potential investors, the lawyer added, “Investors will have to use their best judgment to asses all information about the property.
“The people who are looking at this information, their duty is full due diligence.”