CWCapital Takes Title to StuyTown in New York, Cancels Auction

Jun 06, 2014 12:01 am ET

June 6 (Bloomberg) -- CWCapital Asset Management LLC took title to Stuyvesant Town-Peter Cooper Village, Manhattan’s largest apartment complex, and canceled an auction for control of the property.

The Bethesda, Maryland-based company, which has been managing the 11,000-unit complex on behalf of bondholders since 2010, said it exercised a deed in lieu of foreclosure on June 3. The move was in response to an unnamed investor’s attempt to seize the property, the New York Times said yesterday.

CWCapital “determined this action to be in the best interest of the certificate holders and provided the greatest stability for the community,” the company said yesterday in an e-mailed statement. “This ‘deed-in-lieu’ will have no impact on residents or on property operations.”

CWCapital paid city and state transfer taxes totaling more than $100 million, according to documents posted yesterday on the city Finance Department’s property-records website. The auction had been scheduled for June 13.

“This eliminates the circus that could have unfolded at a mezzanine foreclosure sale,” City Councilman Daniel Garodnick, who lives in the complex, said in an e-mailed statement. “It is the right next step that will give time for a more considered process that can protect not only the bondholders, but also the tenants and the city.”

Fortress Investment Group LLC was preparing a $4.7 billion bid to buy the complex, a person with knowledge of the plan said last month. Fortress owns CWCapital.

CWCapital said it’s continuing to “evaluate disposition alternatives.” The complex could still be sold to an outside buyer in the second half of the year, the company said.