The real estate collapse isn’t over yet
It’s about to move into commercial real estate (emphasis mine):
Investors who bought into the deal were confident that real-estate manager Tishman Speyer would be able to greatly boost profits by raising rents in Manhattan’s sizzling apartment market. But today, the 56-building, 11,000-apartment property is suffering from a slowing New York economy, a lawsuit that has hindered the owner’s ability to convert rent-controlled units to market rentals, and the debt load.
Realpoint estimates that the property is worth only $2.1 billion now, less than half of the purchase price. By that measure, all the equity investors and many of the lenders, including Government of Singapore Investment Corp., or GIC; Gramercy Capital Corp.; and SL Green Realty Corp., are in danger of seeing most, if not all, of their investments wiped out. Hartford Financial Services Group, which bought $100 million of the debt tied to the property, said it has “sufficiently reserved for ths asset in the first half of this year.”
Ain’t we got fun? ..bruce w..
Category: Credit Backlash, Economics, Main, Recession Watch
You can only shift the bubble so many times.