Cybersec Mogul Strikes Retail Megadeal

You may have first heard of CrowdStrike only last summer, when a bug in its software brought the global aviation & financial markets to a screeching halt. But such snafus aside, it’s a pretty extraordinary business, and its founder, George Kurtz, is a billionaire many times over. Bits & bytes may make you the money, but the romance of the brick is hard to resist, and Kurtz couldn’t either: he’s stepping up to pay $650M for a luxury shopping center in Scottsdale, a number that would make this one of the largest retail deals since the pandemic.

The Daddy of Billionaires’ Row

No one fucks with complexity like Gary Barnett. No one stitches together global capital stacks like Gary Barnett. No one combines the light & dark arts of assemblage, litigation, fundraising, development and sales like Gary Barnett. And no one makes better podcast fodder 😻 Our special episode deconstructing 2 of the New York developer’s most audacious deals – One57 & the Ring portfolio – is now live. We get into Barnett’s early days as a 💎 dealer in Belgium, his alliance w/ Ziel Feldman & Kevin Maloney, his ability to birth a whole new asset class (Billionaires’ Row) and his heist in Midtown South TAMI heaven. This is the real estate insider conversation you never knew you’ve been waiting for.

Listen on Spotify here, or Apple Podcasts here. And por favor, share the hell out of this thing w/ your fellow CRE maniacs.

Kurtz (Cont.)

Kurtz is buying Scottsdale Quarter, per REA, which would give him control of a 772K sf joint w/ 300K+ sf of office space and a mall that did avg. sales of $1,280/ 🦶 . If it closes at that $650M price, it would be the largest-ever retail deal in the Phoenix MSA, per Green Street. Kurtz was a shoo-in suitor, given that the property kisses the site of 2 other Kurtz holdings, a former amusement park 🛝 and a former power center; he’s planning a $1B megaproject (1,200+ resi units, 223- 🔑 hotel, offices) dubbed The Parque in that corridor.

The seller here is notable: WPG, the restructured carcass of bankrupt shopping-center owner Washington Prime Group. WPG scored a $1B SASB refi of its portfolio in late ‘23, and announced plans to dispose of the entirety of its retail holdings. With Scottsdale Quarter now spoken for, we’ll see what happens w/ the other 5 properties offered up alongside it – the target price for the whole kit n’ caboodle was $1.3B.

Fannie Staffers Walk the Plank

“Nod as I'm speaking to you. People are looking to me for reassurance and I have no idea what's going on.” Georgy Malenkov, The Death of Stalin 

FHFA director and self-appointed Fannie Mae chair Bill Pulte continues to very publicly rattle the cages at the agency lender, bringing his signature Twitter showmanship to the bloodletting: Fannie has fired over 100 employees, alleging they abetted the kind of mortgage fraud that has roiled the once-cozy hallways of CRE finance. A splashy release put out by the FHFA yesterday quotes Pulte saying that “in President Trump’s housing market, there is no room for fraud, mortgage fraud, or any other deceitful act that can jeopardize the safety and soundness of the housing industry.” It also includes a statement from Fannie CEO Priscilla Almodovar, thanking Pulte for his “empowering” of Fannie’s fraud crackdown. A reality-TV revamp of the kind of stuff that used to be done on the DL. Meanwhile, as The Promote first reported last week, Fannie has expanded its blacklist of CRE players – catch up w/ the latest names here & here.

See also: The Usual Suspects – CRE’s great mortgage fraud reckoning 

Release the Kraken

The kind of thing that makes you think, “why even bother w/ CRE?”: Janover, the online shadchan for CRE borrowers & lenders, announced Monday that it was making a hard pivot to become a digital assets treasury – think of it as a MicroStrategy of Solana. A cabal of crypto bros formerly of the Kraken exchange took a majority stake in the company, and the stock RIPPED – it’s up nearly 600% this week. 🪙 

An Insider’s Guide to the Real Estate Media Game

What do Barry Sternlicht, Billy McFarland and Hiten Samtani have in common? Besides an unhealthy love for the game, they’ve all been guests on The Fort, the business & entrepreneurship pod hosted by Chris Powers. It was a delight to hop into the hot seat & riff w/ Chris about the CRE markets & the business of specialty media. My main point: Everyone deep in CRE is OBSESSED with CRE. It is their sports & entertainment, their dinner goss, their poker table banter ♣️ . So why hasn't there been a media co. that approaches the industry that way? Why instead do we get neutered articles about "transactions accretive to value" 🤮 or fluff lifestyle pieces? Until now, that is 😍 Hope you enjoy the conversation and get value out of it – mostly talk of business, some talk of bris ✂️ - HS

• Listen on Apple 
• Listen on Spotify 

Quickies

• Amazon seeks financing for $15B warehouse expansion 🍱 

• City National Bank takes 145K sf in big boost to SoFla office market

• PE bigwigs increasingly want cash to greenlight secondaries 🧧 

• POTUS wants data centers to be powered by “beautiful, clean, coal.” 💽 (Also peek our Dons of Data Centers feature here)

• Ooh, 🌶️ : Chicago affordable housing investor sues RPM Living for $19M, alleging “catastrophic losses.”

• Russell the relentless: Crescent Heights pays $685K/unit for OC rental 🐕️

•  Martin Selig’s daughter leaves firm as debt sharks circle 🦈 (more on Seattle titan’s woes here)

• Money don’t buy class: Lennar scion charged w/ domestic violence

• Newmark brokers nodding along solemnly while reading this

Unquotable Quotes

PSA: If you, like all of us, are trying to grapple w/ the Full Metal Jacket carnage going on in the markets this week, DO NOT read the macro hot takes in CRE publications – they have <0 idea of what they’re talking about. Just don’t. Instead, follow the handful of seasoned financial journalists who’re in the thick of this and can at least serve as imperfect guides. Bloomberg’s Joe Weisenthal & Tracy Alloway are my go-tos, along w/ the FT’s Arash Massoudi. This thing is too important and too complex to rely on some rando developer’s half-baked takes, so be smart.