Raphael Toledano, the hyperkinetic real estate dealmaker who shot up like a comet in New York real estate in the mid-2010s only to go down in a blaze of rent-stabilized ignominy, is back on the scene. Except if you hear him tell it, he never really went away.

Though he was best known in his 20s for rapidly amassing a prime rental portfolio in Manhattan, he has since diversified into more low-key, less scrutinized markets across the Sunbelt. Toledano estimates that his portfolio today, under the holdco Sorrento Property Group and sometimes in partnership w/ other investors, spans in excess of 4,000 units.

“I’ve gained a lot of knowledge not only about different real estate markets, but also about the lives of everyday Americans – something we New Yorkers rarely see – from Tucson, Arizona, to Pensacola, Florida,” Toledano said in a statement to The Promote. We had multiple lengthy off-the-record conversations over the past 72 hours, in which Toledano came across as a calmer (relatively), more reflective version of his younger self. But it was clear the deal junkie side of him, the side that made him one of the East Village’s largest landlords at just 25, was alive and well a decade on. 👇

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No one expected Toledano to be done with the business. In Jan. ‘22, he agreed not to practice real estate in New York for 5Y, as part of a deal w/ state AG Tish James. (He started getting heat after the NYT investigated harassment allegations at one of his properties on 13th St; Toledano in court blamed the 3rd-party manager, Goldmark).

But the qualities that made the lad of Lakewood such a prolific NYC broker (he is the nephew of super-broker Aaron Jungreis, who was an early source of deal flow) and later an irresistible acquisitions force – aggression, a maniacal work ethic, excessive self-regard (his “I’m worth a fuckload of money, bro” was The Promote’s original footer quote) – also meant that opportunities would soon come his way elsewhere.

He has certainly switched things up. “Something we’ve learned through trial and error is to stay away from value-add projects that require too much repair,” he said. That’s in stark contrast to his strategy back in the day, when he bought up small and midsized rent-stabilized buildings in NYC with a plan to rehab the units and eventually get them to free-market status. At the time, he considered his playbook the ultimate development test. “[Extell’s] Gary Barnett has the easiest job,” he told TRD at the time. “He gets vacant land, he gets an architect, a good contractor, and he builds up. For me, it’s not like that.”

Toledano is now targeting larger (150+ units) Sunbelt buildings, and said he’s in contract to buy 2 such properties in Jacksonville, Florida. He’s partial to late ‘90s/early ‘00s stock, where “we can focus on tenant retention and upgrade the property by adding amenities and tenant activities.”

The Promote was alerted to Toledano’s resurfacing by a multifamily broker active in Houston, after Sorrento issued a press release last week touting the $31.5M ($97K/ 🚪) sale of a 324-unit complex known as Holly View Apartments to Rakesh Bansal’s Accel Equity Group. This broker was perplexed by the timing of the release, as records show that the last time the property changed hands was in ‘22. The fee is currently owned by the Pecos Housing Finance Corporation, i.e., it is a deal now structured under the notorious and now-defunct Traveling HFC vehicle. The borrower is listed in records as 7C Equity Group (another Bansal entity). Sorrento also just announced the sale of a 325-unit rental in Tucson to Tower 16 Capital (Mike Farley, Tyler Pruett) for the same $31.5M price. However, per sources familiar w/ the deal and Tower 16’s own website, this sale (brokered by Newmark) also took place in ‘22, and for $35.5M. It’s unclear why Toledano would do a PR blitz now for 4Y-old deals. Though now that he’s putting himself out there again, we’d expect plenty more fresh deal activity.

It’s worth noting that his 5Y New York lockout runs out in Jan. ‘27, though Toledano intends to keep out of the market in which he made his bones. “I have no plans to return to the New York City real estate market,” he said, “now or in the future.”

Given how meteoric his New York rise was, we had to ask him to look back. His 27-building East Village acquisition from the Tabak family for a combined $140M was considered a stone-cold coup at the time: This was 4Y before New York’s rent reforms, which nuked the rent-stabilized —> free-market business, and many big players, from Isaac Kassirer to E&M to Treetop to the Kushners, were in the same arena. Toledano financed one chunk of the acquisitions w/ $124M from Madison Realty Capital, and that debt eventually proved his undoing: Madison took title to the properties out of bankruptcy in ‘21.

To his credit, Toledano, now 36, did speak to it: “The era you’re referencing was when I was 25 and had very minimal experience in the industry,” he said. “I went from owning three buildings to 20 almost overnight, which was too much to handle. I made mistakes and have certainly learned a great deal from them, while also gaining valuable lessons that I’ve carried with me. In the 10 years since, that deal has taught me about the responsibilities of a landlord and that each apartment is someone’s home. That has instilled in me and my team at Sorrento an impeccable level of tenant focus.” 🕴

This week on the pod, we break down an ingenious scheme that has wreaked havoc on several regional banks. Lad of Lakewood Shaya Prager became one of the biggest buyers of suburban office in the pandemic era. Everyone wondered how his Opal Holdings could make the numbers pencil, but perhaps his lenders should have wondered harder, too. Next, we look at how Apollo is looking to become the Everything Store of CRE finance: Two fresh deals – with UDR and with Mubadala Capital – showcase the breadth of its ambition. Plus, our Punch List rundown of the newsiest industry happenings: 350 Park's construction loan; Webstar's fugazi project; Hines- Hines DST; Lower Manhattan's heimish transformation; NYC's nonprofit dibs ruling. Listen: Spotify, YouTube, Apple.

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"There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again." - George W. Bush

A classic Yiddish trope distinguishes between a schlemiel and a schlimazel. A schlemiel is the guy who spills the soup. A schlimazel is the guy he spills it on. We’ve reached for this analogy previously in relation to an unlucky lawyer caught up in a scandal not of his own making, but thought of it again when we saw this incredible REO nugget from Benefit Street’s earnings call Thursday: Insiders, read on 👇 🔒