Pulte’s Agency Purge

There is an element here of chaos for chaos’ sake that will surely jolt the all-we-crave-is-certainty world of agency lending. New FHFA director Bill Pulte deep-sixed the CEO of Freddie Mac yesterday, along w/ the mortgage giant’s head of HR and other execs. Pulte, who earlier this week had fired 14 Fannie and Freddie board members and appointed himself chair of both boards, also placed the FHFA’s COO on administrative leave.

The now-ex Freddie CEO, Diana Reid, was barely a half-year into her tenure, but took the news on the chin – she’s already updated her LinkedIn.

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Agency Purge (Cont.)

The Promote peeked at a Mar. 19 memo Pulte & Reid sent to Freddie staffers, in which they mention “looking for great people to step up” and laid down the law on RTO: Starting 5/1, all Freddie employees would be expected back in the office 5 days/week. Just a day after that memo, Pulte liquidated Reid, per Semafor; he has now tapped Freddie prez Mike Hutchins as interim CEO.

Over at Fannie, it’s been less of a bloodbath so far – Priscilla Almodovar is still listed as CEO – though Pulte did move to pull back on remote work (which is a MUCH bigger deal at Fannie than Freddie), according to someone who listened in to the all-hands call. And there’s a new-sheriff-in-town vibe about the place. “There is no doubt Pulte has effectively usurped power and is running the show,” one Fannie employee told Semafor 🦊 🐔

This is all happening of course, w/ the backdrop of potential privatization of the GSEs. Wild times.

CMBS: No Longer Just for Stabilized Stuff

CMBS keeps encroaching on the development game. We had the Lake of the Ozarks deal earlier this month, where lender X-Caliber moved to securitize part of the debt on a resort project. Now we have Goldman Sachs teeing up a data-center redevelopment SASB deal for an Aussie REIT (DigiCo) in which, per CMA, the issue would be collateralized by the funded portion of a floating-rate acquisition loan. The 30MW project in the Chicago burbs is still under construction, and if the deal goes well, expect to see more CMBS offerings of its kind. W/ the gobs of capital required for data-center projects, trad lenders alone can’t do the trick, and there’s an opening for CMBS, one market player told CMA. Another, though, advised lenders to tread carefully. “Anybody who thinks this is truly a real estate deal doesn’t really know what they’re looking at.” 😕 

Barnett’s Chanel Play

This publication is turning into a Gary Barnett bulletin, but we’re betting readers are cool w/ that. CRE scribe Lois Weiss 🔫 reports that Extell’s in negotiations w/ Chanel 👛 for the luxe brand to buy the retail condo at the developer’s upcoming Madison Ave tower. Talk is that Chanel would pay mid $400Ms ($6,900 a foot) for the 65K sf spread at 655 Madison. Barnett picked up the the site for $160M in Oct. w/ plans for a luxe condo tower, and then upsized the assemblage in a $103M deal w/ Solil this Feb. Any deal w/ Chanel would significantly de-risk the project – a la what Barnett pulled off w/ Nordstrom at Central Park Tower and Ikea at 570 Fifth. (One thing I’m fuzzy on, though, is whether the Chanel talks are still on – i.e. a deal is imminent – or whether they came and went – TBD)

Lil’ more color: Chanel had earlier been in talks to buy the retail at 660 Madison, the former Barneys space that part-owner Ben Ashkenazy had described as “the best piece of real estate on Madison Ave.” We should note that Ashkenazy is a minority partner in that property, which sources told The Promote is controlled by a cocktail of SY heavy-hitters (exact families involved unclear). The partners, per sources, had earlier tapped Jeff Sutton, who knows a thing or three about selling space to luxury brands, to land them a buyer, and Sutton’s involvement came w/ a hefty success fee.

Newmark’s GP Staking Push

Interesting nugget via REA on how brokerages are looking to expand their offerings: Newmark tapped an Evercore banker to launch a new division to help CRE cos. raise firm-level capital. Chris Hope will work w/ fund managers & owners to raise capital thru various means – company-level pref, minority/majority stake sales, etc. In this, the brokerage is taking a page out of the PE playbook, something we’re sure to see a lot of amid all the fund manager consolidation (see Barings-Artemis, Ares-GLP etc. etc.) and the push for programmatic JVs (see Birge & Held’s $500M quest for acquisition 🧃 ) BTW, we riff on some of these brokerage spreading wings-moves in next week’s podcast where we discuss Newmark vs. Eastdil, so stay tuned for that. 📺️ 👂️ 

Have HFC, Will Capital Call

Fun one: DJE, a San Antonio-based multi syndicator led by Devin Elder, tried a traveling HFC - and if you’re somehow unfamiliar w/ those, have you even been reading The Promote? – play to rescue a distressed deal, which is by now SOP in the Lone Star State. What is interesting here, though, is that DJE, which touts its capital-call virginity 👆️ , used the potential HFC opportunity as the reason for teasing a capital call ☎️ “There’s a possibility that securing the tax abatement alongside a refinance might require additional cash at closing,” DJE wrote to investors in Feb., in comms reviewed by The Promote. “Should this be necessary, we will need to initiate a capital call from investors to fund a cash-in refinance.” It doesn’t look like it worked out, though: this month, DJE informed investors that a lender had moved to foreclose on its $11.3M note on the property, a 100-unit building near UT San Antonio known as The Row.

See also: Inside Texas' Vanishing Property Tax Rolls 

Quickies

• 🎥 Money magnet > babe magnet: Gary Barnett does it again

• Boulevard of broken dreams: Mapping South Florida’s canceled/shelved office projects 🌴 

• Related heavy Bruce Beal buys into the Celtics 🏀

• Vlad Doronin seeks $2B to fund Aman 🗺️ expansion

• Werner, Karasick land extension on Mobil Building’s $525M CMBS

• Edgy hedgie: Paul Tudor Jones wants to buy public street to create pvt. compound in West Palm Beach 

• Interesting update in Newmark-Elie Schwartz dispute: Schwartz’s former partner Simon Singer argues he’s become collateral damage 

• ICYMI: The Promote’s podcast is now live- tune in here 

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