The meltdown of auto-parts maker First Brands is being viewed on Wall St. as the canary in the coal mine for private credit. Qs are being asked about the sketchy accounting and “byzantine off-balance sheet financing structures” that contributed to its collapse, and whether the failures here could reveal broader weaknesses in the burgeoning industry – an industry that’s playing an increasingly alpha role in CRE lending too, of course.

The overall First Brands story is beyond the purview of The Promote - go read the FT & WSJ’s agenda-setting coverage here & here. However, there’s a lil’ snippet that’s right in the pocket for us 👇

🚨 A couple of meaty changes at The Promote:

Founding Members pay $240/Y - that’s $20/month – w/ a 2Y rate lock. If this sounds tasty, please sign up here.

One of the parties caught up in the thick of the scandal is UBS O’ Connor, a hedge-fund unit of the mighty Swiss bank. Cantor Fitzgerald (fmr. Howie Lutnick joint, now run by his sons) struck a deal to buy the unit this spring, but now wants to revisit terms. We peeked if UBS O’ Connor had ever had any dealings w/ our band of brothers, and voila:

In June ‘22, CRE investor Moshe Silber-controlled CBRM had borrowed $20M (at SOFR + 9.75%) from UBS O’ Connor, court docs show. At the time, Silber was flush, disclosing a $600M+ net worth and over $1.3B in assets. In ‘24, Silber defaulted, the lender’s administrative agent sold the NPL, the new owner moved to foreclose, but CBRM filed for bankruptcy to stave off the foreclosure. Along the way, Silber was convicted of mortgage fraud, filed for personal bankruptcy and big chunks of his portfolio were transferred to to CRE investor A. David Lynd.

There is ALWAYS a real estate angle 😉

WK: “[Greene] tried to do this and hasn't really found much purchase. And it sort of shows, Jeff Greene is incredibly wealthy and made a ton of money. Super successful….”
HS: “But he ain’t Steve Ross.”
WK: “He ain’t Steve Ross.” - The Promote Podcast, Sept. 2025

We did call this one. A special episode of the pod last month looking at how the 🐐st of 🐐, Steve Ross, was building his (self-funded 😲 ) empire in West Palm Beach, employing his signature playbook of big-ticket development, loud philanthropy & political machering. We contrasted his success w/ that of another mogul in the area, Jeff Greene, who’s been stymied by the city in his quest to build a 76-unit luxe condo designed by Herzog & de Mueron. Greene is now suing the city, claiming it’s slow-rolling him b/c he spoke up against the city’s land sale to Ross, which he criticized as a sweetheart deal – 55 acres for $6.6M, or $120K/acre 🫡

“It doesn’t look very kosher,” Greene told TRD of the Ross deal. “This mayor is just using his power to go after me.” Those you were once tight w/ can hurt you more than strangers, and that seems to be the case here for Greene. Discussing what he sees as Mayor Keith James’ retaliatory campaign – the city wants to downzone his towers to 111 feet tall, down from 350 – against him, he said: “He was at my son’s bar mitzvah, he’s been to my home in the Hamptons.” This is the same mayor that Ross has courted w/ full gusto, once telling him: “I want you to know, Mr. Mayor, that I am spending money in your city like a drunken sailor.” 🧑‍✈

Editor’s Note: This unvarnished tell-all on what it really takes to be a real estate GP comes c/o Will Krasne, a CRE investor and silver-tongued raconteur that many of you know as the better half of The Promote Podcast. For months, I’ve watched Will battle through a host of scarcely believable challenges (including a tornado!) as he put together one of the most important deals of his career so far. Now that he’s out the other side ( 🤞) I thought it’d be really instructive for GPs (both active and aspiring) if he wrote an honest account of his experience.

We’re thrilled to share his first piece, a teaser of the kind of stuff you can expect from The Promote’s premium tier. Make sure you click “read entire message” if it gets clipped by your email thing - HS

By Will Krasne

Hang around CRE long enough, in any capacity, and you’ll hear it: “I want to buy my own deals.” A transaction attorney will know what the Sponsor made on a settlement sheet. PE associates will peek how much promote their fund paid their operating partner. Inevitably, they’ll all want to do that too. Here’s what it really takes.

