Riverton Houses in Foreclosure?

Oh Wow Family...

Someone just alerted me via email about these articles regarding Riverton Houses in Harlem......

A River Ran Through Them
Monday, August 18, 2008, by Joey

The owners of the 1,230-unit Riverton Houses rental complex in Harlem—built by MetLife to be the black Stuy Town—are about to default on the property's $225 million mortgage because they couldn't meet their goals in turning rent-stabilized apartments into market-rate ones. But by how much were their projections off? Well, the goal was to convert 50% of the units, but they only converted 10% in just under two years. Oops. Cue the Crain's doomsday headline! [Crain's]

Big Harlem landlord signals end is near

In a sign that even New York’s healthy residential market isn’t immune from the nation’s housing woes, the owners of the rent-stabilized Riverton Houses in Harlem say they expect to default on their $225 million mortgage next month,The owners of the 1,230-unit complex, Rockpoint Group and Stellar Management, told the company that services their mortgage that they won’t have enough money to make the September payment. They blame their inability to deregulate units as quickly as expected, according to Trepp, a firm that tracks commercial mortgage securities. The owners said that to date they have only been able to convert 10% of the units to fair-market rents. Neither Rockpoint nor Stellar returned calls for comment.Manus Clancy, senior managing director at Trepp, said the pending default is one of the largest he has seen in the last 12 months.


The story was first reported in the Wall Street Journal. The news of the pending default will be yet another blow to investors in mortgage-backed securities. The Riverton House mortgage was obtained in 2006 and then put into a pool with other commercial real estate loans that were later sold to investors as mortgage-backed bonds. Mr. Clancy says the Riverton Houses loan is the sixth largest in the $6.6 billion pool.Shimon Shkury, a partner at Massey Knakal Realty Services who specializes in Harlem, said the owners likely fell victim to a tightening credit market, which, along with rising fuel costs, is making refinancing difficult.“The buildings still have value,” Mr. Shkury said.

The complex, located between East 135th and East 138th streets and Fifth Avenue and the river, was built by the Metropolitan Life Insurance Co. to house black tenants that were excluded from its other complexes, Peter Cooper Village and Stuyvesant Town.

I spent a lot of time during my childhood in Harlem, passing through and hanging out in "The Riverton"..often times just passing through to get to the complex located next to it..."Riverbend". It was always kept very clean and well maintained and EVERYONE wanted to live there...I am sitting here wondering (because I am still a little fuzzy on this whole foreclosure thing) what happens after this sort of thing? What happens to the tenants? They don't lose their homes do they?

On a totally different note...lol...I wonder if the "Stellar Management" mentioned in the article is the same "Stellar Management" that I used to write my rent checks to when I lived on Madison Avenue ...in the beautiful, sunny apartment that had all the mice I was catching and naming in an earlier blog.......

"The origin of every excuse is the failure to do something."