Government of Singapore Investment Corp., manager of more than US$100 billion ($134 billion) of the city-state’s foreign reserves, reported losses from its investment in Manhattan’s largest residential enclave.

Tishman Speyer Properties LP and BlackRock Inc. said on Jan. 8 they missed a bond payment tied to their US$5.4 billion purchase of the 80-acre property, which includes Stuyvesant Town and Peter Cooper Village apartments. Missing the payment puts the property on course to become the second-largest default in a commercial mortgage-backed security in the US.

GIC owns a US$575 million mezzanine loan backed by the property, the Wall Street Journal reported in October, citing unnamed people familiar with the matter. The sovereign wealth fund, among the world’s top 10 global investment companies, also holds about US$100–$200 million in equity, according to the newspaper report. A GIC spokeswoman declined to confirm the numbers today.

GIC’s assets fell more than 20% in the year ended March 31 following the collapse in global financial markets. The fund increased its allocations to alternative investments, including private equity, real estate and hedge funds, to 30% in the 12-month period, from 23% in the previous fiscal year.

Court Ruling
Tishman Speyer and its partners moved closer to defaulting on US$3 billion in loans they used to purchase Manhattan’s largest apartment complex after a New York court ruled in October that the owners illegally raised rents on thousands of tenants.

“GIC recognised the losses following the ruling by the New York Court of Appeals in October 2009 which precipitated the default,” the spokeswoman, who declined to have her name used, said in an e-mail.

The losses were written down, the local press reported today.

Tishman Speyer and BlackRock bought the 11,200-unit property — Manhattan’s biggest apartment complex — in 2006 with plans to raise rents, evict illegal occupants and upgrade with amenities including a gym, concierge service and new gardens.

Those plans were challenged by a recession, slackening demand for rentals and a legal victory for tenants who claimed some rent increases were illegal. The World War II-era development houses about 25,000 people.