“Dream no small dreams,” Goethe wrote, “for they have no power to move the hearts of men.” If he had taken a meet with Steve Ross, he might have tacked on a sentence: “For they don’t allow you to do obscenely creative things with the capital stack.”

What Related has been pulling off at Hudson Yards has been a subject of media fascination for nearly 2 decades, spawning hundreds of major newspaper and trade press articles and even cameos on HBO prestige TV. America’s largest-ever real estate project, a neighborhood built out of nothing on Manhattan’s Far West Side, a city within a city. But for CRE fiends, the enchantment has always been in the structuring that allowed Related to do what it did: the capstack jiu-jitsu, the politicking, the negotiation finessing, and the partnerships it struck to realize such a mammoth undertaking while continuously taking chips off the table. And that’s what we break down today.

In a special episode of The Promote Podcast, we dive deep into Related’s de-risking playbook at the $25B, 18M sf megaproject. We riff on how Ross’ near-ruin during the S&L crisis shaped his philosophy, how his early affordable housing bets became ballast for his future development moonshots, and how he was obsessed with making Related an institution w/ a balance sheet that could weather market cycles. Many big developers describe themselves as deal junkies, forever chasing the high of the transaction. Ross (and Blau), in contrast, focused on building the machine. And Related brought that full vision to bear at HY, tapping every single source of financing under the 🌞 to capitalize the project and striking scarcely believable favorable deals ($2B PILOT, 5Y free rent, severable ground leases, etc. etc.) w/ public stakeholders.

Listen on Spotify here, YouTube here or Apple Podcasts here. A shout-out to our sponsor for this episode, Vesto - learn more about how it gives CRE players a single, clear point of access for all their bank accounts by going to vesto.com

Merchants Bank of Indiana, a lender of choice for convicted mortgage fraudsters Moshe Silber & Aron Puretz, explicitly cited fraud as a factor in its upping credit loss provisions by 432%, or $43.1M. Net income for Q2 fell 50% YoY as a result. COO Michael Dunlap said the lender had taken steps to “address our asset quality issues,” and now has $418M in loans marked as substandard, compared to $324M at the end of March.

The short sellers at Ningi Research must be smiling; in Oct., Ningi had released a report 👆 accusing Merchants of growing its loan book by dealing w/ “mortgage fraudsters, state-barred real estate investors, and negligent landlords.” It cited Puretz, Syracuse landlord Troy Green and nursing-home operator Sam Goldner (Goldner Capital Management). The Promote has always had a fondness for poetry in short seller takedowns, and Ningi doesn’t disappoint 👇

“MBIN is trading on the wholesome public image as small-town heartland America’s lender of choice – the friendly local bank helping Jane and Jim to live their dream of picket fences and apple pies on window sills. This rosy-cheeked Midwestern number has enabled Merchants to appear different to, to look better than comparable banks, dogged down by their dangerous exposure to commercial real estate in challenging macroeconomic conditions.” 😊 🍎

Jacob Sod’s multi-front war to get back the $15M he alleges Mark Nussbaum owes him continues. The nursing home investor appealed a judge’s decision to dismiss a lawsuit Sod filed against Wolf Wercberger in which Sod alleged Nussbaum had made “hush money” payments to Wercberger. Separately, Sod is also moving to stymie Nussbaum’s bankruptcy alternative, a process known as Assignment for the Benefit of Creditors (ABC). Sod filed a memo opposing the ABC, saying that it encouraged a lack of transparency, was rife with conflicts of interest, and that a provision to have creditors go through mandatory arbitration in rabbinical court would keep discussions out of the public eye. An ABC would also, Sod argues, interfere with the ongoing criminal restitution process that Nussbaum is going through. He’s pushing the court to make Nussbaum go through a formal bankruptcy process instead.

Nussbaum, a former principal of shuttered law firm Nussbaum & Lowinger 🎷, was a go-to fixer for the Five Towns, Brooklyn and Lakewood crew of CRE investors, working on everything from closings to raising show capital to structuring partnerships. In May, he was charged w/ grand larceny.

Side note: Nussbaum is being repped in criminal proceedings by law firm Agnifilo Intrater, whose clients include Diddy. This is NOT CRE related, but you should check out this electric interview w/ Marc Agnifilo – he met his wife because of a machete fight outside a bagel store in NYC.

Is the deal to rescue Nathan Berman’s 180 Water St. a recap, or is it a fee simple purchase? Depends which buyer you ask. In May, Kevin Chisholm’s 60 Guilders & the Brothers Mamrout (Alen & Joe) of Sentry Realty came into the troubled 573-unit building at a sharply discounted valuation of ≈ $335M, reportedly for a 50% stake. The deal has just closed, but it’s a bit murky what the final state of play is. 60 Guilders framed it as a “fee simple purchase,” for $346M (see above screenshot) but Sentry framed it as a recap and declined to put out a number. 60 G has since modified its post and removed the words “fee simple.” 🔍 🛟

“The world has our hands, but our soul belongs to Someone Else.” - Abraham Joshua Heschel, The Sabbath

Wesley LePatner was in the lobby of Blackstone HQ on Monday evening, about to step out to meet a colleague for a drink. In walked a gunman armed with an M4, allegedly angry at the NFL, another tenant at the Rudin Management-owned 345 Park. LePatner attempted to take cover behind a pillar, but was shot and killed. Lost in yet another act of senseless violence that has become almost routine across our country. (The gunman also killed an off-duty cop, a security guard, and Rudin employee Julia Hyman, before shooting himself.)

It is hard to overstate the degree of difficulty to get to where LePatner did in her career. She was chief exec of Blackstone’s individual investor-focused BREIT, a challenged vehicle where she assumed the top job in January. She also oversaw the firm’s Core+ real estate, a massive dual responsibility at a $300B+ property platform that put her among the handful of women at the very top of commercial real estate. If you know anything about the worlds of banking and CRE, you know that getting to that perch at BX requires a cartoonish level of talent & tenacity. Doing it as a young woman, and as a mother of two, is exponentially harder. It’s worth reading this obit by WSJ’s Miriam Gottfried, someone who’s long covered Blackstone, to get a sense of both the outsized career and the human being.

And she was just 43. It's hard to find the right words here – an extraordinary talent gone in her prime, with so much more to give. Thinking of everyone at BX, the CRE community at large, and of course, Wesley's family. 🙏