Meridian’s Founder Feud

Being there at the beginning matters. You stood shoulder to shoulder w/ your partners to stand a company up, when there was no brand and no business, when there was no Jim O’ Donovan or Jim Carpenter on speed dial ☎️ That matters, and it means you are forever a core part of a firm’s history.

Being a core part of a firm’s present and future, however, is another story. That needs constant sacrifice at any company, and especially at Meridian Capital Group. An “Eat. Sleep. Close. Repeat” 24-6 lifestyle doesn’t leave time to smell the roses, and not everyone is up for that. And so it was w/ Jeff Weinberg.

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Meridian (Cont.)

Though a partner, Weinberg’s commitment to the firm - one can measure this both by hours and by intangibles – was more akin to that of a producer in recent years, according to Meridian insiders. As in: clock in, do your deals, make your money, clock out. He was gradually sidelined from 🔑 decisions, and in April ‘19, his equity interest in Meridian was terminated as part of an agreement w/ the firm, according to Feb. ‘22 correspondence reviewed by The Promote. In exchange, Weinberg was to receive a series of 5 lump-sum payments – some of the deets of which are redacted. Now, Weinberg is suing: he says he did not receive the money he was owed for ‘24, a breach that also entitled him to an accelerated payout of his ‘25 payment. Meridian failed to make that payment as well, he alleges, and he’s now seeking summary judgment for $6.3M (+ interest & attorney’s fees). His suit includes a March ‘24 letter from Meridian’s outside counsel, in which it cites “certain unexpected market events and financial factors” as reasons for the delay – this is around when the agencies had blacklisted Meridian over fraud concerns, btw, though obv the letter makes no mention of that.

Squabbles about monies owed are common at brokerages; a co-founder going public w/ his allegations against the firm and its leadership is a rare and serious escalation. The suit includes a letter that emphasizes Weinberg’s “long history of loyalty” to the firm and his close r’ship w/ big boss Ralph Herzka; Weinberg is still listed on the company website.

In a statement, Meridian said all Weinberg’s claims were “superseded and resolved in a subsequent agreement. All of our client work for Meridian clients is moving forward and this baseless lawsuit has zero impact on Company operations.” The action comes at a particularly sensitive time for the firm; it’s in the process of finalizing buyers for its agency-lender NewPoint, is bleeding talent, and is working itself back into the agencies’ good books. There’s also the matter of the corporate-level loan Meridian got from NYCB, which The Promote revealed last month.

SoftBank Bigwig Bets on Savanna

The strangest man at SoftBank is not founder Masa Son, though he was indeed hella strange. That accolade instead goes to Rajeev Misra, head of SoftBank’s Vision Fund, which backed WeWork, Katerra and many other doomed proptech 🦄s. A dive into Misra’s eccentricities would require more space than we have here, so go check out this WSJ banger – Misra putting his bare feet 🦶 on the knee of a top ⚽️ exec is among the highlights.

In ‘22, Misra set up his own fund, One Investment Management, w/ backing from the Abu Dhabi royal family 🇦🇪 & Emirati SWF Mubadala, and last year upped its AUM to $8B. Now, OneIM has emerged as a backer of Savanna (Chris Schlank, Nick Bienstock) on its luxe resi project in West Palm Beach, part of a consortium that kicked in $380M. Other lenders in the mix include the Zeckendorf Bros. of New York, Octo Capital (Fred Bronstein, alum of Elliott Management), & Sculptor Capital. Newmark (Spies, Adam Doneger, Nick Scribani) brokered the financing on the 2-tower project, which will include 287 condos ($2M-$10M), 170 rentals, and a José Andrés eatery.

The lender pool in South Florida has been tasty: Chelsea FC owner Todd Boehly (Eldridge) recently stepped up to fund a $390M loan for Starwood/Mast in Miami Beach; BDT/MSD (more on them in our Quiet Kings feature) & JPM teamed up to provide $273M for Witkoff’s golf-centered development; and Elliott-backed Tyko (Adi Chugh) is on a heater for the ages.

See also: Our Bloomberg column on Abu Dhabi’s private-credit craze 

Blackstone REIT Preps $1B Non-Office CLO

Blackstone Mortgage Trust is prepping its first CLO since ‘21, a $1B package backed by 90 properties primarily in multi/hospitality/industrial, per Bloomberg. Previous CLO deals by BXMT were office-focused, and the shift away from the asset class is part of a push to be “very selective” on new office deals. Meanwhile, the Blackstone mothership is calling a “bottom” for office, noting that valuations were down 50-70% and new acquisitions are now on the table – it struck a deal to buy 1345 Ave of the Americas from Fisher Bros. at the top of the year.

Stolly Reunites With Appel

Meet the new boss, same as the old colleague: Dustin Stolly, the debt rainmaker who spent a year or so on the bench at Newmark before officially leaving in the fall, has landed at Walker & Dunlop. Per CO, he’ll be joining the NY capital markets team co-headed by Aaron Appel, Keith Kurland & Jonathan Schwartz, who Stolly worked w/ at JLL before leaving for Newmark in ‘17. There, he was co-head of capital markets w/ Jordy Roeschlaub and brokered a string of monster debt deals; last year, however, Newmark restructured the team around Roeschlaub & Eastdil alumnus Jonathan Firestone, putting Stolly’s place in the pecking order in doubt. 🐤   

We had heard in Dec. that Stolly was also in talks w/ Berkadia & Cushman. At W&D, he doesn’t appear to have been given the co-head title – and we can tell you that titles in CRE brokerage, although meaningless in practice, say volumes about how a firm feels about a dealmaker.

Will CrowdStreet get its Comeuppance?

Platforms are funny things. They want credit for helping make the magic happen – “billions invested in over 800+ projects” – but when things go south insist that they were victims too. Well, burned retail investors in Elie Schwartz’s crowdfunded projects are having none of it: They’re suing to force CrowdStreet to cover $7.2M in losses (+ damages & fees) on a $130M Schwartz Chicago office deal in ‘22. CrowdStreet failed to spot obvious 🚩🚩 in the Nightingale offering, per the suit, and though the listing said Nightingale would kick in $11.7M of skin in the game, it was short at least $5.8M. “CrowdStreet frankly assisted Nightingale in defrauding our clients,” the attorney for the 125 investors told Bisnow; CrowdStreet described the action as “misguided.” Meanwhile, a group of jilted Schwartzians is separately moving to essentially shut CrowdStreet down, arguing to FINRA that the platform should lose its broker-dealer privileges. Through it all, CrowdStreet is playing ostrich in the sand, pumping out thought leadership.

See also: 7 Highlights from CRE’s Biggest Crowdfunding Scam 

Quickies

• Ex-Brookfield 🪑 Carney’s new (less powerful?) job: Head of Canada 🍁

• Schulman expected to testify for prosecution in PA fraud case against Silber

•  Rocket to buy discount resi brokerage/listings platform Redfin for $1.75B

• Terrific obit here of High Line architect Ricardo Scofidio 🛤️ 

• Lots of good new deets here in this Mark Nussbaum deep dive 

Unquotable Quotes