Two of New York’s most closely watched megadeals have landed their financing and closed, putting to rest market chatter about whether the investors driving the pricey deals would be able to bring them home.

In the first, Scott Rechler’s RXR scored $785M in debt from Apollo to close on the acquisition of 590 Madison for $1.08B, ($1K+/ 🦶), the first billion-dollar office tower deal in 3Y. Meanwhile, Miki Naftali landed $675M from JPM & Goldentree Asset Management to close on the acquisition of 800 Fifth Ave, an $800M+ bet that New York is ready for its next frou-frou-frou condo project. Some really interesting nuggets on each one 👇

This week on The Promote Podcast, we dive into the scarcely believable liquidity:net worth ratio of the late Jacob Chetrit, and how his estate’s become the battleground for some of New York’s spiciest lenders. We then break down the outsized life & career of seminal Atlanta developer Tom Cousins: skyline-shaper, quail hunter, Ted Turner lender, Buffett buddy – a real Man in Full. And finally, we chop it up on BXP’s spec (or is it?) office bet at 343 Madison Ave. Listen on Spotify here, YouTube here or Apple Podcasts here. To reach our devoted audience of CRE insiders, reach out here.

Apollo’s financing for 590 Madison came in the form of a $650M sr. loan and $135M mezz (that’s a lot of mezz! 🧃 ), per TRD. That followed a scramble by RXR to close on the acquisition from STRS Ohio by the end-July deadline; RXR had been negotiating to land the debt from Cale Street Partners (on The Promote’s Quiet Kings of Capital list 👑 ), a London-based shop run by Goldman alum Ed Siskind and bankrolled by the $250B London arm of the mammoth Kuwaiti 🇰🇼 sovereign wealth fund. Ultimately, RXR had to negotiate a fortnight’s extension, which cost them an extra $5M, and turned to Apollo, its partner on the recap & office-resi conversion of 5 Times Square. Apollo’s most likely doing this deal through its Athene insurance unit, which has rapidly become a real force in CRE private credit – we explored how Apollo has reimagined insurance as REPE 🚀 fuel in a recent issue. (Cale 🥬, per TRD, could still get into the capstack at a later date.)

Let’s try to back into the sponsor upside here: RXR’s equity partner on the purchase, as The Promote first reported in June, is Paul Singer’s Elliott Investment Management. Together (mostly Elliott obv), they had to kick in just ≈$300M in equity to get the deal done, and have a $60M 🍕 of money from Apollo for TIs and such. This is a super-prime location, and given the capex funds available and how tasty Manhattan’s net absorption has been, RXR could reasonably expect to raise rents by double-digit % in the next handful of years as leases roll over. As of summer ‘24, the property was 77% leased, per KBRA, but then came LVMH 👜 in the fall, followed by Apollo. LVMH’s 108K sf lease starts at $85/ 🦶, per CompStak data, while Apollo’s 96K sf lease starts at $98 / 🦶; both tenants are currently enjoying their free-rent periods (24 months for LVMH, 15 for Apollo, per CompStak).

Among the pricey in-place office leases are building materials firm Cemex, which currently pays rent in the $150s/🦶, per CompStak, and financial firm Crestview Partners, which pays a shade below that. Just under 7% of the building’s current leased space is set to expire in the next 24 months, and RXR has surely been firing up its leasing machine in the background while getting this closed. So you could be looking at a nice valuation mark-up by 2030, let’s say – Elliott would do well, RXR even better. Eastdil was all over this one; Will Silverman & Gary Phillips brokered the sale, while their colleague Grant Frankel arranged the $$.

Next, let’s take a carriage over to 800 Fifth, where Naftali’s just closed on the property w/ debt from JPM & Goldentree, the $60B AUM private-credit player run by Steven Tananbaum (here he is explaining how private credit works to D-Rub). Naftali also scored equity from FOs in Mexico, Israel and Japan for the purchase, per Bloomberg. This was a Newmark deal all the way: Spies, Harmon & co. brokered the acquisition from the Winter & Spitzer families, while Jordy Roeschlaub and Nick Scribani (seeing this 😺 everywhere recently) arranged the debt.

Naftali is, of course, planning a luxury condo play at the site of the 355K sf tony rental. Given that the thing is overbuilt, a full demo would be counterproductive, and Naftali is probably better off taking it down to its knickers and rebuilding – even if he does that, the basis here is stomach-churning - $2,300/ 🦶. To make it all work, Naftali hopes to push pricing into the stratosphere: As The Promote reported in April, the blended condo pricing being teased in the lender data room was $11,000 psf 🤯, by a distance a record for New York. But Miki’s no Joseph Beninati… he has actual game, so you have to take him seriously, as we did in a recent pod 👇

Alright, this is a strange one. Private-credit upstart Favo Capital (Vincent Napolitano) paid $190M for a 277-unit rental in Hollywood, FL, but no actual money will change hands. Instead, the seller, Charles “Chip” Abele’s GCF Development, will take stock (at 76 ¢/share) in Favo, which is gunning for a grown-up IPO in the near-future. Favo assumed the $84M DB debt on the property at 1818 Park as part of the trade, per TRD, and then refi’d a chunk of it through Blackstone, the firm’s prez Shaun Quin told Bisnow, noting that the deal “reduced that debt substantially.” Now, GCF (best-known as the developer of Hollywood Circle) owns a piece of a fast-growing lender whose shares trade on the over-the-counter market 🤒 , but Favo is now looking to graduate to Nasdaq; its stock is up nearly 1,000% this year to $2.9 as of Friday, w/ a total market cap of $292M .

“Our goal is definitely pushing towards that Nasdaq as soon as humanly possible,” Quin told Bisnow. “Can't give you any timelines on that, but we'd like to make that possible.”