It’s finally happened: Stuyvesant Town is in default. So we can kiss our US575 million goodbye (yes, it’s our money, and  for those who don’t like to count in USDs, it’s SGD 805,000,000 – even the geniuses at GIC have to concede that the number is equivalent to quite a few GCBs) . 

From WSJ “Tishman, BlackRock Default on Stuyvesant Town”

Tishman Speyer and BlackRock Inc. said Friday that they wouldn’t make a full scheduled debt payment to senior lenders on Stuyvesant Town and Peter Cooper Village, triggering default and leaving one of New York’s largest apartment complexes in limbo.

The joint venture “has been engaged in discussions with CWCapital, the special servicer acting on behalf of the lenders, and hopes to continue good-faith negotiations toward a potential restructuring of the debt,” the venture said in a statement.

CWCapital, which couldn’t be reached for comment, is expected to issue a notice of default over the payment, scheduled to be $16 million. The statement didn’t say how much, if any, of the payment was made.

The announcement shouldn’t affect the complex’s day-to-day operations, which have become a major concern for current tenants.

A venture led by Tishman Speyer Properties and a unit of BlackRock bought the 11,000-unit complex in 2006 in a top-of-the-market deal valued at $5.4 billion, hoping to push out longtime tenants and replace them with tenants paying higher rents.

But the highly leveraged deal has suffered amid New York’s weak economy. Also, in October, New York’s highest court ruled that owners improperly raised rents on thousands of units removed from the city’s rent-regulation program, a ruling that sent shock waves through New York’s real-estate community.

Well, it wasn’t hard to see this coming. But take heart, fellow citizens: despite our tiny size, we are at the forefront of one of the most damaging financial tsunamis about to hit the world in 2010. CRE Singapore boleh.