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Stuy Town, Which Is On Verge Of Default, Costs Florida's Pension Fund Entire $250 Million Investment

Tyler Durden's picture





 

Stuy Town, which as Zero Hedge wrote about several days ago is in dire straits and a few months away from default, has claimed its first casualty in the face of the Florida pension fund, aka State Board Administration which has disclosed a full loss on its $250 million investment. Next question: is Blackrock still carrying Stuy Town at 100 cents on the dollar for its own LP appeasement purposes (PEs heart FASB looseness)? This piece of information will likely get as much coverage on GE's propaganda central subsidiary as Chrysler missing August sales estimates by almost 20%.

From Bloomberg:

Florida’s pension lost $250 million
it invested in Stuyvesant Town and Peter Cooper Village,
Manhattan’s largest rental-apartment complex, the fund’s
trustees were told.

“We are carrying that investment at zero because the
market softened dramatically,” Ash Williams, executive director
of the State Board of Administration, which oversees $121.9
billion of pension and other assets, told a meeting in
Tallahassee today.

Rents are not going up like they normally would,
landlords are making concessions like free rent and people have
not moved out at the rate anticipated,
” said Williams, who came
to the SBA after nine years as a managing director at Fir Tree
Partners, a New York hedge fund.

Manhattan apartment rents fell as much as 10 percent in
August from a year earlier, the Real Estate Group of New York
said on Aug. 25. Vacancies are growing and tenants aren’t moving
as the city’s unemployment rate climbed to a 12-year high of 9.6
percent in July.

Hm, this oddly does not jive with what one has been hearing on CNBC about the next debt funded American Golden Age; so the hype about recent 6.5% cap rate transactions was just an outlier? That is indeed unfortunate for CRE investors who eagerly anticipate rents and occupancy rates to promptly get back to their 2007 peaks.

 

 


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Tue, 09/01/2009 - 13:14 | Link to Comment Fear of the Dark
Fear of the Dark's picture

Looks like his investments are faring about as well as his old firm.

Tue, 09/01/2009 - 13:17 | Link to Comment TPC
TPC's picture

Tyler,

 

You hear these rumors about a large bank failure?  Put action in Wells is HEAVY:  http://pragcap.com/unfounded-rumor-of-the-day-large-bank-failure

Tue, 09/01/2009 - 13:32 | Link to Comment Project Mayhem
Project Mayhem's picture

interesting.  though I doubt they'd let one of their insider fat cats fail.  my money would be on a eurobank... plurhaps something related to club med...

Tue, 09/01/2009 - 13:43 | Link to Comment TPC
TPC's picture

oh, ZERO % chance they'd let Wells fail.  Less than zero % chance. 

Tue, 09/01/2009 - 13:49 | Link to Comment Hephasteus
Hephasteus's picture

Joined at the hip so that when they go down they all go down together. Not that it won't preceeded by knee buckling, puking, arms falling off. etc etc.

Tue, 09/01/2009 - 13:51 | Link to Comment TPC
TPC's picture

But don't worry.  If Wells is actually in trouble they will just merge it with some other large and troubled institution.  You know, solve too big to fail with too bigger to fail.  Fight fire with fire....In other words, epic fail. 

Tue, 09/01/2009 - 14:13 | Link to Comment Hephasteus
Hephasteus's picture

Waiting for the FED to sing it's favorite song.

http://www.youtube.com/watch?v=DEyrtzMJsvo

Tue, 09/01/2009 - 14:25 | Link to Comment Anonymous
Tue, 09/01/2009 - 21:07 | Link to Comment paydirt (not verified)
Tue, 09/01/2009 - 13:28 | Link to Comment JohnKing
JohnKing's picture

Cops losing their pensions.. look out crips there is a new gang in town.

Tue, 09/01/2009 - 14:09 | Link to Comment ptoemmes
ptoemmes's picture

Teacher's too?! As in my wife?!

The wannabe crips are already in the classroom and younger than you might think.

Pete

Tue, 09/01/2009 - 14:52 | Link to Comment JohnKing
JohnKing's picture

Yes agree, but mere wannabes when the cops go rogue. Yes, I know the baby gangsters are out there but when the law goes lawless they will be the first to go.

Tue, 09/01/2009 - 13:38 | Link to Comment NumisEX
NumisEX's picture

I'd like to put a 300k bid on a 2-bedroom. What are the chances my bid will be hit?

