In the late 70s, the Brothers Reichmann swooped into Lower Manhattan w/ the deal of the century: paying in the $30s a square foot for the 10M sf “Uris package,” a heist that propelled them into the ranks of Manhattan’s largest landlords and reaped them immense riches in the years to come.

This was the kind of bet that only the deepest of deep-pocketed families could place. For players w/ skyscraper dreams who rely on OPM, however, the big opportunities often lie not in the buys themselves, but in how their partnerships are structured. And RXR’s new thing might be a testament to that. ♊︎👇

“He basically said, ‘we borrowed a hundred percent of the purchase price.’”
“If you're a public company, what else is there but narrative?”
“[Macklowe’s] got the kavorka when it comes to development.”

This week on The Promote Podcast, we look at one of the biggest winners from Nvidia's Silicon Valley real estate rampage: The Sobrato Organization amassed a 12M sf portfolio through a combo of guts, vision & HEAVY leverage, and is now reaping the rewards as Nvidia goes shopping. We then look at why big boys like Toll Brothers are bowing out of multifamily development, and explore who's stepping into the void. Finally, Harry Macklowe is back to adventuring on the Manhattan skyline: But who the hell wants to give the rapscallion developer the cash to do it? And there’s a bonus cameo from SL Green’s Marc Holliday doing his best Terry Benedict impression.

Listen on Spotify here, YouTube here or Apple Podcasts here. A shout-out to our sponsor, Bullpen, a talent shop solely dedicated to the CRE industry. Bullpen can recruit trusted CRE pros at all levels, from analysts to C-suite, and can fill both fractional and full-time positions. Check them out at bullpenre.com to get started.

Scott Rechler has lined up a bevy of partners, incl. billionaire Seth Klarman’s Baupost Group & King Street Capital Management, to back his latest vehicle, dubbed Gemini Office Venture, Gemini has already done $3.5B in deals, and is hungry for more.

“From the top, we’re at close to a 50% discount to where market values were in the last cycle,” the RXR boss told Bloomberg. For RXR, going after big game under this structure allows it a couple huge benefits: less upfront equity risk, but still the chance for tremendous upside if the trophy office market keeps improving - a sale/refi at the right valuation a couple years down the line could crystallize a fat promote. And in the meantime – no matter what happens w/ the actual buildings – a tremendous asset-management fee stream 🧃 (This thing is being billed as a $3.5B vehicle; if you throw a 1% AM fee on that number you’re looking at $35M/Y coming in, + PM fees, potentially acq. fees, but obv this is speculation – no insider info so 🧂 )

Among the Manhattan deals already under the Gemini banner:

That context gives RXR great talking points for its investor pitch. It’s already shown it’s among the best in the market at selling its story: At the top of ‘24, it announced a JV vehicle w/ Ares that would invest up to $1B to buy distressed office in NYC, though it’s unclear what deals that JV has done to date. And this summer, it announced a credit JV w/ Liberty Mutual (also in Gemini) to deploy another $1B in multifamily debt.

Last week, we told you a bit about The Promote Insider, our premium subscription tier. Here’s what it’ll cost - no gimmicks, no $29.99s – just a simple, straightforward offering that we hope will be tremendous value for money. Sign-ups start next week, and founding members will have a 2Y rate lock, along w/ my deep gratitude - HS

We’ve given the One Beverly Hills megaproject heaps of attention in The Promote – see here, on the pod here, and its back story on YouTube here. It’s got too many characters (Boehly! Doronin! Goldstein!) and too many billions not to. Now, the developers have revealed some of the retail lineup & sales action

Goldstein’s Cain International told the Journal that the first resi tower is already nearing $1B in inked deals & commitments. Our favorite bit, though, requires zooming out: As of last year, One Beverly Hills was being billed a $5B venture, already a head-scratcher given that it has only 200K sf of retail, a 78-key hotel, and < 200 condos. Now though, w/o any significant upsizing of plans, it’s being billed a “$10 billion real-estate development.” Narrative drives flows 🤷‍♀

John Dewberry, the Atlanta developer who left perhaps the greatest voicemail in the history of commercial real estate (“assholes and elbows, pal”), says he’s leaving his pugnacious self (largely) to the side after becoming a dad. In an extended and often-hilarious sit-down w/ Bisnow, Dewberry spoke of adopting a “servant mentality” in his CRE projects, absorbed from his years managing his eponymous chic Charleston hotel. He was candid about his shortcomings in some aspects of the business, such as office leasing. “It only took me about six months, about one deal, for somebody to say, ‘Screw you, Dewberry,’ when I got a little too difficult in the office business,” he said of Peachtree Pointe. However, the fire is still there – when asked about criticisms of his slow going on his extensive Midtown land holdings, the former QB had this to say: “You pay $50 for your ticket. You think Nick Saban really gives a rat what you got to say from the 17th row?” 🏈 Dewberry is known for putting his own capital at risk and holds most of the dirt debt-free, so he doesn’t have to care what anyone thinks.

(Bonus: If Dewberry is your vibe, you have to listen to our pod on Atlanta’s OG Man in Full, Tom Cousins – he and John C. Portman were the prototypes for today’s skyline-shapers)