StuyTown lawyer sees red on property report
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The tenant lawyer who recently led a groundbreaking court battle over rents at Stuyvesant Town-Peter Cooper Village is up in arms over a Wall Street report that predicts the ruling will drain billions in dollars from the city’s real estate market.
Alex Schmidt charged the Deutsche Bank report is based on “inaccurate assumptions” that “approach the irresponsible,” adding that losses would be “a fraction” of what it predicts, and that it overstates the financial impact of the ruling on New York’s landlords.
“Having studied [the report], it seems apparent it contains a number of assumptions that are either inaccurate or unwarranted,” Schmidt said of the report, which was released earlier this week to much fanfare.
In October, the New York Court of Appeals sided with Schmidt and StuyTown’s tenants over a controversial case charging the owners of the iconic apartment complex of improperly raising rents on thousands of rent-stabilized apartments.
The ruling opened a flood of questions for both StuyTown’s owners, real estate giant Tishman Speyer and money manager BlackRock, and landlords across the city, who suddenly faced the prospect of millions in damages and rent overcharges.
In its investor report, Deutsche Bank said the ruling will result in “a significantly negative impact on the New York apartment investment market for several years.”
“In the end, the court ruling . . . may result in billions of dollars in losses, both to property owners and [commercial mortgage-backed securities] bondholders,” the report warned.
The lawyer fired back in a exclusive interview with The Post that the ruling affects only those apartments built before 1974. What’s more, he said the financial hit will be limited to popular rental areas, such as Manhattan, because market-rate rents in more depressed areas are already low.
“Because rent-stabilized rents go up in lockstep citywide, the rent-stabilized levels in the middle of Queens or the outreaches of Brooklyn are going to exceed market rates in some cases,” he said.
Schmidt also said the bulk of losses to properties like StuyTown are the result of economic forces, not the ruling.
A Deutsche Bank spokeswoman declined to comment.