Archive for February 2nd, 2010
Foreclosure…The Mother of Ethics?
February 2nd, 2010 | 
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Gretchen Morgenson, columnist for the NY Times wrote an article the other day referencing Tishman Speyer and BlackRock’s default on Stuyvesant Town and Peter Cooper Village. Her point is essentially that Tishman Speyer and BlackRock were not the only investors who took advantage of credit in ’06 and ’07 to make the numbers work on multi-family properties. Many smaller players had a similar strategy in which they would make highly leveraged acquisitions and ratchet up rents aggressively not only to meet debt obligations but achieve stellar equity returns as well. Morgenson draws attention to Vantage Properties, an owner of 9,500 rental units in NYC whose strategy has been to acquire rent controlled apartments and ratchet up rents quicker than scheduled to achieve the returns required by Vantage and its equity partner Area Property. Vantage began to operate in an ethical “gray area” to carry out this strategy. Will lawsuits and foreclosures in a depressed CRE market trigger the ethical conscience of owners? Read the rest of this entry »
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