Greed and Strange Bedfellows
Posted on April 7, 2010
Filed Under Business, Commentary | Leave a Comment
What do the government of Singapore, California’s State Workers Pension Fund, and the Church of England all have in common? They are all major investment losers in a massive commercial real estate fiasco.
Five years ago Tishman Speyer and Blackrock Realty partnered to purchase the Stuyvesant Town and Peter Cooper Village housing complexes in Manhattan. The plan was to get around rent controls and force the largely middle class occupants out of their homes so they could transform the places into luxury apartments at much higher rents. Recently they had to turn this purchase back over to their creditors because they couldn’t make a 16 million loan payment on over 5 billion dollars of debt.
Enter the real estate bust, and the best laid plans of mice and men are once again upset. I find a kind of satisfaction to see that the little guys, represented by the working class people currently living in these apartments, seem to have come out on top – at least temporarily. I say temporarily, because you can believe that there is some other greedy entity waiting in the wings to step in and try to get their hands on this perceived treasure.
My closing question is this – why was the Church of England involved in this deal? There is something seriously wrong with things when a so-called Church of England can invest in a deal that would ultimately profit from the misfortune of thousands of people.
There is a perfect real estate storm looming on the horizon involving commercial real estate. We all need to take heed!
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