The late links today turned out to be a blessing, as the BIG news broke late this morning that Tishman Speyer has lost to a group of tenants in a monumental court case that will likely cost the company at least $200 Million and will make default on the project an absolute certainty. There have been countless articles lately about Tishman being on "the brink" of default, well let me tell you there is no white knight in this scenario. With a property purchased at the height of the market for $5.6 Billion now being appraised by some at $2 Billion or less, the writing is on the wall.
More importantly though are the implications for landlords throughout New York who will be negatively impacted by the courts sudden re-interpretation of the J-51 program. For years property owners have been using the J-51 to improve properties, and part of the improvement was (like it or not) to renovate rent stabilized apartments, many to the point that they become market rate. This ruling opens a Pandora's box for owners throughout the city that have used the program and now face the potential that tenants will win rent decreases, re-regulation, and refunds. Hundreds, if not thousands of buildings (and owners) could be affected. While I will admit my pro-capitalist bias, there seems be be a stench of unfairness here. Haven't the rules been changed in the middle of the game? We'll soon find out.
Wow! Tishman Loses StuyTown Court Battle(NY Times)
"Seismic Implications" For Tishman Speyer (Observer)
Tishman And Black Rock Move Closer To Default (NY Times)
Billy Joel Sells Half Of Perry St. Townhouse To Ex (Observer)
Is The Worst Over For Hamptons Market? (The Real Deal)
650 Sixth Avenue Changes Name And Broker (Curbed)