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Your Commercial Real Estate Insider guide. From profiles of the biggest dealmakers to skyline-shaping transactions, we bring you the deals, breakdowns and war stories that move the market — for insiders, by insiders. From bad-boy guarantees to CMBS tranche warfare to syndicator sins, we cover it all.
Each week, The Promote Podcast explores three of the most interesting and consequential stories in CRE, taking you well beyond the headlines and into the heart of the action. Hosted by the award-winning “Bard of CRE,” Hiten Samtani, founder of ten31 media and author of The Promote newsletter, along with no-BS institutional insider Will Krasne. Also check out our 3x/week newsletter for industry insiders at https://www.thepromote.com/
Hiten Samtani (00:00)
Will, do you know the best way to telegraph that you're a responsible steward of long-term capital? That. Sponsor the New York City Marathon. Because if you can go the distance on the streets, you can go the distance in the spreadsheets.
Will Krasne (00:05)
What's
Did you steal that from Eric Adams?
Hiten Samtani (00:15)
I might have.
Welcome back to the Promote Podcast, your insider guide to the money and mania of the CRE markets. Hiten here with Will. This week, we discuss the great changing of the guard at real estate dynasties. The second and third generations are taking the helm of some of the industry's most prominent families.
Will Krasne (00:26)
Hey.
and taking over some of the industry's most prominent lobbies with their artwork.
Hiten Samtani (00:38)
Bet
they are, and there's been a barrage of engineered press to tell the market all about it. We then head west for some California love. CEQA the environmental law that was turned into a tool to torpedo new developments, has been gutted, taken out. Huge win for builders in a state that doesn't really offer too many of them. And finally, we chronicle the taking of Madison 625, an office tower that became a battleground for some of New York's biggest titans, some crazy maneuvering their way.
Will Krasne (01:07)
has a lot of characters in the Promote Cinematic Universe involved, so excited to get into it.
Hiten Samtani (01:11)
Absolutely, should we just start there?
Will Krasne (01:13)
Yeah, absolutely, let's do it.
Hiten Samtani (01:16)
A shout out to our sponsor Vesto, which gives CRE players a single, clear point of access for all their bank accounts. More on them in a bit. So you wanna dive into the history books first? Or what, should we start in the 1950s with Moshe Ginsburg?
Will Krasne (01:32)
Sure, I mean, why don't we even go back further? So first these Indians had Manhattan and then 60 guilders is
Hiten Samtani (01:37)
$26 later.
my bad, of course I should know that from Chisholm, bad. What kind of New York real estate guy am I?
Will Krasne (01:45)
So yeah, in the 1950s, Moses Ginsburg, who developed the Carlisle Hotel, built a tower on Madison Ave that was the HQ of cookie giant Nabisco. And later was involved in one of the great business books of all time, Barbarians at the Gates, about the buyout of RJR Nabisco.
Hiten Samtani (02:04)
Yeah, that's the largest LBO ever until Blackstone EOP creative It's a Blackstone EOP one with Roy March's hair getting cut by John Gray after it's all done, right
Will Krasne (02:09)
it was Blackstone EOP, it might have been...
Okay, that that may be right. And by the way, for all the young kids out there, go read Barbarians at the Gates. It's just an electric electric book. So in late 80s, Steve Ross, the future goat, at that point, he was just a what is a young goat? Are you know, that's a sheep. He bought a 50 % stake in the building and then did a huge renovation and then in potentially the most 80s.
Hiten Samtani (02:23)
Fantastic.
was a kid.
Will Krasne (02:42)
tenant move of all time. got Revlon to come in as an anchor tenant.
Hiten Samtani (02:46)
I'm picturing him kind of schmoozing Ron Perelman or was it Perelman at the time? I don't know if he was involved yet.
Will Krasne (02:52)
indeed, it was Ron Perlman. It might have been when he was married to Ellen Barkin. wow.
Hiten Samtani (02:56)
Okay,
so a lot of big names in there. So Ross comes in, he buys a 50 % stake and essentially gives the tower kind of a new life and sex appeal. 2001, he cashes out pretty big.
Will Krasne (03:08)
Yes, also stake back to the Ginsburg so they own 100 % of the new ish tower.
