Rent deal in Stuy Town, Peter Cooper Village

December 14, 2009 3:52:06 PM PST
Landlord Tishman Speyer and its tenants reached a tentative agreement to reduce rents at some 4,000 apartments at Stuyvesant Town and Peter Cooper Village. The agreement was reached Monday in state Supreme Court, and the changes will begin in January.

"Tishman Speyer and BlackRock have reached agreement with counsel for the plaintiffs on a more inclusive, six-month agreement covering a wider range of unresolved issues beyond those addressed in the interim agreement," the parties said in the statement.

The tentative deal puts to rest a major question hanging over the 80-acre property since October, when the state's high court threw out the property owners' plan to jack up rents to market rates.

The ruling said that said the owners improperly raised the monthly price of rent-regulated units while receiving tax breaks.

Tishman purchased the 80-acre East Side apartment developments for $5.4 billion in 2006. But Tishman and its partners are now on the verge of defaulting on $3 billion in loans.

The case generated intense real estate interest because other buyers of rent-stabilized apartment buildings planned to follow the same investment strategy of increasing rents to market levels.