The New York Magazine takes a behind the scenes look at the largest real estate deal in American history - the $5.4 billion sale of MetLife's Stuyvesant Town residential complex to Tishman Speyer/Blackrock. It's a fascinating read that illustrates how a deal which seemed to make good sense at the time could turn sour so quickly in a short period of time. Tishman Speyer, a sophisticated real estate developer, who did many things right including selling $10 billion of real estate at the top of the market, is learning it the hard way that office building management skills don't necessary translate into being able to manage apartments effectively and that converting rent-controlled units to market units is one of the hardest things to do in New York. But like a true developer, Tishman only has $54 million equity in the deal and probably already got some of it back through management fees (assuming management fees are not deferred by the lender).
(hat tip: DealBook)