"An Aleppine can sell even a dried donkey skin." - Local Syrian proverb

Let’s rewind two centuries and head to Aleppo, the soul of the Silk Road. A local family, the Safras, rose to prominence via currency trading and staking 🐫 caravans, steadily growing its presence into 2 other Silk Road hotspots, Alexandria & Constantinople. By the early 1900s a branch of the Safra family had put down roots in Beirut, with patriarch Jacob carving out a lucrative niche catering to the Sephardic community in that cosmopolitan city. Next came São Paulo, where Jacob and his sons ramped up the dealmaking and established their lender (Banco Safra) as the go-to investment bank for Brazil’s well-heeled. And on and on it went, w/ the family eventually going on to control a $25B global financial empire – banks, agriculture, and, of course, real estate. The Safras – given Sephardic naming customs, it is incredibly hard to keep track of which arm of the feuding family is doing what – have popped up as investors on a number of high-profile deals, including the GM Building. And now, a Safra scion has made his move on Sutton Place.

Managing a lot of bank accounts? Most CRE players find tracking cash across banks and project LLCs to be a huge pain… Enter Vesto. With real-time balances, transactions, and cash flow monitoring, Vesto has helped over 100 CRE firms connect and control all their business bank accounts from a single, intuitive dashboard. Check out how Vesto can help you here.

Edmond M. Safra is backing Vanbarton’s move to convert the Archdiocese of New York’s HQ into a 420-unit rental. Vanbarton’s involvement in 1011 First Ave. was made public in October, but the Safra connection has just emerged in disclosures that nonprofits/religious institutions must make when selling assets, according to a review of court records by PincusCo. Edmond’s doing the deal through a vehicle called AVRS, which he co-founded w/ QIA alum Adnane Mousannif & Brazilian tech investor Patrick de Picciotto. The First Ave. property, which the partners bought for $103M ($260/ 🦶), is one of several office-resi projects by Vanbarton and part of a wave of such conversions in NYC – most notably the Pfizer HQ, which recently landed a record $720M financing.

The displacement in the Manhattan CRE market has made it fertile hunting ground for billionaires from other industries, those we like to think of as “men with deep pockets.”
In Nov., The Promote revealed that Savanna’s $255M ($1,440/ 🦶 ) deal for 799 Broadway was backed by Greek copper trading kingpin Aristotelis “Telis” Mistakidis. With Telis (of Glencore fame) in their corner, Chris Schlank & Nick Bienstock were in a position to turn down noteholder Blackstone’s pre-arranged financing package and do the deal all-cash. In Feb., Israeli billionaire Idan Ofer snapped up BGO’s 101 Greenwich St. for $100M+. Idan, like his late father Sammy 🚢, is mostly a shipping man (there are “men who work in shipping” and then there are “shipping men,” a huge difference) but his elder brother Eyal Ofer is somewhat more of a known quantity in CRE, having backed everyone from the Zeckendorfs to the Rudins to MaryAnne Gilmartin.

“Turns out that stealing a bunch of money from municipalities is something that both parties can get behind trying to stop.” 👻
“There's already been billions of dollars of property value taken off the tax rolls. The average mill rate in Texas is 2%. So you're talking about $100 million a year. And that's already off the tax rolls for the next hundred years.” 🫥
"Give a man a fish, he eats for a day. Teach a man to merger arb, he eats for his life." 🐠🐡🎣

Don't cry because it's over, smile because it happened. One of the most astonishing tax loopholes of the modern era is being closed – with extreme prejudice – in Texas 🤠 On the latest episode of The Promote Podcast, we’re joined by Savoy Equity’s Barrett Linburg to dive deep into the gold rush the Traveling HFC set off – and what its end might mean for syndicators, lenders and the cottage industry of consultants & attorneys that popped up to profit off the program. Will & Hiten then discuss the Zeckendorfs’ downtown moonshot: 80 Clarkson’s capstack is a who’s who of CRE & finance heavies, and the developer’s decision to hush-hush the sales process appears to have paid off handsomely. Listen on Spotify here or tune in via Apple Podcasts here. If you’re interested in advertising, hit us up here. And show us 💌 via ratings & reviews. 🙏 

Good deals can be found in the circadian rhythms of the market. Great deals may require a little extra: a macro shock, or perhaps a dramatic change in fortunes. Stepping in after massive fraud has occurred is one way to get there.

The property in Q: The Atlanta Financial Center, the sprawling office complex at the 💝 of the Elie Schwartz crowdfunding scandal, for which Schwartz just got 7Y+ in prison. Schwartz raised money via CrowdStreet to buy the property from Sumitomo for $182M, but instead of closing, he lived. The blindsided Sumitomo secured an extension on its debt, but eventually defaulted. Cushman began shopping the note on behalf of the lending syndicate last year, and now Banyan Street Capital (Rudy Touzet) is stepping up to buy the debt for less than half its $122.5M face value, per REA. The move puts Banyan in pole position to take control of the 915K sf property for less than $70/ 🦶 – and this is in the tony Buckhead submarket. “We believe this is the most opportune time to invest in office assets since the 1990’s,” Banyan says on its website.

This deal reminded us for some reason of when spec luxury developer Todd Michael Glaser (the maddest of lads, seriously, read my interview w/ him it’s one of my all-time favorites) bought Al Capone’s Miami Beach home (where Capone supposedly planned the St. Valentine’s Day Massacre) and then made a nice profit on the flip.

RealPage, the primary target of a national war on algorithmic rent-setting, may find some legal solace in the GOP’s massive tax bill. The “big, beautiful bill” as it’s known, contains a provision that would bar state & local govts. from regulating AI and software-assisted decision making. The provision came to be included after some intense lobbying from the NMHC, whose constituents are some of the megalandlords caught up in the RealPage mess. “This would make it much easier for multifamily owners to feel confident that they are operating on the side of the law and they will not get sued,” NMHC prez Sharon Wilson Géno told WSJ. But much of the damage has already been done. Some of the biggest landlords just don’t want to deal w/ the legal (antitrust suits) & reputational (FBI raids!) risks of using the software, and at least one of them has been focused on building its own in-house tools.

Jersey City banned algorithmic rent-setting this month, joining several other metros such as SF & Philly, but those bans would be rendered moot by this House bill were it to become law. “We would no longer be able to enforce this ban,” Providence City Council prez Rachel Miller told WSJ. Suing the federal govt. is on the table. Another option is rent control, w/ Jersey City councilman James Solomon saying: “That would be the biggest tool if folks are using algorithms to jack up rents.”

When rumblings of the plan to privatize Fannie & Freddie first emerged, The Promote wrote that the best-case scenario for CRE would be a privatization deal that somehow retains the govt. guarantees. In that situation, pricing would stay about the same, while origination volumes would jump – “agency originations would become more like CMBS originations” is how one lender put it at the time. POTUS has now somewhat teased this future state of affairs, saying Tuesday that “I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President.” Here, Trump is not quite speaking the love language of the Mortgage Bankers Association, the powerful industry trade group that has been pushing for an explicit federal backstop. (Handy explanation of implicit vs. explicit guarantees here)