If Michael Shvo did not exist, it would be necessary to invent him. You need characters like Shvo to fully appreciate the sweep of commercial real estate development, how it brings together money, power, celebrity, design, showmanship and foreign investors in an irresistible cocktail. Tracing the arc of Shvo’s career takes one through the high highs and low lows of the US real estate business, from 24-hour sales offices for luxe condo projects to an arrest and indictment, from a $3B skyscraper spending spree to German parliamentary drama.

So that’s what we decided to do.

In the latest episode of The Promote Podcast, we dive into Shvo’s beginnings as a hard-charging luxury broker at Douglas Elliman, where he broke both records and accepted ways of doing business. We look at his comeback as a developer w/ the purchase of the Getty site on the High Line, and the various partnership disputes he was engulfed in on subsequent ventures. We then explore the very-much-in-the-news alliance w/ BVK and Deutsche Finance that fueled his acquisition of some of America’s most recognizable towers, and the ugly unraveling of many of these bets.

The conversation could not be more timely. As we were putting this together, news emerged that Deutsche Finance America’s supposedly $4B Shvo-centric portfolio will now be overseen by European investment firm Revetas, w/ former Silverstein Properties boss and now lone 🐺 Marty Burger running point. Shvo is also moving to kick Core Club out of his Coca-Cola Building. And then there’s a new WSJ profile of Shvo titled: “A Luxury Real-Estate Builder’s Improbable Comeback Is Starting to Crumble.” To understand how we got here, the episode is a must-listen. (If Shvo isn’t enough heat for you, we also break down institutional multifamily’s biggest legal headache – the RealPage federal antitrust dispute.)

Listen on Spotify here, YouTube here or Apple Podcasts here. Brands – to get in front of our devoted audience of CRE insiders, reach out here.

The market for megadeals is accelerating, or as Brookfield’s Lowell Baron put it, “edging back to a more normalized rate of transactions.” Meanwhile, more modest deals ($5-25M) also saw a slight bump – there were $45.2B worth of such trades in H1, according to Green Street’s new tally. That’s only a 3.5% YoY increase, but notably, far more - 21% – of these small deals went through brokers than they did last year. And the most active shops reaped the rewards.

Perennial winner CBRE once again took the top spot, brokering $5.8B of $5-25M trades. There was daylight between it and runner-up Marcus & Millichap, which did $3.85B in deals, followed by JLL at $3B, Cushman at $2.9B, and Colliers at $2.6B.

This 🍕 of the market, once the domain of private players (FOs, syndicators, rich folk), is beginning to see more interest from institutional players, per JLL’s Marc Schillinger. Added Colliers’ David Amsterdam: “Their in-house teams can underwrite and execute quickly, and many can transact in all-cash, so they’re less constrained by the debt markets.”

See also: Can Eastdil be Senna in the rain? 🏎 🌧

Howard Hughes spinoff Seaport Entertainment Group listed its boondoggle on the Seaport in March, and now Tavros (Nicholas Silvers, Dov Barnett) has stepped up to buy it. Tavros is paying just $150M for the block-long site, a far cry from Hughes’ investment so far: $180M for the dirt in ‘18, plus $40M of air rights, plus years of unsuccessful lobbying to get the thing built. (Edgy hedgie Bill Ackman, who envisions Howard Hughes 🧑‍✈ as a Baby Berkshire holdco, also owns a controlling 39% stake in SEG.)

Hughes hoped to build an $850M project at the site, w/ 399 resi units, office and retail. But the battle w/ neighbors was a long and bruising one, and SEG eventually realized a proper NYC developer would be the right exit. TBD on what Tavros ends up doing – they’re in the mix all over the city, partnering frequently w/ Sam Charney’s Charney Cos on projects in Gowanus, LIC, and beyond. And we’re curious who stepped up to be Tavros’ equity here – it’s recently been Incoco Capital, founded by Fa Park, the inventor of dry nail polish strips 💅

Bloomberg has a fun tick-tock on how the Batman & Robin duo of Pimco & Blue Owl won one of the most coveted opportunities in private credit: the chance to fund Hyperion, Meta’s $29B, 4M sf, 5GW data-center development in Louisiana. Morgan Stanley, running point for Zuck, created an SPV backed by the assets for the process and began courting suitors late last year. Though Apollo was initially the front-runner, Meta kept pushing for better terms. By July, MS had narrowed the list down to the Fab Four, and demanded that they team up to compete – it didn’t want to run the risk of relying on one firm for such a mega-assignment. Apollo & KKR, eager to put capital from their burgeoning insurance businesses to work, were paired up, as were Pimco & Blue Owl. The Apollo-KKR structure would have made it trickier to syndicate the debt down the road. Pimco, however, agreed to arrange $26B in a 144a bond, a syndication-friendly structure, while its partner Blue Owl stepped up w/ $3B of equity. The final arrangement will see Pimco arrange 24Y bonds, including a 4Y construction period before lease payments kick off, per Bloomberg. Pimco also agreed to work w/ MS 🧃 🧃 on the potential syndication; Apollo-KKR, in contrast, would have handled that process themselves.

Why are Wall Street 🐳 willing to contort themselves 🥨 to this extent on data-center deals? It’s because the potential business opportunity is too large to ignore – JPM’s new estimate is that the data centers being built in just the next 2Y will require $150B in external financing - i.e. not counting what the hyperscalers would kick in themselves. Half of that could go the CMBS route, but that still leaves a ton of white space for private credit. And again, we’re thinking of the debt broker commissions to be had… uff 🤯

This Philly story brings together a few of our favorite things: distressed debt, media inside ⚾, Elie Schwartz. So here’s the deal: Centre Square, a hulking 1.8M sf office complex formerly owned by Schwartz’s Nightingale Properties & InterVest, is finally hitting the market as a conversion oppt’y. Offers for the complex, once valued at $500M+, are expected to barely kiss $100M, per REA. CBRE, as the court-appointed receiver for traumatized CMBS investors, is handling the assignment. But we already knew much of this bc of the court’s requirement of a “broker provision,” which required key deets to be disclosed in court filings. CBRE had tried to waive this requirement in order to announce the listing in REA publisher Green Street, claiming that if local media caught wind of the filings, the scoop shop wouldn’t want to, and “critical and free advertising to 40,000 real estate professionals through Green Street News will be lost.” But fret not, CBRE – REA wrote about it anyway. 🙏

See also: Real estate/industry press 101: An insider’s guide