After a judge declined to grant the Mamdani administration’s request for a stay on the Pinnacle portfolio bankruptcy auction, the inevitable went down: Zohar Levy’s Summit Properties won the auction as the stalking- 🐴 bidder.

The deal, for 93 NYC buildings and 5K+ rent-stabilized units, heads to the judge’s desk Thursday for final approval. We’ve covered its various twists & turns across several recent eds. – see here and a deeper dive into the political side for Promote Insiders here, and now have a tick-tock of the highlights live on YouTube.

One thing we wanted to highlight today is Flagstar’s Come to Jesus moment: Summit said in court filings Friday that the debt load on the portfolio would be slashed by more than $275M (≈ 45% of the existing debt), and that its new debt (lender undisclosed so far) would be cheaper than the current debt. This means heavy losses for Flagstar on this deal, but is also indicative of an ongoing trend at the bank, per market insiders: Flagstar is looking across its vast NYC RS book and going through the painful process of marking-to-market 👇

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In recent weeks, owners of RS buildings across New York City have been contacted by the bank about their debt, according to lenders who’ve heard from them. For loans in good standing, the bank is offering to sell owners their own debt at a healthy discount – let’s say 20-30% below the O/S balance. The move is part of a push by Flagstar (the artist fka NYCB) to reduce its exposure to what’s seen as one of the country’s trickiest asset classes; the bank has more broadly been selling off NYC multi loans in bulk to private-credit players.

Now, you might think that for an owner, buying back their own debt at a nice discount on a performing portfolio is a no-brainer. And yet, if an owner goes out to finance this note purchase, the “V” in LTV has fallen rather significantly, (as we like to say on the pod: “The V is fungible”) so they can’t really get all the funds to get it done. An interesting stalemate that will likely sort itself out in coming months…

When you’re walking down Collins Ave. close to midnight and you see a gaggle of CRE dealmakers leaving CVS with Gatorades, you know that it’s CREFC season. The annual CRE finance confab kicked off in exuberant fashion last night, with a dozen-plus parties (and some clandestine ones) all around South Beach. Spotted over the night: Newmark CEO Barry Gosin, basking in a monster lending year; Crescent Heights’ Bruce Menin; Morris Betesh, who keeps adding arrows to his quiver; CBRE mid-market dealmakers Judah 🔨 & Shamir Seidman; Meridian’s Abe Hirsch; Walker’s Dustin Stolly, fresh off a mammoth (and fascinating) closing for 111 Wall; Green Pine’s Ronnie Levine; Avison’s James Nelson and many others. Vast majority of the chatter was about revving up the dealmaking engine; heard v few laments about a slow market etc. – “it’s time to transact” was the defining vibe. Lots of 💌 for The Promote (esp. the pod) among the crowd. We’re off to eat some Rao’s meatballs at Jay Neveloff’s thing this afternoon 🧆

We’ve extensively chronicled the widespread distress at the empire of the Brothers Chetrit, who are dealing w/ the triple-whammy of foreclosures, criminal indictments and PG pursuits. The latest comes from Columbus Square in Manhattan, where special servicer Mount Street has moved to foreclose on a retail portfolio (at the base of several resi towers) owned by Chetrit Group & partner Stellar Management. Mount St. alleges default on $361M in debt, per PincusCo. The debt has long been dancing through workouts & special servicing. The ‘14 CMBS docs indicate that the “nonrecourse carve-out guarantors are Jacob Chetrit and Laurence Gluck.” Both, of course, have since passed away.

In May, the Chetrits’ lawyer, Leo Jacobs, when asked why his clients were suddenly defaulting across the board, said “the market has invariably turned.” Replied the judge: “I don’t hear any real defense except that ‘We just can’t pay because we no longer have a lot of money.’” 👩‍⚖

Major players in the SFR industry are licking their wounds after POTUS declared his intent to ban institutional investors from the field. “People live in homes, not corporations,” Trump said Wednesday, adding that he’d look to Congress to codify a ban. Shares of Invitation Homes and AMH took a hit upon the news, per WSJ, as did those of Blackstone, which helped finance Invitation Homes at the outset and now owns Tricon after a $3.5B take-private in ‘24. A Blackstone rep reiterated the stat that it busts out whenever it catches strays in the SFR debate: BX’s single-family portfolio is just 2% of its CRE AUM. (Blackstone heads will note that the firm has a similar stat on the ready for any stories about hits to its office holdings.)

Treasury Sec Scott Bessent added that the administration hadn’t yet decided how big is too big. “Is it a dozen homes? Is it two dozen?” Bessent said. “What makes you an aggregator?” The add’l twist here is that many of the progenitors of the modern SFR industry are big Trump guys – BX’s Stephen Schwarzman, Tom Barrack (Colony) and B. Wayne Hughes (AMH) among them.