You hemorrhage weeks and months driving markets, touring deals, talking to brokers and owners, and getting outbid. You develop an intuition about which motels in your strike zone actually have clean sheets. You miss your kid’s bedtimes and bathtimes. You incur significant brain damage that you are, in essence, paying to experience. You worry that you will never buy anything and will need to go back and get a job. Then, you find it.

You tie up the deal, but you don’t have the money. All good, you’ve worked in real estate a long time and know wealthy people who think you’re smart and will fund your deal. Turns out, they won’t.

“Our house view is….”
“Our conservative underwriting means the numbers don’t pencil”
“We aren’t a believer in the market”. 

Somehow, you find the money and you close. But you’re wildly undercapitalized.

You get to do the thing you’re best at, leasing. And you get great traction right away. All the pre-closing, diligence, and fundraising struggles are forgotten. You are the smartest investor alive. You visualize how this case study will sparkle on your next raise pitch. You begin to wonder, why is it taking so long to get a counter on that LOI? Your broker says he can’t get their broker on the phone. Then you can’t get your broker on the phone. Your capital partner is getting antsy – didn’t you say there was tons of demand in this size range? And what happened to that incredible leasing traction?

Your debt service is getting torched. You begin to really hate the 7^th of the month (savvy operator that you are, you always push to have interest expense pull on the last day possible with your lender). You get bills and wonder why it costs so much to maintain a stormwater basin when it barely rains. You wake up one morning to 15 missed calls from your alarm company and think to yourself, that isn’t good. This thought is confirmed when you see that the building was hit by a tornado. 🌪️

You spend five months sparring with insurance to get paid out on your policy. As you now learn firsthand, it’s also extremely expensive to insure a vacant building. Several groups quote the rebuild. Your favorite group, the one that you’ve done three jobs with, is 250% higher than the other two bids.

Your broker finds your number again. Would you sell the building and transfer the insurance proceeds to the buyer? It’s at a premium to your basis and would give you a 1.5x multiple in 1.5 years, so yes! You start to think, if you just buy great real estate cheaply enough, you can get hit by a tornado and still be fine. You begin to wonder, why is it taking so long to get a counter on that LOI? Your broker says he can’t get their broker on the phone. Then you can’t get your broker on the phone. The offer evaporates. You are in default of your DSCR loan covenant. You keep paying the debt service. Thankfully, your lender is cool – if they wanted, they could pull this all down with one phone call.

Out of nowhere, you get an LOI from a dream tenant you talked to once 18 months ago. “We’ve had lots of demand, but it is,” you say, when asked if it’s still available. The tenant has downsized its space requirement and needs extra parking, which means you’ll have to turn the tornado-ravaged piece of the property into a customer parking lot and slash your rentable space by 20%. But that will be more than made up by the rent premium. 

You spend four months negotiating the LOI. You panic when they go dark for four weeks in the middle. You sign the LOI. You begin to rebuild and spend money. Your cool lender gets acquired. The acquiring lender is not cool. You are the largest NPL on their books and the bank’s management asks for a sit-down when the deal closes. 

You spend another five months negotiating the lease while the tenant works through corporate approvals. Their lawyer barely knows what state the deal is in. You burn tens of thousands of dollars in legal fees, but eventually you get there on the language, and the lease is approved. You’ve done the math ad nauseum and know that with this rent, and this credit, the deal will sell very tight. You’ll now make a 2.5x return in three years, despite getting hit by a tornado. You once again believe that you are the smartest investor alive. 

You wait for the Docusign link, happy because this will get the new, less cool lender off your back. But the Tenant, a tech company, requires wet signatures. You spend $47 overnighting a signature package. You ask their lawyer where it is, and are flummoxed when she says that she isn’t responsible for signatures but will try to find out who is. You have still not heard who is responsible.

So, you want to buy your own deals? - WK