After a raucous reception for the first installment, The Promote’s CRE Junkie Holiday Gift Guide™️ is back by popular demand. We’ve done the research, across budget, theme & sensibility, to find 6 items certain to bring joy to a CRE-obsessed loved one. Enjoy, & obviously don’t take this too seriously (except the last one!) - HS

Odysseus’ epic journey from Troy to his native Ionian island of Ithaca took 10Y, putting our hero through a series of seemingly insurmountable challenges, from sorceresses to sirens to sea monsters.

Michael Gontar’s journey from acquiring the mammoth 111 Wall Street to landing a record-smashing $867M office-resi financing package took about half that time. But the battles the InterVest boss fought along the way, from Covid to dueling lenders to UCC foreclosures to a scam artist partner, were no less epic. This account is based on public records, news reports, confidential financing decks & conversations w/ deal insiders, who requested anonymity to share the kind of deets The Promote’s readers live for. This story is hella complex, so the easiest way to do this is a timeline. Yalla, let’s break it down.

⌛ Summer ‘19: 🐐 David Werner ties up the leasehold for the ≈ 1M sf (the size will keep changing throughout this story, b/c that’s how we do in Manhattan office), agreeing to buy it for $175M ($175/ 🦶) from Zurich Insurance. At the time, the property, built in ‘68 as the HQ for First City National Bank, is fully occupied by Citi, but the bank’s on the way out, making this a blank-slate office repositioning opp’ty
⌛ Early. ‘20: Werner, as is his wont, flips 🤸 the contract to Elie Schwartz’s Nightingale & its repeat backer InterVest (the artist then known as Wafra Capital Partners) for $195M, per sources, pocketing a cool $20M for his troubles. The buyers land acq. financing for the deal from SL Green, debt arranged by Newmark’s Dustin Stolly (remember the name) and Jordy Roeschlaub. At the time, Schwartz is riding high w/ trophy deals such as the Coca-Cola Building (711 Fifth) under his belt, and the partners go on the hunt for a construction loan. But Covid hits 🦠, and 111 Wall becomes, as one insider put it, “a case study for the worst timing on an office deal.”
⌛ Summer ‘21: The partners buy the fee interest from the Korein family for $220M, and nab a ≈ $500M acq. & construction financing package from a motley crew of pockets: SKW Funding [the Bain-backed artist now known as Dalan Credit (Danny Wrublin)] ran point on the whole loan, per sources. It brought in Oaktree for the mezz, Petros PACE for the C-Pace (typically structured as a long-term lien) Pimco for the sr., and kept the jr. mezz (i.e. the most expensive paper). This package, too, was brokered by Stolly & co. In late ‘21, Schwartz & InterVest CRE head Robert Rothschild (btw GREAT name for a man in the OPM business) discuss the deal w/ CO, w/ Schwartz saying: “We put a lot of money behind it, and putting your money where your mouth is is important.” 🫡
⌛️ Summer/late ‘23- Felonious Monk: Things are starting to go publicly bad for Elie Schwartz right around now… Meanwhile, the 2Y debt package is maturing 🧀 and the lenders, seeing the Schwartz mayhem, do not wish to extend. Oaktree files a UCC foreclosure action on its mezz, but cometh the hour… InterVest, backed by Kuwaiti institutional and SWF money and a major conduit for sharia-compliant capital, steps up and says “not on my watch,” one deal insider recalled. It reassures the lenders that it will do whatever it needs to do to save the deal, incl. kicking in more equity. “Nine times out of 10,” an OPM manager would throw in the towel, the insider said. InterVest, however, promised to “keep fighting.” Because living rent-free in Gontar’s head was Nathan Berman.

The office-resi alchemist had impressed upon Gontar the tremendous opportunity that a conversion could offer. Resi rents in FiDi were rapidly climbing, and the hulking mass of 111 Wall (now billed at 1.1M sf 🤷 ) could allow for 1,500+ units if done right. Nathan was “angling for a way to get involved,” one insider said. The wrinkle: the loan docs stipulated that the sponsors would need lender approval for a different use of the funds. InterVest needed to get Oaktree on board, which would buy it time to get Pimco on board, one source said. And that worked: Sensing its best way to get paid back was to give its blessing to an office-resi project, Oaktree cancels the foreclosure.

⌛️ Summer/late ‘24: The long-suffering Pimco has had enough: It decides to shop its sr. note 🛒 , according to sources familiar w/ the matter. This is a big WTF moment for both Oaktree and the sponsors: The last year-and-change has been kind to the deal, which has gone from a disaster of an office play to a golden office-resi goose, w/ resi rents continuing to rip (25 Water, 55 Broad at $110/ 🦶 ). An opportunistic investor snagging the sr. to take over the deal would be a disaster for all involved. “If someone buys the senior, it becomes Oaktree’s problem,” is how one stakeholder put it. Promote Insiders, read on after the jump. 👇 🔒