This 11,222-unit New York City apartment complex is a one-stop housing bust. Built in 1945, it was owned and operated by the insurance giant MetLife, which decided a couple of years ago to lighten its real estate holdings. Nice move. MetLife sold the project to Tishman Speyer Properties and BlackRock Realty for $5.4 billion. The new owners intended to spiff up the place designed originally as rent-stabilized housing for returning veterans and their families and then raise rents and sell apartments.
The courts stopped the new owners from raising rents; the market stopped them from selling apartments. The place is now worth about $1.8 billion. The mortgage is $3 billion; mezzanine debt is $1.4 billion. Left holding the bag: Fannie Mae and Freddie Mac, of course, but also Fortress Investment Group and SL Green Realty Corp.