On Wednesday, Promote Insiders got the skinny on Gary Barnett’s latest moves: he’s mezzin’ around in Midtown and gunning for a hot new acquisition in Philly. There’s also news on Sevenstone Capital vis-a-vis Fannie, and a snapshot of CRE’s Winston Wolf: Robert Verrone. If this sounds like your jam, you can sign up for premium on a 2-week free trial and read it here.

You can feel Marc Lipschultz’s exasperation with how his craft is now being perceived. In mere months private credit has gone from being the darling of the finance world to something perceived as a hotbed of cockroaches, with systemic shock lurking beneath the surface 🪳🪳And perception matters for a public co – his Blue Owl’s stock is down 41% YTD. Lipschultz feels it’s much ado about nothing.👇

This week, we explore why more multifamily REITs are offering themselves up at the altar - there just doesn’t seem to be a real path forward for many of these midsize players in this capital-markets environment. We then look at Marriott’s mercy killing of Sonder and the lessons to take away from yet another high-profile proptech 🦄 implosion. And finally, the Mooch’s OZ fund was kinda like the Mooch’s White House tenure. Short and painful.

Listen on Spotify here, YouTube here or Apple Podcasts here. Brands: To get in front of our obsessed audience of CRE insiders, reach out here.

“It is fundamentally incompatible, just truly mathematically incompatible, to feel concerned about Blue Owl—to be concerned about the health of the senior lender community—and then be excited about everything in line behind it to get paid back,” Lipschultz told Barron’s in a rather defensive new interview. “They are not compatible worlds.” His point: If you believe private credit is screwed, you better feel the same way about the bond & equity markets. He then addressed Blue Owl’s mega-exposure – $50B+ committed just in the past 2 mos – to data centers, noting that his firm is in the mix on the 3 biggest new projects (Read the tick-tock on its doubleteaming w/ Pimco to win the prized Meta financing assignment). There’s a growing chorus of voices that the space is due for a reckoning, to which Lipschultz says: “In the next 10 years, is AI going to be a significantly transformative force in the world and economy? I think it would be hard to ‘take the under’ on that argument.”

“The right lease—with no ability to leave your lease, and with a guarantee from the corporate parent—is an exceptionally secure instrument,” he said of having hyperscaler tenants, who tend to use SPVs for their lease deals. “Now, if you’re on the negative side of Microsoft and Meta and Google paying their bills, I suspect you have graver concerns.”

Related: Don’t miss our insider breakdown on the glaring lack of transparency in data-center SASB CMBS deals

Office landlords are used to having to fill space when a tenant decides to ditch or downsize. Less common is having a trophy tenant evaporate overnight.

Vlad Doronin’s OKO and Jonathan Goldstein’s Cain International signed Banco Master to a record-breaking $190/ 🦶 lease last year at 830 Brickell, their Miami office tower that’s become a symbol of that city’s aspirations to compete w/ Manhattan for blue-chip tenants. The Brazilian bank agreed to lease 26K sf at that decidedly single-malt rent, bringing the tower to full occupancy. Now though, that marquee deal – which came with signage rights on the side of the property – is up in the air, what w/ the bank’s meltdown back home in Brazil. Its chief executive, Daniel Vorcaro, was arrested earlier this week in Sao Paulo, w/ authorities alleging he tried to flee the country.

Brazilian authorities have accused the bank of creating fugazi credit instruments, per Bloomberg. The bank quickly became a hotshot tenant across the globe; it was neighbors w/ Google in Sao Paulo and considered trophy space in London. At 830 Brickell, the Brazilians would have hobnobbed w/ the likes of Thoma Bravo and Citadel Securities. Now though, Cain/Oko will have to fill that void - Banco Master never occupied the space, and never finished the buildout.

“God willing, we are going to buy over $1 billion in this market,” Empire Capital’s Josh Rahmani proclaimed in ‘21. But how much of that bounty will they actually get to keep?

We wrote last summer about how Rahmani and fellow Great Neck striver (and cousin of c) Ebi Khalili were on an office building acquisition tear, finding a variety of deeper-pocketed partners (Namdar, Hakimian) to back them. At least one of those buys has already been handed over to lenders. Now, Empire has flipped 2 Atco (Hemmerdinger family) buildings it was in contract on to another buyer group, though it’ll maintain a small piece of the action. Olmstead Properties (Samuel Rosenblatt, Steven Marvin) has closed on the buildings at 381 and 373 Park Ave South. The firm has been on the acquisition sidelines since ‘16, and Marvin told CO that “these buildings are our bread-and-butter type of asset class.” 🥐 🧈

Newmark (Spies, Doneger 🥍 etc.) brokered the deal. The final pricing here is worth unpacking: Olmstead said it’s paying $104M ($305 / 🦶 ), per CO. And it landed $82M in debt from BNY Mellon at a 60% LT post-completion value of $140M, per TRD . But when the contract with Empire was inked, the pricing being reported was in the $130M ($380🦶) range, and one doesn’t expect to see 20% haircuts on retrades. So here’s what actually happened, deal insiders told The Promote: Empire was out in the market trying to raise equity at that $130M figure, because it represented their loaded basis (low $100M acq. plus capex) – makes sense when you compare it to Olmstead’s all-in value post-completion. Anyway, Empire, which had put down a few million $ in a nonrefundable deposit, struggled to raise the cash, and pushed to delay the closing. Running out of time, they flipped the contract to Olmstead, which had previously expressed interest in the properties, and their deposit was credited toward Olmstead’s purchase price. It’s unclear if Empire has a meaningful piece of the deal, and how that piece is structured – i.e. did the boys pull off a David Werner or did they just get out alive?

Atco’s lender, PGIM, was paid off in full as part of the deal. This summer, the family firm brought in Tribeca Investment Group (Elliott Ingerman, Bill Brodsky) & Davis Cos. as rescue pref on its 630 Third Ave office tower, as The Promote reported.