Other People's Money: Inside the Housing Crisis and the Demise of the Greatest Real Estate Deal Ever Made

First & foremost, it's a very good book. It is so far as I can tell, true to its theme. It is also quite evenhanded over what went wrong with the buyout of Peter Cooper Village/Stuvesant Town by Tishman Speyer (TS). This is also a bit of an essay on "when to SELL"! I keep flashing back to Robert Redford's portrayal of Gatsby: "Buy, Buy! Sell, Sell! Buy! Sell! ..."Some background:Metropolitan Life (MetLife) built a series of these housing complexes in the '40s & '50s. A friend of my father retired from his job & moved to LA. He moved into one of the highrises in MetLife's complex near La Brea. His daughter was in a townhouse in the same complex. These housing projects were strictly controlled by "the Insurance Company" and no dissent over the (strict) rules of behavior & etc. was tolerated. This suited most of the tenants of the time just fine. This is especially true of the war weary crowd of veterans & their families who made up the majority of the first and second generation tenants. Having lived on various Air Force Bases, both in the USA and overseas, I am quite familiar with this regimentation. Follow the (sometimes crazy) rules, or it's Bye Bye Birdie, you're outtahere! And, these complexes (just like Base Housing) were the best thing out there at the time.Ok, so, many years later, MetLife saw the light on the Real Estate bubble & cashed out in the grand scale. ... At the TOP OF THE MARKET! TS won the bidding war & purchased the property (backed by a crowd of mostly institutional investors). From there, all of the math used by those spreadsheeters (who planned how to handle the property) and the investors went bad. Sadly, in a big, Big, BIG way. Rental conversions to market prices went slower than projected. Folks sued to oppose & reverse eviction actions. Then, the market bubble popped, and property values collapsed. ....So, this is a tragic-comic opera in real life about what can go wrong when pie-in-the-sky financial calculations go bad.

"Other Peoples' Money" contains 2 stories: The first is the tale of a huge real estate deal that went south in a hurry. A $5,400,000,000 investment shriveled in worth to some $3,000.000, 000. As the title states, the brunt of the loss was borne by outside investors-not the wheeler dealers behind the sale. Notable among the soaked investors were the Florida State Pension System, the Province of Ontario Retirement System, and the California State Teachers Retirement System. Those affected? The little people in those locations. It is also the tale of the often interesting, if vile personalities involved. Yet OPM is basically a dry business tale the type of which has been told better elsewhereThe other tale is for those of us who actually LIVE here in Stuyvesant Town/Peter Cooper Village. Full disclosure: This reviewer has lived in the community since 1975 and is a building captain in the Tenants Association. For us, it is hard not to feel like a minnow swimming with barracudas. The wheeler dealers (no names mentioned-there is no need) simply don't care about the little folks like us. They never have and never will-especially here in New York City. Just ask the poor pensioneers. In the interest of brevity, this review will ignore the gory details. Very basically, the new guys had no idea what they were getting into. Also, the anticipated dragooned turnover of apartments did not materialize. Most of us are honest folks, living here legally, trying to be good tenants. This reviewer does not think that the new owners ever believed that. The foregoing is admittedly a vastly truncated version of the transpired events.Author Bagli tells the full story, chapter and verse. Nothing is omitted. Late in the text, the author hits a depressing note: "The dynamic (the new owners) set in motion is changing the cultural and social significance of the complexes to New York City and the nation forever". That is the sad state of affairs for those seeking-or trying to hold onto-affordable rental housing in NYC.

The title of this book is a bit of a misnomer, but it is still very interesting to read. The book is actually about the sale by Metlife of the Stuyvesant Town - Peter Cooper Village to Tishman Speyer Properties for $5 billion dollars in 2006. The sale price was based upon the wishful thinking that drove so many real estate investments during the housing bubble that thrashed the economy. Both of the properties were rent-controlled and Tishman Speyer's purchasing moguls thought they could bring the rentals to market-rate much faster than people tried to advise them that they could. After the purchase, Tishman Speyer went burning through their multimillion dollar reserve trying to cover the mortgages, hoping that they could jack up rental income, which never turned out to be the rosy picture they forecast. It never does. Where other people's money comes into play is that so many hedge funds, pension plans, etc. helped with tiered mortgages that all lost their investments when the economy came crashing down. I think the author's point is that Tishman Speyer never had anywhere near the amount of capital invested (as they should have, then they would have been much more careful about their pie-in-the-sky revenue predictions), and paid about $2 billion more than the property was worth because other people were financing the purchase. Stupidity all around. Except for Metlife which walked away with $5 billion for a property that was completely overvalued.

Ok, so it's quite long. But it's great for real estate nuts like me. Wonderful history of NYC housing and politics. Unique.

Great book on detail describing the events. I was expecting more of the narrative to be from the viewpoint of a real estate investment professional perspective. How the funds were able to make suck a mistake and why this was such a detour from prevailing investment practice. A powerful message for all city investors experiencing mini booms today and tomorrow.

Das Buch erzählt die Geschichte der Errichtung der Stuyvesant Town-Peter Cooper Village durch die Versicherung Met Life, die lange Phase des Managements der Immobilie sowie der Verkauf des Objektes an ein Konsortium aus Tishman Speyer und Black Rock für unglaubliche 5,4 Mrd. bei lediglich 100 Mio. Mietüberschuss. Der Business Plan, Im wesentlichen die zügige und deutliche Anhebung der Mietüberschüsse ging nicht auf. Der Autor erzählt aber auch die Geschichte der Mieter, die nach dem Krieg vor allem Lehrer, Feuerwehrleute und Angestellte der Versicherung waren. Dieses soziale Milieu änderte sich jedoch mit Anhebung der Mieten, der Prozess der Gentrifizierung findet auch hier folgerichtig statt. Ein lesenswertes Buch über das Scheitern eines Business Plans im Immobiliengeschäft.

This was a gift, I'm sure he will enjoy it