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The 2006 purchase of Manhattan’s Stuyvesant Town and Peter Cooper Village by Tishman Speyer Properties and the real estate arm of BlackRock for a record-setting
$5.4 billion was one of the
highest-profile commercial real estate deals ever to take place.

The 2006 purchase of Manhattan’s Stuyvesant Town and Peter Cooper Village by Tishman Speyer Properties and the real estate arm of BlackRock for a record-setting
$5.4 billion was one of the
highest-profile commercial real estate deals ever to take place.

As 2009 comes to a close, there are initial signs that financial stability may be returning, but the system remains fragile. We are still bracing ourselves for what may come next in a financial crisis that has proven difficult to contain, with sector after sector being impacted in waves. There is reason to be concerned about mounting pressure in the commercial real estate (CRE) sector. Billions of dollars in CRE loans are coming due over the next few years. The amount of maturing CRE loans in 2009 is estimated to be between $300 and $500 billion, with another $2.6 trillion in maturing debt through 2012.

As 2009 comes to a close, there are initial signs that financial stability may be returning, but the system remains fragile. We are still bracing ourselves for what may come next in a financial crisis that has proven difficult to contain, with sector after sector being impacted in waves. There is reason to be concerned about mounting pressure in the commercial real estate (CRE) sector. Billions of dollars in CRE loans are coming due over the next few years. The amount of maturing CRE loans in 2009 is estimated to be between $300 and $500 billion, with another $2.6 trillion in maturing debt through 2012.



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By Lon S. Cohen

 

At the time, The New York Times reported that “for all of the deal’s accolades, it also illuminated the financial leaps of faith that real estate buyers are increasingly taking.” In the intervening years the deal has become a grim lesson in how not to leverage high-valued property at the zenith of a real-estate bell curve. By September 2009, the estimated value of the 80 acre community in New York City had declined to $1.9 billion, and rental income had dropped by 25 percent.

 

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