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Stuy Town given over to creditors

Now that the largest-ever residential real estate transaction hasimploded, what happens next with an 80-acre middle-class bastion onManhattan’s East Side?<p />

Now that the largest-ever residential real estate transaction has imploded, what happens next with an 80-acre middle-class bastion on Manhattan’s East Side?

After paying $5.4 billion for Stuyvesant Town and Peter Cooper Village at the market’s height in 2006, the group led by Tishman Speyer Properties said yesterday it will turn the 110 red brick buildings now worth less than $2 billion over to creditors.

Richard LeFrak, whose family built LeFrak City, a 5,000-unit affordable housing complex in Queens, has already expressed interest in managing the properties, according to Bloomberg News.

Tishman and its partner BlackRock Realty — which defaulted on the $4.4 billion debt used to finance the deal and had spent several weeks trying to restructure it — said that transferring control of the property to the lenders was the “only viable alternative to bankruptcy.” Tishman’s decision to walk away left unanswered questions about rents and services in the 11,250 apartments.

City Councilman and Peter Cooper resident Dan Garodnick said the mega-deal carried implications for tenants citywide.

“People will be looking to us for a solution that respects the needs of the tenants and the city’s affordable housing policy goals,” he said.

 
 
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