The Day the Housing Bomb Explodes

The housing bomb is ticking...tic...tic...tic. Like most of the economic problems we are facing little attention is being given to problems already built into the market. In this case, the housing market.

Here is a good, or bad depending on your viewpoint, example. Tishman Speyer Properties LP and BlackRock Realty, owner of Manhattan’s largest apartment complex, are relying on a reserve fund to pay debt on the property and have only six months of money left before the reserve runs out. First key words, Manhattan's largest apartment complex. Next key word--‘Depleted Fund’. Depleted fund means the reserve that was set aside from the financing of this property.

Once the fund runs out of money someone is going to need to dip into their pocket and start paying to keep the property afloat. The property currently has $3 billion in bonds outstanding. This would be one whopper of a default. Three billion on a single property..whew. The chances that this can be refinanced is slim. The bonds have already be downgraded.

How many of these ticking time bonds are there in New York? Or for that matter, in the major cites across the country? Has the market digested this information? Has the stock market discounted this information?

Tishman’s Stuyvesant Town Fund May Run Dry This Year

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