"...at least one one complex held by a private equity firm is teetering on the edge: Riverton Houses, 1,232 apartments in seven buildings in Harlem. Stellar Management, the owner, notified lenders this year that it was in imminent danger of default. A $1.1 million payment on a $225 million interest-only loan was due Oct. 1. A spokeswoman for Stellar said the company was trying to negotiate more favorable terms.What's more the Times continues,
"The loans for the Savoy Park (ed.: AKA Delano Village until the hip name change after purchase) in Harlem and a collection of eight buildings on Broadway in Washington Heights have also been placed on 'watch lists' by lenders or analysts who fear a default based on recent financial filings."Reviewing a number of buildings bought by firms who were hoping to convert regulated apartments into market rate homes, which so far have come up very short of their projections, aggressive tactics were used to displace tenants.
"Last year, tenants groups sued the Pinnacle Group, which has bought thousands of apartments with private equity in Harlem, Washington Heights and the Bronx, accusing the company of harassing residents. The company has acknowledged sending out 5,000 dispossess notices — typically the start of the eviction process — to tenants at about a quarter of its 21,000 units from 2004 to 2006. But a lawyer for Pinnacle disputed claims that the company engaged in deliberate harassment."Curbed recently reported on this recent trend of private equity buying up rent regulated buildings, bluntly stating that these deals eventually become "an exposé on how tenants are being harassed until they leave their apartments."
Fear of Defaults After a Flurry of Apartment House Sales (NYTimes)
Investment Collapse Betting Pool: Savoy Park Next? (Curbed)
More city apartments facing foreclosure (Crains)
(Vantage Properties photo from Flickr user lornagrl)
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