UPDATE 1- Stuyvesant Town auction delayed again

Thu Oct 21, 2010 6:25pm EDT

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* Foreclosure auction postponed again - source

* Foreclosure auction set for Oct. 29 - source

By Ilaina Jonas

NEW YORK, Oct 21 (Reuters) - The foreclosure auction of Stuyvesant Town/Peter Cooper Village, a big Manhattan apartment complex that has lost more than half its value over the past three years, was postponed again to give lenders and borrowers more time to negotiate, a source familiar with the deal said.

CWCapital Asset Management, which represents bondholders holding the $3 billion mortgage on the property, rescheduled the auction to Oct. 29 from Oct. 22, the source said. It was originally set for Oct. 4. CWCapital declined to comment.

CWCapital earlier said it expected the bondholders would become the new owner until a final sale was arranged.

Talks are continuing between CWCapital and private equity firm Tishman Speyer Properties, which leads a group that bought the property in 2007, said the source, who was not authorized to speak publicly on the matter.

CWCapital also is continuing talks with a joint venture led by hedge fund Pershing Square Capital, headed by William Ackman, and Winthrop Realty Trust (FUR.N), the source said.

Pershing Square could not be reached for comment.

The group of investors led by Tishman Speyer paid $5.4 billion for the 56-building complex on 80 acres (32 hectares) on Manhattan's East Side.

But the decline of the real estate market and an adverse court ruling that said the rent-stabilized apartments had been illegally deregulated upended the group's business plans and they defaulted on their mortgage payments in January.

Most of the investors, including the California Public Employees' Retirement System (Calpers), lost their investment.

Property analysts estimate that the complex is now worth about $2 billion as rent-stabilized apartments.

(Reporting by Ilaina Jonas; Editing by Ted Kerr)

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