In 2006, real estate behemoth Tishman Speyer and its partner, BlackRock, bought Peter Cooper Village and Stuyvesant Town, a middle-class housing complex on Manhattan's East Side in New York, for $5.4 billion. Four years later, Tishman Speyer defaulted, and, just like that, investors from the Church of England to the California Teachers' pension fund lost everything. Meanwhile, MetLife made $3 billion, and eight residents of the complex had the gumption to sue--and won their case in court. Bagli, the New York Times reporter who broke this story, gives us a full chronicle. Not just local news; this, perhaps the biggest failure in real estate history, says a lot about the housing crisis that's landed us where we are now.[Page 53]. (c) Copyright 2012. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
New York Times journalist Bagli's first book serves as a cautionary tale for the nation's real-estate recovery. As part of the 2006 sale from MetLife to Tishman Speyer Properties/BlackRock Realty of Manhattan's iconic Stuyvesant Town and Peter Cooper Village--the apartment houses built in the1940s to shelter returning World War II veterans and their families--MetLife agreed to maintain below-market rents for 25 years, enabling working-class families to live in Manhattan. In great detail, Bagli documents how MetLife's goodwill ended and the company began renovating empty units and renting them at market value, and how the more than $5 billion sale funded almost entirely by "other people's money" collapsed in ruin. After expecting fast profits that never materialized, the buyers ended up defaulting on their loan. Only $225 million, or 3.6 percent, of the loan was fronted by Tishman Speyer and BlackRock. Most came from various external entities--such as retirement systems and the Church of England--that suffered the losses. While the material is dense at times, the author makes clear how Tishman and BlackRock emerged scot-free while the financial backers and tenants did not. VERDICT For those interested in the finer details of this well-known historical real estate transaction, or of New York City real estate history in general. [See PrePub Alert, 10/8/12.]--Leigh Mihlrad, National Insts. of Health, MD[Page 85]. (c) Copyright 2013. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
In recounting the collapse of "the biggest real estate deal in history," New York Times reporter Bagli provides an intriguing display of boom psychology perpetuating itself. His absorbing account of the transformation of Manhattan's mammoth Stuyvestant Town-Peter Cooper Village apartment complex from a haven for moderate-income families to a developer's dream captures the spirit of the frenzied real-estate market of the first few years of the 21st century. Bagli expands the controversial clash between developers seeking to deregulate rents and tenants concerned with marginalization of the middle class into a larger metaphor for wealth contending with basic needs. His focus, though market-based, is not exclusively economic; he also reviews, in the history of this apartment complex, the change of consciousness relating to civil rights and provides glimpses of a time when corporate paternalism seemed welcome and tenants reflexively accepted regimented conditions and rules. Current New Yorkers may derive wry amusement from the anger of tenants in 1952, when the complex owner sought to raise the monthly rent on four-room apartments to an astonishing . The reader interested in New York real estate history, its moneyed elites, or even the self-contradictory aspects of social investment should find ample material for reflection and enjoyment in Bagli's account. Agent: David Vigliano, Vigliano Associates. (Apr.)[Page ]. Copyright 2013 PWxyz LLC