Remember the Tishman Archstone Deal?

The largest acquisition in the history of the multifamily REIT market was Tishman & Lehman's $22.2 billion acquisition of Archstone’s multifamily portfolio of 359 communities (more than 87,600 units) which was completed in mid 2007. When the CMBS market tanked as they were trying to close the deal, the buyers scrambled to put together financing. The solution came with Fannie purchased a $7.1 billion credit facility, its largest credit facility to date. Freddie bought two pools of loans totaling $1.8 billion, the largest pools it had ever done. The Irvine Co. bought a 90 percent interest in 15 of the communities, which brought in another estimated $1.4 billion, and the company also made an equity investment. Lehman had $2.4 billion of equity in this deal on its books when it collapsed. In 2008 Archstone lenders injected $500 million+ to prevent a default. Given that nationally, rents have fallen 10%+ since the deal closed, vacancy has increased from 5.5% to 8%, and CAP rates have increased 250 bpts+, the Archstone owners' equity is almost certainly gone and the debt is probably underwater.