Hiten Samtani (03:13)
We're getting into all of this and it'll become clear just why. So 2004, the suits come in. This is Mark Holliday, the young man who's just taken over what will become New York's largest commercial landlord, SL Green Realty. So Mark has something to prove. He wants to make some big deals to really put SL Green and himself on the map. So he buys into the leasehold. I think it'd be useful to talk here, well, maybe a little bit about ground leases and separating the fee and all
Will Krasne (03:40)
You beat me to it. for those who don't know that there's two aspects to real estate ownership. Well, if your bills like a dwarf, that was like nine, but generally speaking, you have the fee, simple interest in the leasehold interest. The fee simple interest is simply like the fee to the dirt. So you own the ground on which the building sits. If you buy the leasehold interest, you are leasing the ground and then operating the bill.
Hiten Samtani (04:03)
So you have your landlord is the person or the company that owns the dirt. Exactly. And some of the more famous ones in the city are the Corrine family, Soul Goldman, et cetera. And they've made quite a wonderful generational business just upping the rents every so often on these buildings.
Will Krasne (04:18)
I remember when I worked at Starwood, someone said the best job in real estate was being at the Goldman family business. I think that's actually changed quite a bit. They've had some problems since then. But he said at the time, basically, you might get workers comp at the Goldman family from paper cuts, from opening all the envelopes on the first of every month for all the rent they got. ⁓
Hiten Samtani (04:28)
it might have just a little bit
really
was that simple once he set it up. So here SL Green buys the leasehold, which means they collect the rents on the tower itself. They're the landlord for all the tenants that are coming in, but then they kick up a rent every year to the owner of the fee.
Will Krasne (04:52)
This is actually something that is pretty common for families. So if you're the Ginsburg family and you know, in the late eighties, you might not want to come out of pocket to renovate the building to attract Revlon. So that's why you bring in Steve Ross. And then in the two thousands, they decide we don't actually want to operate this building at all. It's a lot of work. Why don't we sell the leasehold, cash out a huge amount of money, and then get paid millions of dollars a year to literally do nothing.
Hiten Samtani (05:17)
And these are typically structured as 99-year deals with what are known as FMV resets, right? Fair market value resets.
Will Krasne (05:24)
It depends on how you structure it. you can, again, one of the wonderful things about real estate is
Hiten Samtani (05:28)
You can
do anything you want, as long as the other guy agrees to it.
Will Krasne (05:31)
Exactly.
But generally speaking, yeah, so they'll have a 99 year term with fair market value resets every 20 years, 30 years, 40 years, whatever term. Fair market value reset basically means what's the actual fair market rent for this property at a given point. And that's what the rent will reset to. It's not like a CPI increase where you look at the CPI number and say, OK, it was 2.6%. That's what the rent goes up. You have a whole process you go through and you say, hey, this rent that was $5 million a year, could be 20.
And that's what the rent goes to. And so those things are very dangerous to buy the leasehold on because if you don't have clarity on the FMV reset, it could really impact the value because that money you can't get back. Like it just goes straight to the, to the ground rent. This has been an issue on the Chrysler building. It's been an issue on, think the deal I looked at in Atlanta. No, no. And Atlanta has like the W bucket or something. They had a fair market value reset and
Hiten Samtani (06:14)
been an issue on a lot of trophy towers in the...
house leave
Will Krasne (06:27)
Our downside case was like fair market value of the rent was going to like 20 X or something. Our point is that this is very, very impactful to the value of the building.
Hiten Samtani (06:37)
particularly a catalyst for the rent going up can be when there's a change in ownership of the ground. And that's what happened here. So 2013, your boy retail baddie, Ben Ashkenazy steps
Will Krasne (06:49)
I noticed that you didn't call him billionaire real estate investor. not.
Hiten Samtani (06:52)
Very particular reason. Unlike what the trade press says, I chose my words pretty carefully here. So Ben Ashkenazy comes in, he buys the fee for $400 million. Now that is a significant investment, right? And he's only getting very importantly, he's only getting 5 million a year from SL Green in rent. So we kind of expect something to happen.
Will Krasne (07:13)
That is a very low cap rate for those of us who don't really feel like doing the math.
Hiten Samtani (07:18)
Correct. And so in 2016, a couple of years after they buy it, Ashkenazy's partner, Mike Alpert, actually says this. He's like, and let's put some context here. Manhattan's going crazy. This is the time of condo developments all over the space and super high-end condos.
Will Krasne (07:33)
We also had beyond just condos, you had hotels as well. We have the contractually obligated, Baccarat highest price per key in North American history at 2 million per key.
