Programming note: We’ve been told that readers are missing the Wednesday editions and thought we were taking impromptu vacations. We assure you that even if we were partying w/ Aby on St. Barths, you’d have The Promote in your inbox. HOWEVER: Since mid-Oct., Wednesday eds. have been exclusive to members of The Promote Insider, our premium tier – this is why you might not be getting them. You should correct that travesty by signing up here. There’s a 2-week free trial, so pretty good risk-adjusted return to be had.

This week, insiders dove deep into a dispute that has NYC’s multi machers spooked. The AG/DHCR’s crackdown on Peak Capital (Alex Rabin, David Gomez) over allegedly shady use of the Sub-Rehab rent-stabilization exemption reveals a playbook said to be SOP for many firms post the ‘19 rent reforms. Peak and its ilk (think Aperture Holdings, Davean Holdings, etc.) would do the heavy lifting, often w/ a 🐳 of an end buyer in mind: Greenbrook/Carlyle. Is it a good-faith attempt to weed out abuses of the system? Or is it, as Peak’s trade group argues, a retroactive regulatory witch hunt? 🧙‍♀ Sign up for premium and read it here.

Joel Landau didn’t pass the SNF test.

The Allure Group founder & Satmar pezzonovante ™ had taken a stake in distressed SNF giant Genesis (through a $50M debt investment via ReGen Healthcare – lots of fun 🐰 🕳 here) and hoped to take control of the whole joint via a stalking-horse 🐴 bid in the bankruptcy auction. At the top of this month, Landau’s Pinta Capital declared that after it more than 2X’d the cash portion of its bid to stave off rivals, it had prevailed. The prize was significant: 175 SNF facilities in an industry that is a money-printer for those that know how to play the game. Perhaps even more importantly, the Landau-led bid would have put an end to $1.6B in legal claims, much of that over negligence (wrongful deaths, etc.). It was an etch-a-sketch of sorts, what one attorney for families of victims called “about as fair as a Venezuelan election.” 🍌

But a federal bankruptcy judge has now poured cold water on the cholent 🍲

On Thursday, Judge Stacey Jernigan declined to bless the liability releases for Genesis insiders, and ordered a do-over of the auction, this time to be run by a banker for the creditors, rather than Genesis insiders. Landau’s play had come under heavy criticism, both from his rivals and from pols like Sen. Elizabeth Warren. That pressure played a role; Jernigan acknowledged the “noise” around the case and has requested a federal bankruptcy watchdog to sit in on the new process. The judge also called out Landau for being MIA: “There’s no way I can approve these releases without him [Landau] on the witness stand,” she said.

This is the moment Jacob Sod has been waiting for 💪

This week on the pod, we look back at the skyline-shaping impact of 2 starchitects who’ve just left us – Robert A.M. Stern and Frank Gehry – and then jump into a broader discussion about the pros & cons of name-brand architects. We break down the industrial deal of the year, EQT’s 9M sf sale to AUM-Gobbler ™ Artemis. And we have an exclusive tick-tock of a hotel megadeal in San Francisco, Newbond & Conversant's heist of 3,000 rooms in one fell swoop – it's a great window into what it takes to get a distressed CMBS trade across the finish line.

Listen on Spotify here, YouTube here or Apple Podcasts here. Brands: To get in front of our obsessed audience of CRE insiders, reach out here.

The nursing-home bigwig (and key character, separately, in the Mark Nussbaum escrow mess, more on that later) is the $ behind a rival bid for Genesis. Crucially, that bid, made together w/ Integro’s Rowan Farber, includes a $260M cash component that allows the Genesis estate to pursue claims against insiders, per WSJ’s review of court filings. (Stands to reason that Landau, as a Genesis insider, would not allow for this in his bid – the Genesis board is (or has prev been) stacked w/ Landau’s people, incl. Allure COO Melissa Powell & Pinta MD David Harrington) Genesis’ restructuring officer described the Sod-Farber bid (made under Genie 3 🧞 ) as having “more uncertainty and more downside, but potentially more upside.” 🎱 Per The Promote’s heimish sources – and, as we’ve chronicled, it’s a small community of key players – Sod has been maniacally focused on the Genesis auction in recent weeks, sensing an opportunity to unseat Landau. His Genie has continually been sweetening its bid, w/ sources telling the Boston Globe the final bid was north of $1B, or $20M more than Landau’s. Let’s see how Round 2 of the auction goes: The judge will allow Olumie Capital, which sources said is a holdco. led by Boro Park’s Isaac Perlstein (also associated w/ Prestige Healthcare & Everest Management), to participate; Olumie’s $1.3B bid was previously excluded from proceedings.

Mum has instilled in me the power of manifestation, so I’ll say: I NEED an Odd Lots episode on SNFs – a fascinating, heavily levered, deeply insular world only made possible by regulatory arb. Tracy & Joe – if you’re reading this, let’s make it happen 🛀

“You never actually own a Patek Philippe,” is one of the great lines in modern advertising. But the watchmaker meant it to evoke stewardship and continuity, as evidenced by what follows it: “you merely look after it for the next generation." That is, of course, unless you’re a CRE dealmaker indicted for grand larceny and have to sell it to begin paying back creditors.

Mark Nussbaum, a key node in the heimish CRE ecosystem, did some serious name-dropping in new court filings: an exhaustive list of his shuttered law firm’s creditors & debtors. Total O/S debt: $296M When The Promote first posted the list Wed. night, it set off an Epstein files-type scramble, w/ players x the city, Brooklyn and 08701 scouring the list to see who was named. Among the notables:
1) Jacob Sod 👆, who’s still owed $14.25M
2) Sheldon Zafir, a lad of Lakewood who sources said was a repeat lender to the late Mendy Steiner; Steiner’s death by suicide in Jan. is part of what bought this massive alleged fraud to light. Zafir is owed a staggering $149M, per the filings
3) Mike Silber, brother to convicted mortgage fraudster Moshe Silber i.e. the Pied Piper of Monsey, is owed $2.25M
4) Steiner OWES $306M

And that’s not all: A new lawsuit filed by the court-appointed assignee for Nussbaum’s law firms alleges that Steiner-run cos. (Aven Realty & Real Green Management) orchestrated a massive Ponzi scheme via Nussbaum-controlled escrow accts. Wish we had more room – perhaps Monday – but basically:
1) Clients deposited monies into Nussbaum's IOLA account as "show capital” for Steiner’s CRE deals; much of that $381M was misappropriated to Steiner
2) Steiner also pitched fugazi JVs on properties he claimed to be buying.

Out of the $381M wired to the escrow accounts, $51.6M was returned to keep the con game going. There’s about $329M that never returned, per the lawsuit.

And now, w/ Steiner gone, how can it?

Talk about redemption through real estate: the Archdiocese of New York is looking to pay out $300M+ to victims of clergy sex abuse, and is tapping its vast property holdings to come up w/ the funds. It’s already sold its former First Ave HQ for $103M to Vanbarton for an office-resi job. Now, it’s selling the fee at the Lotte New York Palace to the hotel operator for $490M, per CO. The sexual abuse of minors “has brought shame upon our Church,” Cardinal Dolan said in a letter this week. “Yet, as our faith teaches us, light will always conquer darkness.”

The Lotte property at 455 Madison has quite the colorful backstory. Insiders, read on: