When Benefit Street Partners was finalizing what would be its largest loan to multifamily syndicator GVA, the 10Y started going haywire. Looking at the charts, Benefit’s CRE boss Mike Comparato started feelin’ queasy.

“We were just like, ‘this has to matter, right?’” Comparato recalled to The Promote. He & chief lieutenant Brian “Buff” Buffone made the call – they were going to downsize the loan. They rang GVA principal Alan Stalcup w/ the bad news.

“And so he went bananas,” Comparato recalled. “I had 17 guys from Newmark who were brokering the deal call me, screaming, ‘how could you possibly?’ And I said, ‘Alan: call the seller [Cedar Grove Capital’s Aaron Gorin]. He’s 6xing his equity – it’s not like they’re not going to close if you ask for a price reduction.’” And that’s what indeed came to pass – Gorin dropped the price and BSP funded the deal at the lesser amount. GVA, of course, eventually defaulted, and things between the syndicator and BSP got theatrically ugly. But Comparato credits that 11th-hour retreat w/ saving his firm millions of dollars.

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Many CRE execs mix-n-match from a book of cliches when discussing their business in the media, particularly on hairy topics such as default & litigation. And then there's Comparato, who took the opposite approach in his new chat with The Promote Podcast: real talk, unvarnished, and a rare detailed look inside the syndicator and agency-lending machine. If you're in the business of borrowing or lending on CRE, this is a must-listen.

We get into how things got so bad in the Sunbelt. Sponsors who had never been burned just kept ramping up (“They said, ‘we're closing a deal every 13 days’ - that is an unsustainable pace”); pricing projections entered Fantasyland; and fraud only came to light once rates turned sharply (“We had a building burn down and it was never disclosed to us – the insurance proceeds just disappeared.” Comparato also weighed in on The Promote’s pet topic, Traveling HFCs (“that's not capitalism – that's a lottery ticket”). We then broke down the $425M NewPoint transaction and the opportunities in agency lending, even if the privatization scenario goes through.

Listen on Spotify here, YouTube here or Apple Podcasts here. If you’re interested in advertising, hit us up here. And please, go tell Prof G to have us on to talk CRE – as co-host Will Krasne says, “Real estate is more than just houses in Delray Beach.” 🙏 

Dizzying array of pockets & players in this upcoming LIC resi skyscraper – thought it’d be useful to break down exactly who’s who at 24-19 Jackson Avenue, the 55-story, 600-condo project that just landed a half-billion dollar funding package (h/t CO).

A: The equity: Developers Tavros (Nicholas Silvers, Dov Barnett) and Sam Charney’s Charney Cos are frequent collaborators, most notably in Brooklyn’s Gowanus nabe (See: Gaffers of Gowanus), where they’re planning 2.2K apartments x 2M sf. Their equity partner there & also on this LIC deal is Incoco Capital, a shop founded by cosmetics impresario Fa Park – famed in that world as the inventor of dry nail polish strips 💅💅 (Incoco also bought Williamsburg’s The Dime from Tavros/Charney)

B: The pref: $100M is coming in via Kushner & OneIM, which is SoftBank’s bigwig Rajeev Misra’s shop. OneIM, which is also backing Scott Rechler’s RXR on a new multi vehicle and Savanna on a luxe West Palm Beach project, is fueled by Abu Dhabi money. (We’ve talked before about the emirate’s private-credit ambitions – a primer in our Bloomberg Odd Lots guest column here.)

C: The debt: Madison Realty Capital is stepping in w/ a $425M check, which is v on-brand nowadays. Drew Fletcher, who runs Greystone’s large-loan action, ran point here.

Uncle Sam must face the legal music over its decision to enact eviction moratoriums across the national multifamily market during Covid. A US federal appeals court rejected the govt’s bid to have a case in which landlords (Darby Development Co. et. al) sought compensation for unpaid rent dismissed.

“Only the Supreme Court can provide the needed clarity as to the meaning of ‘authorized’ in its takings jurisprudence,” Judge Raymond Chen wrote in an opinion (h/t Reuters). We’re far from the end of this battle, but if it does go the industry’s way, the federal govt. could be asked to repay billions of dollars in lost rent to landlords, who’ve long complained that the moratoriums decimated their financials and were abused by tenants. Nifty discussion on the constitutionality of such moves here.

Capital loves platforms, particularly ones w/ significant regulatory & political moats. Affordable housing is one of those incredibly moat-y businesses, and so if you can get real traction there the money will find you. The latest example comes via Ron Moelis’ L+M, which has sold a minority stake to investment firm Sixth Street ($100B AUM). Terms weren’t disclosed, but CO reports that L+M leadership will remain in place. Running point on the Sixth Street side was US CRE head Marcos Alvarado, who hardos will know from his time at Starwood running the hella lucrative Corus Bank deal.

The L+M/Sixth Street deal is part of an AUM gobbling ™ M&A flurry in CRE: Barings-Artemis, Ares-GLP, Blue Owl-IPI, etc.