Starwood’s Land Sighting

What does $800M fetch you in CRE nowadays? Either a single site for a Manhattan triple-frou condo tower (see: Naftali, Miki), or, as we see from Barry’s latest move, a mega-portfolio of land in Texas. Starwood has snapped up 11 master-planned communities from Hines in hot Lone Star MSAs (Dallas, Houston, Austin). It’s a return to a court that Starwood has been playing on since at least ‘07, when it formed Starwood Land – a vehicle that it says has acquired 50K+ lots and generated $4B in resi land sales. This new deal gives Starwood 16K resi lots and over 600 acres, so the potential upside is significant, but master-planned communities are a looong game – pretty much everything can & will go wrong, and experienced hands are essential.

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Starwood (Cont.)

Starwood, and Barry in particular, get a lot of ink for splashy hospitality bets, but much of the firm’s fortune has been made in precisely these unwieldy, long-term residential plays – they were a pioneer in BTR housing w/ Waypoint (now Invitation Homes) and made out like Croesus on the failed lender Corus Bank’s construction-loan book – Barry said in ‘13 that the firm had doubled its money on that $1.4B bet.

On the Hines acquisition, the end customers are the national homebuilders – Lennar, Toll Bros. & the like – who in turn will create the white picket fenced-dream for homeowners. 🫡 

Newmark v Eastdil: Courtship Ends up in Court

Brokerage is a relationships business, any dealmaker worth their salt will tell you. But relationships do not make for good lawsuit fodder, so you’re left w/ templates & models.

In March, Newmark poached a top Western US multifamily team from Eastdil, continuing a grand tradition. Nabbing the team, led by Joseph Smolen & Geoff Boler, gave Newmark further firepower in the asset class – it’s 3rd nationally, behind CBRE and JLL. But Eastdil now alleges that on their way out, team members took w/ them proprietary docs and even a live deal. The docs, known internally as “cheat sheets,” contain key nuggets such as pricing guidance & portfolio summaries and are core to listing pitches. Taking them over to Newmark, Eastdil alleges, gives its rival an unfair edge and amounts to a breach of contract.

“For one of the deals for which Boler emailed himself the cheat sheet, the client cancelled the listing agreement with Eastdil after Boler resigned and is now using Boler and Newmark to bring the deal to the market,” Eastdil alleged in the OC courts, per TRD. Smolen is not named in the suit, but Boler and 5 other Eastdil alum are.

The action rhymes somewhat w/ one taken by Newmark recently, when it alleged that a former Chicago appraiser at the firm took a doc it described as “the blueprint of Newmark's business” – it settled that suit late last month.

The “people or platform?” debate is a perennial one in brokerage. And as the CRE markets heat up – well, TBD w/ the tariffs – and firms roll out the sweeteners for top talent, expect more of these disputes. The Promote Podcast broke down the Eastdil-Newmark rivalry in an episode last month, which we think you’ll dig 👇️ 

More Fannie Blacklist Names

On Friday, The Promote revealed the names of 2 players who were added to Fannie’s do-not-fly list: Meridian Capital’s Abe Hirsch, longtime point man for Ralph Herzka & Jacob Katz; and Jeffrey Zwick, a prominent closing attorney whose clients included convicted mortgage fraudster Moshe Silber. We had heard of a few other dealmakers added to the list but couldn’t confirm by the time we went to press. Now, we have – here they are 🕸️ 

• Ralph Gelley, an originator at bridge lender Sheridan Capital. Gelley was at Meridian from ‘18-24, but on his LinkedIn that tenure is curiously marked - it just says “debt brokerage”
• Sol Kopelowitz, of Rosewood Realty Group. Was at Meridian from ‘21-24
• Jake Weinstein, who was at Meridian from ‘13-’24

In its pomp, Meridian epitomized Zuck’s “move fast and break things” mantra. Its guys were voracious closers, but that aggression came at a price. Brian Brooks, who was brought in last year by Meridian’s PE ownership to clean house, promised that “we will cut brokers who cut corners.” The ranks have since been thinned, but as we can see from the above list, the impact is being felt across the sub-institutional industry.

CoStar Shake-Up

CoStar has rejigged its board after reaching an agreement w/ 2 major investor groups – Dan Loeb’s Third Point & DE Shaw – who had pushed the RE data giant to boost its profitability. Chairman Michael Klein (earliest investor in the firm – did stupendously well) and 2 other directors are out, and 3 new execs are in, w/ board member Louise Sams taking Klein’s position as 🪑 . A big part of the new mandate is ensuring CoStar’s $156M deal for Homes.com bears sufficient 🍇 . More on CoStar’s M&A tear here.

Quickies

• How does Sterling Bay’s surrender of a chunk of Lincoln Yards to its lender impact taxpayer funds on the rest?

• Office REIT Paramount footed $900K bill for CEO’s personal accounting services 👏 👏 👏 (check out our dive into Albert Behler’s other nepo plays here)

• RealPage sues Berkeley for banning its pricing algorithms (catch up on RealPage’s legal woes here)

• VA congressman says we need a national plan to address the impact of data centers

• Blackstone seizes CIM/Golub’s Mag Mile tower via deed-in-lieu

• Ackman questions Howie Lutnick’s motives on tariff-setting - then walks back his comments 

• Enjoyed this dive into the mind of an everyday American CRE broker 🧠 

Unquotable Quotes

Reminder: Our Gary Barnett special episode drops on the pod Wednesday - subscribe on Spotify or Apple to listen fresh 🧃