Time for some Caesars and Timbits: Meyer Orbach & Josh Gotlib have pulled off their Canadian coup, raising $410M (the real thing, not CAD) on the Toronto Stock Exchange for their UPREIT of 5 tony Manhattan rentals. On top of that, they reeled in a whale to give the thing some institutional street cred: Cohen & Steers has committed to buying $90M of additional shares. 🐳

The 2K+ apartment portfolio spans 1.8M+ sf & claims avg. occupancy of 98.6% and $87 psf rents (gross? net? 🤷). It includes the tony properties Orbach & Gotlib bought from Stefan Soloviev as well as the American Copper Buildings purchased from Michael Stern’s JDS. The partners had spent $2B+ on the buildings in ‘22 & ‘23, and loaded them up w/ pref - early on at 685 First Ave, for e.g., former rent-reg royalty Isaac Kassirer was in the mix, in partnership w/ the wealthy Canadian Wynn family (operating under Gold Wynn), but that deal soon went sour – Gold Wynn sued Kassirer, Kassirer sued Orbach/Gotlib, and the cases are winding through the courts. In Jan., Orbach & Gotlib recapped the property via pref from RXR & Macquarie plus a $240M loan from Apollo’s Athene; RXR, Macquarie & the Qataris had earlier provided $261M pref on 3 other properties in the just-IPO’d portfolio.

All that pref makes further recaps a lot trickier, and their long-term attractive debt made refis moot. So the lads needed another exit, and they found one in the modestly sized trading rooms of the TSX – the deal is one of the largest-ever real estate IPOs in Canada, and the first corporate IPO on the TSX in ‘25. As we had written last month after the preliminary prospectus for GO Residential was filed, “there are more Canadian dollars with a mandate to buy Canadian listed securities than there are USD to buy new sub-scale REITs in the U.S. market.” In its IPO docs, GO Partners pegged the value of the properties at $2.74B. They also have a tax protection agreement (p62) in place that puts the true tax burden on the REIT rather than on the current owners 👏 🫡 . Wonder if their success will spur other NYC landlords to attempt the TSX pilgrimage – well, guess let’s wait & see how the thing (TSX:GO.U) trades – it’s down 3.3% Friday)

We dove into the “quantum of pref” on the portfolio & some of its other quirks at the end (25m in) of our recent pod.

Brookfield’s new CRE boss wants to put the word out there: We back up.

Lowell Baron, who took over the top job from Brian Kingston last month, said that a megadeal limbo that lasted ≈ 3Y is starting to clear. “We’re edging back to a more normalized rate of transactions,” Baron told Bloomberg. Translated from asset-manager speak, that’s basically 🚀 🚀 🚀 . Baron also addressed investor reluctance to allocate to CRE, which he said Brookfield has now being overcome by returning cash to them after some big exits. It’s disposed of $13B in CRE this year, compared to just $3B in sales in H1 ‘24, and this month struck a $2.2B deal to sell NNN machine Fundamental Income Properties to Starwood. “One of the reasons people were holding back is because they weren’t getting capital back,” he said, adding that “we are returning a material amount of capital to our investors and I think it is going to grease the wheels and allow them to allocate to new funds.” Brookfield has now raised $16B for its latest flagship CRE fund, including $5.9B in Q1. 🧃

Another factor in the relative lack of megadeals over the past couple years was that distress is taking its sweet time coursing through the system. “This moment in time,” Baron said, “continues to be elongated.” ⌛📏

See also: Funds Feeling Fund-y

The Promote had first reported on a barrage of blows to Greystone’s lucrative agency-lending practice: Revocation of its Lightning Lane privileges 🐭, increased scrutiny of HUD hotshot Donny Rosenberg’s deals, and the exits of rainmakers such as “DUSty” Dan Sacks (NYC), Shaya Ackerman (NYC) & Eliav Dan (LA). Now, CMA has more on other recent sr. exits, Jeffrey Lavine & Michael Zampetti. It also sheds further light on pressures in Greystone’s Fannie business: as of last month, of the ≈ $700M in MF loans held by Fannie that were ≥ 60 days delinquent, Greystone originated 27% of them – the most of any lender. And for loans that were ≥ 120 days delinquent, Greystone originated over half. A hefty chunk of its business was loans brokered by Meridian Capital, which was blacklisted by both Fannie & Freddie in ‘23/24 but has since been cleared by both agencies. (Side note: Meridian, which got back to Freddie action w/ a $173M refi for Ruby Schron, is dipping its toe back into hiring)

Greystone has begun exploring its capital-raising options, sources told CMA, though may not have kicked off a formal process yet. Cushman owns a 40% stake in Greystone’s agency/HUD/servicing arm, and Greystone has a JV w/ BlackRock on an affordable housing lending platform.

Everyone’s who’s been through an abrupt breakup knows the feeling: You wander around, searching for answers, trying to understand how things played out the way they did. The FDIC’s rapid shuttering of 2 regional banks at the center of the CRE conversation – Signature Bank & First Republic – has evoked similar emotions. Two years on, borrowers and fmr. bank execs are still looking for closure.

The latest: George Klett, who chaired Signature’s CRE committee, penned an op-ed in CO, urging the FDIC to begin returning money from the selloff of bank assets to creditors, bondholders & shareholders (of which he is one). Klett criticizes the FDIC’s decision to pull the plug on the bank in part due to its crypto exposure, saying that Signature’s thriving CRE business became collateral damage in the FDIC’s desire to “make an example out of Signature.” However, the Trump administration views crypto far more warmly, and given that plus the fact that Signature didn’t break any laws, “isn’t it time for the billions of dollars that the FDIC has collected to be disbursed, including returning any and all fees and penalties the FDIC charged?” Klett has been a repeat critic of how the FDIC handled the shuttering, and has also called out its decision to avoid a coveted CRE loan pool to a Related/CPC venture, rather than to the highest bidder – we got into the politics of that “heist” on the pod recently 👇