With the holder of his NPL looking to seize his prized Mercedes-Benz branded-condo project, Michael Stern turned to a Miami blue blood: Fontainebleau Development’s Jeff Soffer joined Stern’s JDS Development as an equity partner and co-GP a couple months ago, and together the duo began working on a massive financing package for the 800-unit Brickell tower.

Now, Stern & Soffer are finalizing a ≈$1.3B package led by JPMorgan, The Promote understands. The debt, which would include a ≈$250M slug of C-PACE from Nuveen, would be the largest construction financing in South Florida history if it closes. Stern has also brought in Soffer at his other branded-condo project in the city, the Dolce & Gabbana tower 👜 at 888 Brickell – and there too, the partners are cleaning up the capstack.👇

A 🖋️ from Pensford’s JP Conklin: Citadel called for a hike, which is why they’re a tiny inconsequential shop HQ’d in Charlotte and why I run a $70B hedge fund from South Florida. Markets were the most uncertain about the FOMC meeting in 30Y. Three members dissented and voted for a hike, the first time in 10 years that there were three dissents in the same direction. The front end of the curve dropped about 5bps as the market lowered odds of a hike. The T10 is up 5bps, the T30 is up 13bps, hitting pre-GFC peaks. Read on…

At Mercedes-Benz Places, BDT & MSD Partners was in the running to provide the debt, until JPM came off the top rope, per deal insiders. A Walker & Dunlop team (Aaron Appel, Jonathan Schwartz & co.) is running the process, w/ Soffer and Stern co-guaranteeing the debt. The deal is expected to close next month. The 🐐 Steve Ross currently holds the record for South Florida’s largest construction package, scoring nearly $800M late last year from Ares/Monarch/HPS for his CityPlace office project in West Palm Beach.

Stern’s JDS has been embroiled in bruising litigation w/ its noteholder, Cottonwood Group. The LA-based debt investor had picked up the distressed paper from Maxim Capital in March and almost immediately moved to foreclose; Stern’s countersuit alleges that Cottonwood violated an NDA in a bid to acquire the note from Maxim.

And over at the supertall D&G tower, Stern & Soffer have paid off the $46M acquisition loan last week, according to deal insiders – it is unclear exactly when Soffer came on board. G4 Capital (See: From trucks to bucks) had provided the debt in April ‘24, and in recent months the note had been in play, with debt investors including Beach Hill Capital (Gavriel Naim, Daniel Rotenberg) gunning to buy it. Now, the developers are square w/ G4, and have a term sheet out for ≈$650M in financing for the 250-unit project, per a source familiar w/ the matter.

Last month, The Promote dove into Stern’s maverick career on the pod, tracing his arc from the home-run deal at the Walker Tower to tougher prospects like the skinny supertall 111 West 57th St (which co-GP Kevin Maloney recently lamented as an “architectural marvel” but a “financial disaster”) and Brooklyn Tower (seized by Silverstein).

Despite the headline noise, Stern is playing it zen in public. “You just have to keep moving forward,” he told TRD in an interview for a new cover story in which he’s depicted hanging off a ledge. “Force of will is what gets projects built.”

CRE promoters bilking retail investors to line their own pockets is unfortunately a routine occurrence, so at The Promote we try to focus only on the scams that stand out for scale, chutzpah, or both. We’ve gone deep on Elie Schwartz’s Crowdstreet-enabled caper (crowdfunding platform failing to hold funds in escrow, arbitration only in rabbinical court) and on Vision & Beyond’s targeting of IDF military personnel through officer clubs. Now we have one that leans hard on Christian values and Murican pride (“We’re a cultural and financial shifting of consciousness for Americans.”) The SEC has charged a Tampa-based REIT w/ raising $150M+ from 5,500+ investors under false pretenses and spending $5M+ of it on everything from jewelry to jets and adult nightclubs. The firm, RAD Diversified REIT, run by Brandon “Dutch” Mendenhall and Amy Vaughn, raised funds both through securities offerings (unregistered) and a members-only platform known as Inner Circle, offering the chance to get in on JV deals and hard-money loans. Touting target returns of 20%, the REIT encouraged investors to come up w/ the cash by withdrawing from their IRAs, using credit cards, and even taking out home-equity loans or using life insurance proceeds. To keep investors in the game even as the firm was hemorrhaging money, Mendenhall & Vaughn touted its increasing stock price, showing skyrocketing valuations over years – these valuations were devised by Mendenhall’s brother.

More than $50M of the funds raised were moved into a separate account controlled by Mendenhall & Vaughn, per the SEC. In ‘24, the REIT filed for Ch. 11, a move that put over 300 SFHs and vacant lots under court control. Caught in the middle, as always, were tenants.