“Dress for the job you want,” goes the ol’ chestnut. But what are you supposed to do when that job outgrows you?

In ‘22/23, as Newmark began upping the ante on their data-center advisory practice, they brought in Brent Mayo, a dealmaker at DH Capital, to helm that vertical’s nascent capital-markets team. DH (now a Citizens Bank joint) was widely seen as a pioneer in brokering big-ticket data-center transactions such as KKR-CyrusOne, and Newmark execs viewed bringing in Mayo as a way to gain instant street cred in a rapidly growing sector.

No one could have predicted just how rapid that growth would be. As data centers went from a sundries item on brokerage P&Ls to a core cash 🐮 , Newmark (& its peers) realized that the firm’s heaviest hitters would have to play an increasingly big role. Mayo soon went from being McCartney to Ringo – “kinda got layered a bit by everyone” is how one higher-up at Newmark put it – culminating in a desire to exit his contract. And Newmark just granted that request. 👇

This week on the pod, we dive into Sunbelt multifamily kingpin’s Scott Everett's (S2 Capital) audacious private REIT maneuver to save his distressed portfolio – an attempt coming apart in real time. It's an opportunity to discuss the Sunbelt ZIRP-fueled boom/bust, the broader syndicator reckoning, and how survival is sometimes all you can hope for. It’s then time to talk fathers & sons – a long-stalled FiDi site may now see salvation after lender Maxim Capital kept the faith in developer Grubb Properties. And finally, we unpack the real estate legacy of a “G”reat man, just-deceased media mogul Ted Turner 🤠. Plus, our “Punch List” of the newsiest industry happenings: A sextortion of Fortress founder Wes Edens; Barnett's assemblage; La Caisse’s Brooklyn 🛀; and Soloviev's $526M CMBS windfall.

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Mayo is going principal-side to DigitalBridge, the Marc Ganzi-led data-center investor in the process of being acquired by SoftBank. (Sources first confirmed Mayo’s exit to The Promote Wed., and his DBRG jump was reported by The Information Thursday.) One of his key lieutenants, Matt O’ Grady, is also exiting, per sources familiar, likely bound for a venture scouting defunct manufacturing facilities to source power 🪫 – the primary constraint in the game – for data centers.

Newmarkers are framing the departures as a natural evolution of their data-center practice, which today for all intents & purposes is spearheaded by the firm’s alpha debt guy, Jordy Roeschlaub, w/ key roles played by Andrew Warin, Adam Doneger 🥍 & Josh King. Conversations w/ 3 different Newmark rainmakers surfaced the same word – “athletes” – to describe the changing talent equation. “This wasn’t a sector of reverence or merit [previously],” said one. “All the best athletes in data centers now – at Blackstone, TPG, Ares – were doing different stuff 2 years ago.”

While who made what happen in the division is always going to be up for debate & revisionist history, what is unequivocal not just at Newmark but across brokerage is how much of a lifeblood data centers have become. CBRE’s Bob Sulentic recently cited the vertical as a core reason earnings were up 95% YoY, and Eastdil’s new CEO Mike VK highlighted its centrality in his first public presentation to Savills investors. (BTW our pod on that M&A is a must-listen). Newmark has scored some of the biggest assignments in the financing space, from a $7B loan for Blue Owl/Crusoe’s venture in Abilene, TX to a $4B Blue Owk/Chirisa/Machine JV in Lancaster, PA. As the assignments and commission checks (this has gotta be a 9-figure annual fee stream for NMRK by now) keep getting fatter, firms both within and outside brokerage will keep reshuffling their talent decks to keep pace. Which means: Someone’s getting framemogged. 💾

Editor’s Note: Capstacks today are as weird as they’ve been in a long time. The Promote has been hearing plenty about how credit is increasingly masquerading as equity (See also: Paper Chasers on Top), while equity continues to get cold feet. It’s a crucial dynamic to understand, and to get a clearer picture, we turn today to 2 of our go-to equity whisperers, Chinmay Bhatt & Noam Franklin. The Northmarq dealmakers have racked up the air miles and Bonvoy points on the road this year, talking to multifamily capital providers of all stripes. Here’s their dispatch. - HS

By Chinmay Bhatt & Noam Franklin

After close to 80,000 miles in the air this year, overindulging with clients at way too many overpriced steakhouses, endless calls with foreign capital across 11 time zones and a conference schedule stacked tighter than a CMBS waterfall, here’s what we’ve concluded about the apartment-investing capstack today: Equity, once the bold first-mover in dealmaking, is camped on the sidelines, while credit providers have surged forward to fill the void. What results is a market where debt is doing the work equity used to do, reshaping how multifamily deals come together.

Being walloped by 2Y of defaults, repricing, refinancing pain, and softening rent growth across the Sunbelt has made allocators cautious to a fault. Pensions, SWFs, and value-add apartment funds are pencils-down on most opportunities. They’re demanding cap rates and IRRs that do not reflect the state of today’s market. Open-end core funds with heavy apartment exposure continue to manage redemption queues. When equity does show up, it’s often simply to ask: “Can I quote pref for this deal?” Apartment developers and owners have spent the past year chasing LPs who routinely pass – the risk of excuses includes denominator effects, oversupply in markets like Austin and Phoenix, or simply a preference to hang tight another quarter.

Credit, meanwhile, has become the swashbuckling seat at the multifamily table. Agency lenders, debt funds, mortgage REITs, and specialty apartment lenders have raised tens of billions of dollars specifically targeting the cautious-equity gap. Fannie & Freddie continue to provide reliable senior debt, but the real innovation is happening above them. Lenders are quoting 85%+ leverage on condo construction projects in South Florida, an asset class and market that traditionally commanded far more conservative proceeds. Private-credit providers are also structuring pref, mezz pieces, stretch sr. facilities and rescue capital that effectively recapitalizes troubled syndications without forcing a sale at the bottom.

Promote Insiders: Read on for the rest at the end of this email 🔒 👇

Give the lobbyists a raise: A provision that would’ve nuked the BTR industry by forcing operators to sell properties within 7Y of ownership has been struck from the modified 21st Century Road to Housing Act. House lawmakers reached a bipartisan deal Wednesday on language that maintains restrictions on institutional investors’ SFR purchases, but significantly waters down the Senate version, per Politico. The definition of SFHs no longer includes manufactured homes (a la Brookfield-YES Communities $10B AUM Gobble) or homes that’ve been renovated for sale. And crucially, the House Bill does not contain the forced-sale provision, the thing that the apartment industry was loudly campaigning against, saying it would disincentivize investment in the sector. Under this version, BTR operators are free to go about their acquisitions & development business, w/o the exit lanes being closed. A vote on the bill is expected next week.