Reserve funds for Stuyvesant Town and Peter Cooper Village, Manhattan's largest rental apartment complex, will be depleted by the end of the year if owners Tishman Speyer Properties LP and BlackRock Inc. don't put in additional capital, Fitch Inc. said.

Fitch downgraded four issues of commercial mortgage-backed securities on the property, totaling $3 billion, on Friday.

"Cash flow generated from the property remains significantly below what is needed to service the current outstanding debt," Fitch analysts Adam Fox and Gregg Katz wrote. "The borrower continues to use debt service reserves to cover operating shortfalls."

Tishman Speyer and BlackRock bought the 80-acre, 11,200-unit Stuyvesant Town-Peter Cooper complex for $5.4 billion in 2006 using $3 billion in loans. The loans were bundled with other commercial mortgages and sold in five debt offerings.

The companies banked on converting 1,600 rent stabilized units to market rates, which proved more costly than expected.

The $400 million reserve set aside when the property was purchased in 2006, has "essentially depleted," to $49.3 million this month, according to Fitch.

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