NPR.org, 3 Apr 2013
The whole idea behind the deal was that Tishman Speyer and BlackRock could get tenants in rent-regulated units out, and tenants who were willing to pay market rents in. But the tenants association went to court and blocked them. It turns out, you can't take advantage of public tax breaks — which they and MetLife had been doing — and raise rents the way they planned. There was no way those thousands of monthly rent checks could match the owners' debts. So they just walked away. It was easy to do because it wasn't their money on the line.
"They pretty much went through it unscathed," Bagli says, "but CalPERS [the California Public Employees' Retirement System], the largest pension fund in the country, lost $500 million. Poof — gone. ... Another pension fund down in Florida lost $250 million. The government of Singapore, well, they lost the most — over $600 million. It all just went poof."
This was the housing crisis writ large: Tishman Speyer and BlackRock lost a lot of people a couple of billion dollars, walked away from it unscathed and went into the next deal without anyone calling them out on their colossal mistake. Full story
