The Promote Podcast

This week, we break down two asset classes on extreme ends of the fortune spectrum: The first, NYC rent-stabilized multifamily, which is facing a tidal wave of distress, with name-brand sponsors battling with lenders and very few investors willing to take the plunge. The second, massive data centers, which global investors cannot seem to stop throwing money at. We dive deep into both the carnage and opportunity in both sectors, as well as look at the players at the center of both. We tackle Pinnacle Group placing 5,000 units into bankruptcy protection in New York and Peter Hungerford's contrarian megabet on the rent-stabilized space. We then break down Blue Owl's OpenAI-anchored hyperscaler data center in Abilene, Texas, which was just funded to the tune of $11.6 billion.

Favors:
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3) Tell your CRE junkie friends about us

Further reading:

Inside New Yorks Rent-Stabilized Mess: https://www.thepromote.com/p/nyc-rentopoly-a-dealmacher-s-grand-larceny-charge#inside-new-yorks-rent-stabilized-me

Inside The Finances Of 4,300 Rent-Stabilized NYC Apartments: https://www.bisnow.com/new-york/news/affordable-housing/the-crisis-has-already-started-inside-the-finances-of-4300-rent-stabilized-nyc-apartments-129459

NYCB Comes for Wiener: https://www.thepromote.com/p/oh-miki-you-re-so-fine-wiener-s-empire-on-the-brink#nycb-comes-for-wiener

Dons of Data Centers: https://www.thepromote.com/p/dons-of-data-centers

OpenAIs Biggest Data Center Secures $11.6 Billion in Funding: https://www.wsj.com/tech/ai/openai-data-center-funding-microsoft-75e879b6

This week, we dive deep into one of the most extraordinary tax loopholes that the CRE market has ever witnessed: the Traveling HFC, a Texas property-tax absolving vehicle that's been adopted en masse by distressed syndicators, agency lenders and a cottage industry of consultants, nonprofits and attorneys. The most punitive version of a bill designed to torpedo it flew through the Texas Senate, and now the industry is grappling with a very rude and abrupt end to a too-good-to-be-true party. We're joined by Texas' own Barrett Linburg to discuss the HFC saga, the gold rush it set off and what the fallout could mean for the long-term health of affordable housing in the state. Hiten and Will then discuss the Zeckendorf Brothers' latest big swing: an ultra-luxury condo at 80 Clarkson Street that has reportedly scored a half-billion dollars in sales without any fanfare – we unpack the players and lenders behind this quiet giant. 

For advertising inquiries, contact us at [email protected]
More information about our guest Barrett Linburg at Savoy Equity Partners https://savoyequity.com/ and on Twitter https://x.com/DallasAptGP
Find Hiten @hitsamty on Twitter  

Relevant reads:

1) The Texas Chainsaw Massacre: https://www.thepromote.com/p/the-texas-chainsaw-massacre-schwartz-s-puretz-playbook#steamrolled-syndicator-lifeline-on-
2) Inside Syndicators' Favorite Housing Loophole: https://www.thepromote.com/p/inside-syndicators-favorite-housing-loophole-mayweather-s-ko-deal
3) Inside Texas' Vanishing Property Tax Rolls: https://www.thepromote.com/p/inside-texas-vanishing-property-tax-rolls-dimon-s-byte-sized-delights#inside-texas-vanishing-property-tax
4) Texas landlords scramble for property tax breaks worth millions as loophole closes: https://www.houstonchronicle.com/news/investigations/article/texas-developers-property-tax-loophole-closing-20066584.php
5) Quiet Kings of Capital: https://www.thepromote.com/p/the-promote-the-quiet-kings-of-capital
6) House of Outrageous Fortune: Fifteen Central Park West, the World's Most Powerful Address: https://www.amazon.com/House-Outrageous-Fortune-Fifteen-Powerful/dp/1451666195

This week, we break down the sensational allegations made by the feds against former New York golden boy developer Josh Schuster – and why they are emblematic of the market. We dive into a big judgment over Personal Guarantees brought against multifamily mad lads Sean Kia and Ryan Andrade of Tides Equities – the case has important implications for syndicators. And we have a reprieve of sort on the tariffs- will it be enough to restore normalcy to the CRE markets? 

