COMPANIES New York’s highest court ruled on Thursday that the owners of Manhattan’s biggest apartment complex wrongfully raised rents on thousands of tenants, in a decision that analysts say will bring the property closer to default and could further rattle the commercial mortgage-backed securities market.
The court said Tishman Speyer and BlackRock, which led a group of investors that bought the Peter Cooper Village and Stuyvesant Town properties in 2006 for $5.4bn, and MetLife, the former owner, should not have been able to raise rents for on nearly 3,000 tenants in rent-stabilised apartments while taking tax benefits for renovations. The owners could have to pay $215m in damages and rebates. According to analysts at Fitch, the ratings agency, the $3bn in loans taken by Tishman and BlackRock, which were repackaged as CMBS, is likely to default without an equity infusion or recapitalisation.