Tue, 09/01/2009 - 14:21 | Link to Comment zarrmax
zarrmax's picture

Where'd you learn how to bid son...I know, you ran the CDOsq desk at Lehman during the '03-'06 run....j/k

Have some balls... I'm a $25k perma bid....cause

I'm a rocket man....

sorry Shatner commercial was just on.....

I'll be on the bridge...

... But Captain, we don't have a bridge

WHY THE HELL AREN'T I NOTIFIED ABOUT THESE THINGS!!!

http://www.condovultures.com/en/home/2761-bulk-deal-closes-at-94-discount-in-south-florida.html

Tue, 09/01/2009 - 14:26 | Link to Comment gmrpeabody
gmrpeabody's picture

I don't know, but the chances of you , personally , getting hit are rising by the minute.

Tue, 09/01/2009 - 14:45 | Link to Comment zarrmax
zarrmax's picture

lol....all joking aside... why would you want to step in front of anything right now (especially the housing market)?

Prices are not going up and won't for quite a while. Time is on your side.

Never deploy capital during a credit crunch. Only after the previous cycles debt has been purged from the system and the new rules of the emerging cycle have been established should you step into the market with any conviction.

- hint we are neither at the end or in the middle of this credit crunch.

Tue, 09/01/2009 - 13:41 | Link to Comment TraderVix
TraderVix's picture

That the SBA is carrying their investment at zero and Blackrock (as well as others, I'm sure) is carrying it at a higher value is a serious issue. How does that get reconciled?

Wed, 09/02/2009 - 01:56 | Link to Comment Anal_yst
Anal_yst's picture

FAS 157 and FAS 157 E.  IF L3 asset (or poss L2) - classified, so long as there isn't a transaction, Blackrock (or whomever valuing > $0) isn't in "violation" with FASB guidelines.  Actually, and I'd suggest checking with people like Francine @ re:theauditors, but my understanding of FASB guidelines is that even if there were a transaction, "distressed" or otherwise, other parties holding same/similar securities don't necessarily have to adjust their carrying value. 

Welcome to The Matrix; just remember, there is no spoon.

Tue, 09/01/2009 - 13:44 | Link to Comment Anonymous
Tue, 09/01/2009 - 13:51 | Link to Comment Obnoxio
Obnoxio's picture

I guess the public pensions at least give accurate information since the taxpayers will make good on any losses to their defined benefit schemes. The bizzaro "Enron" accounting used by the banks hopefully will get phased out at some point.

Tue, 09/01/2009 - 13:52 | Link to Comment D.O.D.
D.O.D.'s picture

DRV anyone?

Tue, 09/01/2009 - 13:56 | Link to Comment Gilgamesh
Gilgamesh's picture

That was the flare signal early this morning.  IYR was way, way down ahead of the market (along with the CRE exposed regionals).  DRV is due for some covering.

Tue, 09/01/2009 - 14:16 | Link to Comment E Thomas St.
E Thomas St.'s picture

RMZ doesn't have anything tishman speyer related in it. The only blow would be to other REITs that have to drop trou in response to this sinking ship pulling them down.

Tue, 09/01/2009 - 14:00 | Link to Comment Anonymous
Tue, 09/01/2009 - 14:13 | Link to Comment Ich bin ein whatever
Ich bin ein whatever's picture

They'd just as well merge Wells and Citi then.

That union has "epic fail" written all over it.

This is in response to TPC, post #55201

Tue, 09/01/2009 - 14:35 | Link to Comment Anonymous
Tue, 09/01/2009 - 15:02 | Link to Comment zarrmax
zarrmax's picture

didn't they receive a wells back in june?

Tue, 09/01/2009 - 14:58 | Link to Comment Anonymous
Tue, 09/01/2009 - 21:07 | Link to Comment paydirt (not verified)
Wed, 09/02/2009 - 08:09 | Link to Comment blindfaith
blindfaith's picture

That explains why my property taxes just JUMPED 30%.  All these "smart" managers should loose their jobs along with the money.  Now if they had 'invested' in Florida instead of New York, maybe FL would not be such a basket case right now.  This " conservative" state government spent for the last few years like drunk sailors. Civil servants are DEMANDING a buyout, like fat cat bankers, or salary increases right now.  Wake up Florida your suffocating the last 10 people in the state with a dollar in their pocket to make up the for losses and shortfalls, and greed from your own stupid behavior.  250 million would have bought a nice university campus, or industrial campus...or GOD forbit working class HOUSING , but those are liberal ideas.  No boubt someone got a nice vacation thank you gift, for the investment in Stuy Town.

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