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Record NYC real estate deal now on the rocks

DAVID B. CARUSO The Associated Press
FILE - In this Oct. 17, 2006 file photo, the Peter Cooper Village and Stuyvesant Town apartment complexes in New York are shown. Real estate analysts say the investment group led by New York City real estate firm Tishman Speyer Properties is now just two to three months away from a likely default on the $3 billion mortgage it used, along with a $1.4 billion secondary loan, to buy the property. (AP Photo/Mary Altaffer, file)

FILE - In this Oct. 17, 2006 file photo, the Peter Cooper Village and Stuyvesant Town apartment complexes in New York are shown. Real estate analysts say the investment group led by New York City real estate firm Tishman Speyer Properties is now just two to three months away from a likely default on the $3 billion mortgage it used, along with a $1.4 billion secondary loan, to buy the property. (AP Photo/Mary Altaffer, file)


NEW YORK — It was the most expensive real estate deal in U.S. history. Now it's poised to become one of the biggest flops.



At the height of the real estate bubble in 2006, an investment group led by New York City real estate firm Tishman Speyer Properties and BlackRock Realty Advisors paid $5.4 billion for a pair of gigantic Manhattan apartment complexes known as Stuyvesant Town and Peter Cooper Village.

The price seemed outrageous to many, but the company believed it had a winning strategy: It would aggressively convert thousands of rent-regulated apartments occupied by middle-class families into luxury units that would fetch top dollar.

Three years later, to the glee of many New York renters, the tactic has been a bust.


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