Oakland Bankruptcy Attorney comments on a New York bankruptcy that could cost CalPERS more than $500 million
Oakland Bankruptcy Attorney comments on a New York bankruptcy that could cost CalPERS more than $500 million
CalPERS may lose the $500 million it invested in the Manhattan apartment complex called Peter Cooper Village and Stuyvesant Town. CalPERS was part of an investment group that purchased the complex for $5.4 billion in 2006. CalSTRS, another state public pension fund, has already written of the $100 million it invested in the deal. The project, owned by a partnership led by Tishman Speyer Properties and BlackRock Inc. is expected to go into default within the next few months and is expected to file for Chapter 7 or Chapter 11 bankruptcy protection. The value of the real estate has dropped to an estimated $2.1 billion from the $5.4 billion purchase price 3 years ago.
This is not the first significant real estate loss that CalPERS has suffered this year. The public pension fund lost nearly $1 billion on one real estate project, known as LandSource, which filed for Chapter 11 bankruptcy reorganization protection earlier this year. CalSTRS has lost 43% on its real estate holdings this year, and the two funds have lost more than $100 billion during the past fiscal year as their real estate, stock market and other investments declined in value. Much of the decline was in stocks and other financial instruments, but their real estate portfolios have shrunk dramatically in value as the economy has slid into recession.
CalPERS Could Lose $500 million on N.Y. Real Estate Deal, Sacramento Bee, October 15, 2009
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