Call it the final death knell for arguably the frothiest deal that the US residential real-estate market has ever seen — the sale of Stuyvesant Town and Peter Cooper village in Manhattan for $5.4 billion in 2006. The driving force behind the deal was the expectation that the new owners could and would be much more aggressive than the old owners (Met Life (MET)) in converting rent-stabilized apartments to market rate. Now, however, all the apartments they did manage to convert to market rate are being converted back:

Lawyers for the Stuy Town tenants as well as for landlord Tishman Speyer have just announced an interim agreement while the bigger issues (like refunds on years of rent overcharges) get sorted out. Apartments will return to rent-stabilized levels in January, and each affected tenant will be granted benefits—lease renewals under stabilized rates, succession rights—under the Rent Stabilization Law.