Sponsor: This episode is sponsored by AirGarage, the modern parking solution for real estate owners. Go to airgarage.com/promote to learn more. 

Relevant reads:
 1) USA v Schuster: https://www.thepromote.com/p/usa-v-schuster-a-skyscraper-installment-payment-plan#usa-vs-schuster
2) A Grandson Wants to Do His Grandfather Proud https://www.wsj.com/articles/a-grandson-wants-to-do-his-grandfather-proud-1474248482?utm_source=www.thepromote.com&utm_medium=referral&utm_campaign=usa-v-schuster-a-skyscraper-installment-payment-plan
3) Is developer Josh Schuster’s fast rise spiraling out of control? https://therealdeal.com/new-york/2021/07/16/is-developer-josh-schusters-fast-rise-spiraling-out-of-control/ 
4) Gotta pay the piper: https://www.thepromote.com/p/tides-lads-judgment-day-caisse-bails-on-sf-multi#gotta-pay-the-piper
5) Founder Mode: Starwood Comes at Tides’ Principals https://www.thepromote.com/p/tides-principal-punishment-greystar-s-modular-bets#founder-mode-starwood-comes-at-tide

This week, we dive into the tangled web of Jona Rechnitz, a New York real estate developer who was caught up in a massive NYPD corruption scandal before heading to LA and reinventing himself as a diamond dealer and Floyd Mayweather whisperer.  Rechnitz is the archetype of a netherworld character who somehow keeps popping up in real estate: the hustler with the incredible Rolodex and fuzzy origin story, someone who manages to whip up controversy whereever he goes but keeps escaping any real consequences. We also take a close look at a lawsuit that has cast a pall over Billionaires' Row, alleging that the developers of 432 Park Avenue ignored warnings of serious structural issues – and what this action says about this new and still relatively untested asset class. A big thank you to our sponsor for this episode, AirGarage – find out more about their full-service parking management solution at Airgarage.com/Promote

Further reading: 

Jona Rechnitz Atavist profile: https://magazine.atavist.com/all-that-glitters-jona-rechnitz-lawsuit-jadelle-jewelry-coba-ethereummax-mayweather/ and The Promote's CRE-focused summary: https://www.thepromote.com/p/rechnitz-s-righteous-gemstones-rfr-s-one-click-salvation#rechnitzs-righteous-gemstones

Harry Macklowe profile: https://www.nytimes.com/2013/10/06/nyregion/harry-macklowe-gambles-again.html?ref=nyregion&utm_source=www.thepromote.com&utm_medium=referral&utm_campaign=supertall-retribution-ackman-s-baby-berkshire-playbook

432 Park lawsuit: https://www.crainsnewyork.com/real-estate/432-park-owners-sue-harry-macklowe-and-cim-group-165-million-alleged-fraud-over-facade?utm_source=www.thepromote.com&utm_medium=referral&utm_campaign=supertall-retribution-ackman-s-baby-berkshire-playbook

Downside to life in a supertall: https://www.nytimes.com/2021/02/03/realestate/luxury-high-rise-432-park.html?utm_source=www.thepromote.com&utm_medium=referral&utm_campaign=supertall-retribution-ackman-s-baby-berkshire-playbook 

This week, Northwind Group's Ran Eliasaf, one of the most active private lenders in New York real estate, gives us an inside look at the debt game – the returns, the structures and the nuances of funding some of the city's most high-profile projects. He walks us through the capital stack of the supertall condo tower at 125 Greenwich in particular, building on our discussion from last week. Will and Hiten also chop it up on Adam Neumann's latest venture, Flow, a multifamily operator that is bleeding money all over the place, but STILL manages to raise more venture capital. A big thank you to our sponsor for this episode, AirGarage – find out more about their full-service parking management solution at Airgarage.com/Promote