Stuyvesant Town’s former special debt servicer is doing battle with a company called Cobalt VR. (Photo by Sabina Mollot)
By Jackson Chen
A decade after the cityʼs most infamous apartment deal collapsed, investors are still fighting over the money lost and won in Stuyvesant Town.
The New York State Appellate Division of the Supreme Court has upheld a ruling that could have forced special servicer CW Capital to shut down sales until a fight over the $1 billion it earned while serving as caretaker to the 11,200-unit apartment community is resolved.
CW Capital — an affiliate of Fortress Investment Group — was appointed special servicer to the $3 billion Stuy Town/Peter Cooper Village mortgage after Tishman Speyer handed back the keys to the historic East Side development in 2010 following the market crash.
The complex was originally purchased in 2006 by Tishman Speyer and BlackRock for $5.4 billion. When they defaulted on the mortgage, CW Capital was put in charge of the property management and creditors for the years the property remained in default.
CWCapital attorney Greg Cross (Photo courtesy of Venable)
By Sabina Mollot
It was the biggest bust of the last real estate boom, but a lawyer battling over Stuyvesant Town money claimed everybody won.
“Listen, everybody connected with this property is making a lot of money,” said Greg Cross, an attorney for CWCapital.
Cross was in court earlier this month defending his client’s right to a half-billion-dollar payment for services rendered during the period when CWCapital ran the complex and serviced the debt on the original $3 billion mortgage rung up by Tishman Speyer and BlackRock Realty which was sold to investors in five securitized tranches.
In October, investment giants Blackstone and Ivanhoe Cambridge agreed to buy the East Side development for $5.3 billion and signed a deal with the city to preserve 5,000 affordable apartments.
Ahead of the sale closing, the latest in a long line of lawsuits surrounding the complicated financing deals negotiated for the property drew to an end with the plaintiffs withdrawing their complaints.