UNITED STATES - At least two pension funds in the US have suffered major losses on their investments in the Stuyvestant Town and Peter Cooper Village apartment complex in Manhattan.

California State Teachers Retirement System wrote off its $100m (€69m) commitment to the asset.

Florida State Board of Administration had made a $250m commitment to the purchase.  It has now placed a value of zero on the investment.

CalSTRS and its real estate consultant, The Townsend Group, believes the property's current financial problems are  permanent state of affairs.

One of bigger issues facing this project was that the owners ran into more difficulty than they had envisioned in transferring the apartments from rent controlled to market rent.

Another factor was that the property was bought by BlackRock Realty and Tishman Speyer Properties near the top of the market in 2006.  The amount of debt on the $5.4bn transaction was around 81%.

The biggest investor in the transaction was the California Public Employees Retirement System which had invested $500m.  At the end of March, the pension fund had not placed a value on this investment.

Florida State says this will not impact its relationship with BlackRock Realty.

The pension fund has three other investments with BlackRock Realty: a $150m commitment to the Granite Property Fund, a value-added commingled fund where the committed capital has been fully drawn down; a $100m allocation to the BlackRock Diamond Fund and $100m to a retail opportunity fund where around $23m of the committed capital has been drawn down.
 

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