In just over three years, real estate giant Tishman Speyer and its partner, BlackRock, lost billions of investors’ dollars on a single deal. The New York Times reporter who first broke the story of the sale of Stuyvesant Town-Peter Cooper Village takes readers inside the most spectacular failure in real estate history, using this single deal as a lens to see how and why the real estate crisis happened.
How did the smartest people in real estate lose billions in one single deal? How did the Church of England, the California public employees’ pension fund, and the Singapore government lose more than one billion dollars combined investing in a middle-class housing complex in New York City? How did MetLife make three billion dollars on the deal without any repercussions from a historically racist policy of housing segregation? And how did nine residents of a sleepy enclave in New York City win one of the most unlikely lawsuits in the history of real estate law?
Not only does Other People’s Money answer those questions, it also explains the current recession in stark, clear detail while providing riveting first-person accounts of the titanic failure of the real estate industry to see that a recession was coming. It’s the definitive book on real estate during the bubble years—and what happened when that enormous bubble exploded.
In recounting the collapse of "the biggest real estate deal in history," New York Times reporter Bagli provides an intriguing display of boom psychology perpetuating itself. His absorbing account of the transformation of Manhattan's mammoth Stuyvestant Town Peter Cooper Village apartment complex from a haven for moderate-income families to a developer's dream captures the spirit of the frenzied real-estate market of the first few years of the 21st century. Bagli expands the controversial clash between developers seeking to deregulate rents and tenants concerned with marginalization of the middle class into a larger metaphor for wealth contending with basic needs. His focus, though market-based, is not exclusively economic; he also reviews, in the history of this apartment complex, the change of consciousness relating to civil rights and provides glimpses of a time when corporate paternalism seemed welcome and tenants reflexively accepted regimented conditions and rules. Current New Yorkers may derive wry amusement from the anger of tenants in 1952, when the complex owner sought to raise the monthly rent on four-room apartments to an astonishing $100. The reader interested in New York real estate history, its moneyed elites, or even the self-contradictory aspects of social investment should find ample material for reflection and enjoyment in Bagli's account.