With the Manhattan rental market at record highs, even sites that were cursed to die a thousand deaths are finding resurrection. The keys seem to be: a new sponsor untainted by that bad domestic juju, creative structuring that buys precious time to figure things out, and, most importantly; a lender who believes in you.

Let’s head downtown. 👇

This week on the pod, we discuss multi’s marriage of convenience: After getting no love from the Street for being merely huge, Equity Residential & AvalonBay are considering a mega-merger. Co-host Krasne overuses “tectonic,” but it really does apply here, so we dive in deep. We then leave the public markets behind for a telenovela playing out at an old-school Miami CRE family, where Terra’s David Martin is accused of playing the part of a Bollywood villain.

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Grubb Properties is close to finalizing a ≈ $400M construction debt package on 8 Carlisle, The Promote understands, funds that should let it complete its in-progress 64-story, 462-unit tower. The debt stack here is fascinating, and we’ll get to it in a second, but first want to note that 8 Carlisle is the artist fka 111 Washington St., which for a decade and a half prior to Grubb’s involvement was one of Lower Manhattan’s biggest developmental clusterfucks – and that is saying something. It was the site of a bitter and highly public father v. son battle, w/ Richard Ohebshalom’s Pink Stone Capital suing dad Fred to block the sale of the site to a Chinese buyer for a “woefully deficient” $148M - Grubb eventually paid about $60M less than that. (We’ll get into the full history in the Insiders-only section at the end of this email – seriously dramatic stuff. 🔒 )

Grubb, a Charlotte-based multifamily-focused firm led by Clay Grubb, stepped in in fall ‘21. (Richard stayed involved – most likely via some kind of back-end promote.) The Fortress debt was right-sized to ≈ $60M, and in summer ‘23 Grubb landed a $45M bridge loan from Naftali Group. Keep in mind that this is during a time of serious rates whiplash, a nightmare scenario for anyone attempting a major ground-up project. In spring ‘24, Grubb refi’d the site through Maxim Capital, a debt fund founded by Mercury alums Brian Steiner & Adam Glick that’s been in several tasty capstacks recently. Maxim initially committed $67.5M, but to meet the rest of its immediate funding needs (for rate caps, loan extensions, etc.) Grubb had to get creative: Selling assets was one option, but Grubb was mostly looking to buy enough time ⌛ to take care of business. Since it held its assets incl. 8 Carlisle through contained funds, it was able to tap into NAV financing, according to 2 sources familiar w/ the capstack: A trio of lenders – Skylight, Axonic Capital & Greenbarn – provided a ≈$40M NAV loan. (Skylight & Greenbarn are new to The Promote Cinematic Universe™ ; Axonic has popped up as the kind of lender eating Starwood’s 🥪 in mid-market).

Meanwhile, Maxim kept the faith, and essentially played the role of a construction lender via serial bridge gap-and-extends (Insiders: See full rundown at end of email 🔒) And it’s getting ready to upsize again: Grubb is finalizing a ≈$300M sr. package from the lender, The Promote understands, and is also in talks to get a ≈$75M slice of mezz - we’re unclear on who’s stepping up w/ that. It’s also landed a takeout lender for the NAV loan, and all those funds put together will help get the project over the line.

Grubb declined to comment for this story, and Maxim didn’t respond to requests for comment by press time. Grubb’s prize, if it gets there, is significant: Manhattan median asking rents are at $5K/month, and FiDi saw the biggest increase in search inquiries on StreetEasy. Grubb is projecting low $100s/ 🦶 rent at 8 Carlisle, and it’s a fair shout – much of the area’s incoming product is office-resi conversion stuff, which just doesn’t hit the same as ground-up. 🪏

Farm-to-closing-table. Stefan Soloviev has scored a girthy $1.8B CMBS refi (BofA leading deal, loan basis: $1,060/ 🦶) of his flagship office tower 9 West 57th St. Here’s the stack, per The Promote’s bond heads 🐙

Soloviev announced that the tower, fully stabilized, is expected to be valued at $3.9B, or $2,300/ 🦶. New York’s current record holder is SL Green’s One Vandy, which at ≈ the same size was valued at $4.7B ($2,700/ 🦶 ) following a stake sale in ‘24 – the trophy office market has gotten even better since then.

The 9 West refi will retire a $1.2B mortgage, and Soloviev will pocket $526M, a terrific 🥕 after a yeoman leasing effort. Occupancy is now in the low 90s, w/ a primo roster including anchor tenant Apollo, Chanel 💄 , and Sculptor. New lease deals have come in the low $200s/ 🦶on avg., per S&P Global, though the FO for Mexican scion Gonzalo Hevia Baillères (Hermione bf) agreed to pay a record $327/ 🦶 for its top-floor space (just 5K sf, but still, bragging rights) in March.

Soloviev is the son of the late, irascible real estate titan Sheldon Solow, and an utterly fascinating character in his own right – the agricultural baron’s coming-out CRE party was the TRD forum a couple years ago, and it was an event. Soloviev had a testy r’ship w/ dad, and opted for a radically different approach to leasing when he took stewardship of the tower.

Bonus: “We’re in barracuda land.” 🦈 Revisit this great retro Times piece about Solow’s assemblage for 9 West (Overall price tag? $12M 🫢 )