Madison Ave Monopoly

Corporate turmoil can sometimes be a catalyst for real estate moves. The State Teachers Retirement System of Ohio, which has been enmeshed in infighting and a leadership shake-up, is shopping its flagship Manhattan skyscraper at 590 Madison Ave. for $1.1B, or $1,100 a foot. LVMH signed a 150K sf lease back in Sept. at the 41-story tower, which was known as the IBM Building after its former anchor tenant; IBM sold the building to Ed Minskoff & Odyssey Partners in ‘94 for $200M, who in turn brought in STRS as the money.

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Monopoly (Cont.)

Eastdil has the plum assignment, per Bloomberg, w/ usual suspects Will Silverman & Gary Phillips being joined in the saddle by head honcho Roy March 💇‍♂️. March’s r’ship w/ the building dates back to at least the late 90s, when Odyssey hired Eastdil to shop the property, a move that set off a bit of partner drama: Minority owner and managing GP Minskoff insisted that Odyssey, as minority partner, could not push for a sale, while Ohio STRS’ exec said at the time that “everything we own is for sale at the right price.” In ‘15, STRS moved to sell a minority stake of the tower at a $1.5B valuation, but then opted to refi instead. Today, the $95B AUM pension fund has a LOT of things to sort out within its ivory tower – it’s probably best to not have to worry about repositioning a Manhattan tower at a time like this.

TIL: Ed Minskoff once worked for the Reichmanns!   

Rise48 ☎️ Rise48: Rescue Me

“There's one thing I’ve learned in all my years. Sometimes you gotta say, ‘What the fuck,’ make your move." - Joel Goodson, Risky Business 

Sunbelt syndicator chutzpah is a new level of chutzpah. The cojones on some of the folks buying hundreds of millions dollars worth of garden-style apartments set around swampy swimming pools would put Manhattan titans to shame. With some poster boys being dealt w/ extreme prejudice by their lenders – GVA’s Alan Stalcup pursued for $285M in PGs comes to mind – others are determined to shape their own fates. 🌞 🥠 

Take Rise48 (Zach Haptonstall, Bikran Sandhu), which is targeting a $39M raise for a pref fund for 7 of its own deals, per investor materials viewed by The Promote. The portfolio spans just over 1,400 units in the Phoenix MSA, all purchased during the ZIRPY mid-late ‘21. Rise48 intends to use the funds – on which it wants you to know it’s not charging any fees 🤲 – to pay down $13.9M of existing loans, buy $11.9M worth of rate caps, and repay $11.6M of working capital loans.

The deck starts off grim, w/ Fed carnage slides & a collection of scary foreclosure headlines, but gains optimism as we get to the fund discussion. Rise48 says it expects to sell the portfolio in Q1 ‘27 for $349M; “gold class” investors ($50K min) would get a 14% IRR over the 2Y fund life, while “executive class” 🕴️ ($250K min) would get 18% IRR. To supplement its efforts, Rise48 enlisted a feeder fund (a primer on those nebulous vehicles here) called Timberview, run by “semi-retired orthopedic surgeon” Tyson Cobb 🦴 ; recommend watching its presentation (h/t @lpinvestor) on the pref raise (focused on 6/7 deals) for tips on “exponential net worth growth” & “skin in the game.” 🪂  

Nussbaum “Hush Money” Update: Sod Pursues Banks

This case – in which nursing-home bigwig Jacob Sod alleges that CRE attorney Mark Nussbaum took $15M of Sod’s funds to pay “hush money” 🙊 – feels like a Steve Bannon-esque “flood the zone,” situation, w/ new allegations, affidavits and ripostes filed constantly. You can carve out a day to read the whole thing here, but just a couple highlights here:

1. Sod has subpoenaed 26 banks for any docs related to the following: Nussbaum & his associated law firms, Wolf Wercberger (the defendant here), Barry Farkas, Mark Meisner (think of him as a mini Shaya Prager type), and, of course, late RE investor Mendy Steiner.
2. Nussbaum characterizes Sod’s hush money allegations as “complete nonsense and utterly false.”
3. Wercberger speculates that Sod has some “gripe” w/ Nussbaum, and that Sod obtained the restraining order against Wercberger “through deceit and misrepresentation.” That order, Wercberger adds, is “crippling” his ability to do business and costing him millions.
4. An exhibit filed by Wercberger’s attorney shows a $15M promissory note between Sod’s Crestview 360 Holdings & Georgetown Residents - we know c/o TRD that Georgetown is connected to Steiner, and the note attached here looks to be signed by Nussbaum. (See also: shtar iska)

It’s all pretty overwhelming, perhaps by design. We’ll see what else unfolds, but for now, some brighter related news: Sam Lowinger, Nussbaum’s former partner & a mean sax player, has found a new gig. He announced that he will be in-house lawyer for Yakar Partners, which is NJ nursing-home player Avery Eisenreich’s family office. 🎷   

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Barings Buys Artemis

Some big institutional news: Money manager Barings is buying Artemis Real Estate Partners ($11B AUM), in a bid to add to its CRE firepower. Per PERE, Artemis principals Deborah Harmon (sister to Newmark’s Doug Harmon btw) & Alex Gilbert will continue to run the shop. The move is part of a wave of M&A in institutional CRE – think of Ares-GLP, Blue Owl-IPI, etc – as firms engage in AUM-gobbling to compete with the big boys. Fortress co-CEO Drew McKnight put it best this past summer: “For us to compete with larger firms like Ares, Apollo and Sixth Street, we need to continue to grow assets, because if we don’t then we’ll be less relevant.” 🧧 

BH3, Capstone Close in DoBro

Just closing the loop here: The Promote reported on 1/29 that Joshua Zamir’s Capstone, aided by BH3 Management’s war chest, was buying the note on 141 Willoughby, a Downtown Brooklyn spec office tower that Savanna developed and then defaulted on. That deal (broker: Eastdil), for about $107M, closed this week, insiders confirmed. For more deets on the fascinating transaction, incl. Savanna’s cameo and the origin story of BH3, see here.

Quickies

• 🎥 The Russian mistress back channel in the Sol Goldman feud 🩰 

• Howie Lutnick taps 2 sons to run Cantor empire while he’s in the WH

• POTUS puts the kibosh on NYC’s congestion pricing 🚦 

• Lord of logistics: Prologis’ Hamid Moghadam to retire 📦️ 

• Capital stacks can vanquish even the best buildings

• An acre on the Brickell waterfront is up for grabs 

• Steve Ross wants to do Steve Ross things in Wellington, FL

• Looks like Tides’ Sean Kia made good $$ on his Brentwood mansion: In at $14.5M, out at $22M (h/t TRD)

Unquotable Quotes