“We believe commercial real estate presents one of the greatest opportunities we’ve seen in many years since the Global Financial Crisis,” Michael Nierenberg, head of $40B+ asset manager Rithm Capital, said in December. Soon after, Rithm made a run at agency lender NewPoint, which didn’t take, but it has been hanging around the hoop waiting for something juicy to emerge. And now, thanks in part to some C-suite high-jinks at a prominent office REIT, it has its prize. 👇

One Beverly Hills is the project that broke my brain’s understanding of capital stacks. How can such a modest (relatively speaking) undertaking need $5B+ in financing to get built? Well, when you look at the cast of characters involved, it (maybe) starts to make a little more sense. Our mini-doc on the project is now live on YouTube. We’ll be doing more of these video snapshots on projects and players across the country, so please write back to this email w/ suggestions of what you’d like to see.

Behind the scenes, we've been developing something exciting for our most engaged readers. It's conceived specifically for CRE pros who want to go deeper. Stay tuned – we'll have more deets to share early next week. 👀

Rithm is buying Paramount Group for $1.6B, it announced Wed., a deal that would give it 13M+ sf of office space x 17 buildings in NYC and SF, w/ notable assets including 1301 Sixth Ave, 900 Third Ave in Manhattan and One Market Plaza along SF’s Embarcadero. Things have moved swiftly since Paramount announced a strategic review in May, followed by a disclosure of an SEC investigation. It had been under fire over reports of executive comp, related-party transactions, etc. – but those terms don’t capture how comical things had gotten at the Albert Behler-led REIT – read this & this to get a sense. Rithm is taking control of an office portfolio that’s far from single-malt ™ - Paramount’s stuff needs heaps of capex, leasing and restructuring. But it’s a bet that buying at a low enough basis in markets that are roaring back (Manhattan net absorption highest since ‘00, SF leasing surge) will be worth that headache. “We’re actually buying this at a substantial discount to stated book value,” Nierenberg said Wed. on an investor call – Paramount shareholders still have to vote on the deal.

Earlier this year, Rithm had been among the advanced suitors for agency lender NewPoint, sources told The Promote, though Benefit Street eventually snapped NewPoint up for $425M. Rithm’s pursuit of NewPoint made a lot of sense, given that mortgage servicing has been Rithm’s bread-and-butter historically, and NewPoint came w/ a $55B servicing book.

Rithm was incubated at what sometimes feels like the Paypal of CRE finance, Fortress. In ‘13, a Fortress-managed REIT spun off its resi mortgage assets into a REIT called New Residential, and BofA mortgage vet Nierenberg came on board to run the new vehicle. It began gobbling up MSRS and cos. in the space. By ‘22, it was ready to leave the mothership – it paid Fortress a $400M termination fee and rebranded as Rithm.

Homebuilding giant Toll Brothers is bowing out of the multifamily development game. The firm is selling its Apartment Living platform for $347M to Kennedy Wilson, which gives the $30B AUM gobbler ™ an add’l $5B+ AUM - $2.2B in acquired properties and a $3B portfolio it will manage for Toll. But Toll made it clear that it’ll soon be fully out, stating that it is “Toll Brothers’ intention to dispose of these remaining assets over time and exit the multifamily development business.” We should note that Toll Bros. co-founder Bruce Toll still has substantial multi holdings through another vehicle, BET Investments.

KW(led by Bill McMorrow, w/ Kurt Zech running point on multifamily) is also acquiring a 29-site development pipeline from Toll as part of the deal. It’s all happening during a heightened period of M&A and firm-level capital raising in multifamily: Brookfield-Yes!, Cortland-Elme, Cortland’s war chest hunt, Bell Partners’ soul-searching, etc.

Blackstone has tapped Katie Keenan to be the new head of BREIT, per WSJ, following the fatal shooting of Wesley LePatner this summer. Keenan, 41, currently runs Blackstone’s mortgage REIT BXMT, which will be taken over by Tim Johnson. BREIT, which caters to wealthy individuals and has a current NAV of $53B, has had well-documented challenges – it gained just 2% in ‘24, which meant that Blackstone couldn’t pocket a promote, and has been hit by redemption requests 🦞 (TBF, Starwood’s equivalent vehicle has also faced similar headaches.) LePatner had been in the job just a few months before she was killed by a gunman who stormed into BX HQ at 345 Park – cannot overstate how much that incident shook the industry.

It was time to take stock of what the 🐐 has been up to since he decided to go ham on West Palm Beach. After building what is arguably the country’s most institutional developer in Related Cos., Steve Ross is back in cowboy mode w/ his largely self-funded ( 🤯 ) vehicle, Related Ross. And he’s using his particular set of skills in really fun ways – luring top-tier educational institutions, scoring massive debt packages and attempting a bypass of Wall Street South ❤‍🔥

But if we talk Steve, we gotta talk Gary – Barnett has landed, in co-host Krasne’s words, “the MOST pref,” and we dive into how that might be structured. Finally, we check in on the litigation around the end of Traveling HFCs in Texas. Listen on Spotify here, YouTube here or Apple Podcasts here. Brands, reach out here if you want to reach our devoted CRE insider audience.