Stuy Town-real estate deal defaults. Church of England, others, lose it all.

• Another alleged financial genius bites the dust. Purchased in 2006: "A default “could be the triggering event for the collapse of the commercial real estate market,”" (10/22/09 prediction)...

1/8/10: "Tishman Speyer Properties LP and BlackRock Inc. will miss a bond payment today on debt from their $5.4 billion purchase of Manhattan’s Stuyvesant Town and Peter Cooper Village apartments, the companies said in a statement....Missing the payment puts the 80-acre property, Manhattan’s largest residential enclave, on course

• to become the second- largest default in a commercial mortgage-backed security, after the $4.1 billion default of loans backing Extended Stay America Inc. hotels last year,"...

"And just as the transaction was the biggest real-estate deal in American history, the collapse is liable to be similarly epic.

• The problem is not only the deal’s size. Like so many deals of a bubble vintage, Stuy Town’s mortgage was sliced and diced and
• sold to investors around the world.

Debt holders include the government of Singapore, the mammoth California pension fund CALPERS, as well as beleaguered mortgage giants

• Fannie Mae and Freddie Mac, which collectively hold as much as $2 billion of Stuy Town’s debt. ...

The Wall Street Journal reported a list of the major investors that includes the Florida state pension system ($250 million), real-estate firm SL/Green ($200 million), and

• remarkably, the Church of England ($70 million). Much, if not all, of these investments could be vaporized.

Industry analysts estimate Stuy Town is currently worth around $2 billion—a 65 percent loss from the purchase price....

Complicating matters is that millions of debt has been snatched up on the cheap by

• hedge funds playing a vulture’s game,

but since their investments are done in secret, there are likely dozens of firms with competing interests and stakes in an outcome."...

• "“The losses the lenders are going to take on Stuy Town could force them to call some of their other loans on commercial property.” "... photo ap

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