Read “Other People's Money: Inside the Housing Crisis and the Demise of the Greatest Real Estate Deal Ever Made” by Charles Bagli and prepare a report ( 5 pages, 12 font, Times New Roman, double...

Summary Report
“Other People’s Money: Inside the Housing Crisis and the Demise of the Greatest Real Estate Deal Ever Made”
“Other People’s Money: Inside the Housing Crisis and the Demise of the Greatest Real Estate Deal Ever Made” is written by Charles Bagli who inspects the collapse of the largest real estate deal in New York, the much hyped and famous acquisition of the Stuyvesant Town- Peter Cooper Village and the subsequent fall that was to follow. Peter Cooper Village wasn’t like the other properties that were traded on daily basis in New York. It had eighteen blocks which were among the most valuable real estate in the world. The residential complex situated in Manhattan covers over 80 acres and is confined by 1st Avenue and Avenue C between East 14th Street and East 23rd Street. The complex is made up of two components, Stuyvesant Town with 8746 units and Peter Cooper Village having 2481 units, a total of 11,227 units contained in 110 buildings. The apartments vary from one bedroom to five bedrooms. The property was constructed by the Metropolitan Life Insurance Company from 1945 to 1947. It was constructed to address the problem of housing shortage in the city after the World War II. The complex was constructed for mainly middle class housing and the people with their income in Mayor’s housing plan could stay there.
MetLife had the ownership of the complex from 1947 to 2006, when it sold the property at price of $5.4 billion to Tishman Speyer and BlackRock. The new titleholders aimed at increasing turnover rates by converting the rent stabilized units to market rates. The money for the buyout came from the banks, domestic and foreign pension funds, the Church of England, and a foreign government. Tishman Speyer and BlackRock had to pay less than 1% of the total amount from their pockets and it was traditionally a buyout on what is known as Other People’s Money in business.
The deal was made when the real estate market was at its peak when the developed Tishman Speyer and BlackRock paid $5.4 billion for the largest real estate deal in the United States. At the time of the deal, the aim of the owners was to increase the rental income from the property. They applied aggressive strategies to convert the rent stabilized units to market rates to increase the rents but ultimately they failed to do and were unable to meet the debt obligations and finally in Jan 2010 they defaulted on the mortgage payments for the property.
Tishman Speyer and BlackRock funded the deal by taking an interest only mortgage of $3 billion and another loan of $1.4 billion. They raised $2 billion from pension funds, foreign government and other sources....