City renters could be next victims of
mortgage mess
Sunday, September 28th 2008, 9:47 PM
An increasing number of apartment complexes face possible foreclosure and thousands of city renters could be the next victims of the mortgage crisis, housing advocates warn.
At least 580 buildings, containing 40,000 units, have one or more factors that could lead to mortgage default, Crain's New York Business reported Sunday on its Web site.
Private equity firms bought at least 90,000 affordable housing units in the past four years, many at inflated prices in badly leveraged deals, according to the Partnership to Preserve Affordable Housing.
The Riverton apartments in Harlem and Stuyvesant Town on the East Side are both at risk, according to the Crain's Web site. Riverton's owners indicated last month that they were on the verge of defaulting.
And Savoy Park, a seven-building complex in Harlem, has been placed on a watch list. Apollo Real Estate Advisors and its partners bought the complex in 2006 for $175 million.
Apollo refinanced a year later, increasing its debt to $367.5 million, the credit rating agency Realpoint reported. The agency called the risk of default on the loan "moderate to high."
Housing advocates told Crain's that buyers had unrealistic goals about rent increases. The same lenders caught up in the mortgage free-for-all in single-family homes lent them money anyway.
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