A handful of Manhattan apartment deals appear to be potential trouble spots for the U.S. commercial mortgage market, according to Barron’s.
Banks have restricted lending as the credit crunch has tightened over the past year-and-a-half, putting pressure on the U.S. residential home market, but leaving the commercial real estate market relatively unscathed, Barron’s said.
But some Manhattan deals are causing concern, the weekly said.
Barron’s said the Stuyvesant Town and Peter Cooper Village complexes, bought at the height of the market for $5.4 billion in 2006 by Tishman Speyer and BlackRock Realty Advisors was the “most prominent trouble spot.”
Rental income for the more than 11,200 apartments in the 110-building, twin-housing projects is currently falling, according Barron’s. When the deal was arranged the landlords had projected rental income would triple to $336 million by 2011.
In a statement to Barron’s Tishman Speyer said the deal is “a long-term investment.”
Barron’s also said two Harlem complexes were carrying hefty debts, with the owner of one close to defaulting on $225 million of senior debt and $25 million of junior debt. Problems at these complexes can be attributed to loose commercial-mortgage underwriting guidelines, Barron’s said.