Lenders are officially shopping one of the totems of the New York skyline, after a long battle by Scott Rechler’s RXR to hold on: The Helmsley Building @ 230 Park Avenue is up for grabs, according to marketing materials from Newmark viewed by The Promote. Wading into the skyscraper’s distressed capstack is a good vantage point from which to understand today’s market, particularly how the canniest GPs can create positive fundraising narratives even as many of their buildings are in the soup.👇

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RXR had defaulted on the $670M CMBS debt in late ‘23. When Berkadia was the servicer on the debt, RXR was able to do its thing, buying some time via a forbearance agreement and plotting a partial office-resi conversion of the 1.4M sf joint. But as the kids say, there was a vibe shift in summer ‘24, when SL Green’s Green Loan Services (has quietly grown into one of the biggest SASB servicers in the country) stepped in: By that Dec., Green Loan had moved to foreclose on the tower on behalf of bondholders, though RXR continued to try & work things out. Apart from the CMBS, there was a $125M slug of mezz held by Brookfield & Morgan Stanley; a recap, per deal insiders, would look to clean up that capstack.

A buyer, whether of a full or partial interest, would have their work cut out for them: The tower was appraised in fall ‘24 at just $770M (≈$550/ 🦶 ), compared to RXR’s $1.2B (≈$850/ 🦶) purchase price in ‘15. At the top of this year, its vacancy rate was 36%, per CoStar data. Still, it has a couple things going for it: It’s located in one of the tightest office submarkets in the country; and it’s the freakin’ Helmsley Building. Once its zombie status is resolved, it should be able to score more tenants.

A note on RXR: It seems deeply undercovered how many wipeouts it’s had of late. Rechler is preternaturally good at creating narratives around a thesis (Project Kodak 🎞 , Crossing the Chasm, etc.) and finding new deep-pocketed partners (Baupost, Rajeev Misra’s One IM) to forge ahead with on recaps (Listen: RXR’s OPM Masterclass), creating new lucrative fee streams for his firm in the process. But the original LPs, on this, on 5 Times Square, on Starrett-Lehigh, on 61 Broadway, and others, likely get zeroed out.

“Finish up them taters. I'm gonna go fondle my sweaters.” Wet Hot American Summer

The Israeli bond market has long been the land of milk & honey for American real estate buccaneers, who seek out TASE financing as a cheaper alternative to mezz. The vehicle, which comes w/ the disclosures & headaches of being a public co., has a patchy track record for bondholders, who’ve gotten burned by the likes of Yoel Goldman’s All Year, Boaz Gilad’s Brookland, even Starwood. But we may now be staring at the speediest raise-and-implode yet: a summer-camp empire led by the Brothers Shabsels (David & Michael), filed for Ch. 11 bankruptcy Thursday, listing $500M+ in liabilities, per Bloomberg. This is just 6 months after the brothers’ holdco., Simad, raised $195M on the TASE (Here’s the year-end ‘25 appraisal of the camp portfolio if you’re curious.)

In late May, Simad reported that it had missed its payment to bondholders, per Israeli business publication Globes, and disclosed a $34M transfer to entities controlled by the Shabsels 👏 The firm’s audit committee demanded a return of the funds (+ interest), but were told that would not be possible 🤷 Simad further disclosed that the Shabsels also took on personal loans “secured on the assets and cash flows of the company’s subsidiaries," in other words, double-pledging 👬 This is not the first time the Shabsels have experimented w/ high-octane financings; controlling shareholders looked to have allowed lenders to debit Simad’s accounts, per TRD, a move that seems to suggest accounts receivable financing. Simad is now looking to appoint Asaf Ravid as chief restructuring officer - the same guy who had to decipher the All Year mess. (If you’re interested in the role a CRO plays in the CRE ecosystem, check out The Promote’s snapshot of the prolific Ephraim Diamond: “It’s kind of like, l’havdil, when you read a gemara or a Rishon,” Diamond said, and you’re trying to be madayek, very exact.”) ⛺

I’m reading Graydon Carter’s spicy memoir about the heyday of the glossy magazine business (he was the longtime editor of Vanity Fair at a time it meant something). In it, he recounts how surprised he was that a party he threw for the great American auteur Billy Wilder (Double Indemnity, Some Like it Hot) was so poorly attended.

For some reason, reading news of Paul Massey’s CRE brokerage B6 folding into Horvath & Tremblay in a freakin’ press release struck a similar chord w/ me. Massey was one-half of Massey Knakal Realty Services, the New York I-sales powerhouse that pioneered the territory system and ruled the mid-market roost before Massey & Bob Knakal sold it to Cushman for a reported ≈ $100M. That was in ‘14, and though Knakal’s path since has been far better chronicled, Massey has been relegated to relative obscurity, a result of challenges both professional and personal:

• ‘16: Took a hiatus from Cushman to run for NYC mayor. There was chatter that consultants had fed him false hope so they could keep milking the campaign cow: “No one takes me for a ride,” he said at the time.
• ‘18: Left Cushman to start B6 ( “Building by Building, Block by Block”). Never found momentum.
• ‘23: The bills had piled up: Massey personally owed ≈$2M in back taxes, had a mountain of Amex debt, and was behind on B6’s rent payments
• Now: Folds into Horvath – to be clear, this isn’t a sale, because there isn’t much to sell. But it gives Massey & B6’s 20 employees a home, and time to figure things out.

My take: Massey is a thorough gentleman and a widely respected figure in the business. He was vital to Massey Knakal’s success, and a big part of why its alum list is a particularly distinguished and entrepreneurial one, w/ everyone from vets Shimon Shkury (Ariel) to Ofer Cohen (TerraCRG, Ailanthus) to young guns on the rampage like Morris Betesh (Arrow) starting real shops. But Massey is an operations guy, and what made Massey Knakal survive – hell, what makes any brokerage survive – is a sales engine: Someone like Knakal will always make a living, because they can produce their way through a storm and hire someone to build process around them. (Though Knakal’s new firm was spun as AI-focused and the trades ate it up, that was all hokum – it is an old-school dealmaking shop focused on what Knakal does best, which is selling buildings/sites.) But an ops guy, no matter how gifted or experienced, needs a rainmaker to work with. And Massey never found his again. 🫡