Hiten Samtani (07:43)
That is the full name as you said a couple episodes ago, correct? So you seeing all this activity in Manhattan all these sites are being reimagined as hotels and condos etc. Which means for the people who own the fee they can go to their leasehold owner and say you know what?
Will Krasne (07:59)
pricey the brick going up.
Hiten Samtani (08:02)
You definitely want those corners. So Michael Alpert says the site should be worth $1.4 billion. So Holliday can kind of see the writing on the wall, but this is, we should say a little bit about Mark Holliday here. ⁓ He's a suit. He talks in investor earnings about, know, IRRs and stuff, but I think Holliday at his heart, at his core, is a bare-knuckle brawler kind of
Will Krasne (08:24)
guy.
You don't become the chairman of NYRA unless you really are a riverboat gambler. So he's got that in him.
Hiten Samtani (08:31)
He's a man who takes his chances. And here in 2018, he kind of executed, he made his move, let's say. What did he do?
Will Krasne (08:40)
But then Ashkenazy didn't put up $400 million to buy this. He went and borrowed it. And he borrowed it from, I think, like a very terrifying guy, Chris Ho-
Hiten Samtani (08:48)
One of our favorites, yeah, Chris Hohn. He runs the innocuous sounding Children's Investment Fund. Yeah. But it's basically like a pretty sharp hedge fund.
Will Krasne (08:57)
one of the sharpest. also his divorce filing is public. I highly recommend people Google it and read it. It is out of control. I think it was the largest divorce settlement in English history, but it talks a little bit about like how good his returns have been and how much money he's made. And it is something. So this is this guy is very, sharp. It's firm is very, sharp elbow.
Hiten Samtani (09:04)
Is this a Bravo episode yet or what?
And also pretty active lender in Manhattan should be said. I 432 Park Avenue is them.
Will Krasne (09:24)
They lend a bunch of money to related at Hudson Yards.
Hiten Samtani (09:26)
yeah, didn't know that. Okay, interesting. So they have this money, it's a meslone. A meslone should be paid on time because of many different reasons. One is a meslone can be a path to UCC foreclosure.
Will Krasne (09:41)
Yup, and Ashkenazy was delinquent on the debt.
Hiten Samtani (09:44)
So what happens here? A Mark Holliday season opening.
Will Krasne (09:47)
So he buys a piece of the debt and Ashkenazy sort of understands, I let the fox into the hen house.
Hiten Samtani (09:53)
does
and so his lawyers in 2021 said the following it should be reasonably apparent that something else is driving this behavior basically they know that there's going to be trouble down the road
Will Krasne (10:03)
There's trouble right here in River City.
Hiten Samtani (10:10)
In 2023 Ashkenazy does what he telegraphed he would do. He forex's the rent and goes from about 5 million to about 20 million. And that's a kind of rent hike that would basically wipe out Esselgreen's returns on this kind of deal.
Will Krasne (10:24)
What's so funny is that that's still only a five cap on his $400 million purchase price. And I think his whole point was I'm going to do this. I'm going to wipe out the leasehold owner and I'm going to take the building for $400 million. And that's going to be my basis. I think that was his whole plan. However, remember SL Green was sort of the snake eating itself in this where they own the leasehold, but then they own the mezz.
Hiten Samtani (10:45)
What's the Latin word for that? Ouroboros? like that. So Holliday has a piece of the Mezz that is now delinquent. What can he do? Via the UCC foreclosure mechanism, which basically lets the Mezz lender seize the property. You get first dibs on the property. You have to step into all the liabilities, but importantly, there's no like years of courtroom wrangling on.
Will Krasne (10:55)
he can foreclose.
and you have to step in all the liability.
Andrew V.S. Walgreens, you immediately cut the rent, so that goes away.
Hiten Samtani (11:15)
It's amazing. they're gone. Ashkenazy is out. He's gone. There's nothing he can do about it. So in 2024, ⁓ Holliday and SL Green make their move. They sell the property for just north of 600 million, and it's a pretty familiar face that's the buyer.
Will Krasne (11:20)
in Dean.
The Goat, Steve Ross.
Hiten Samtani (11:33)
Well, is it the goat or is it Blau? But yes, it is related, ⁓ steps back into the building. is the. The Patna of Ra. So related that owned the building in 1986, brought Revlon in, got out of the building sometime in the 2000s, comes back in here. And so you wonder what they're going to do. You wonder what the equity is coming from. And they had already lined it up. They had a pretty deep pocketed partner. think one of the deepest pocketed partners in the world.
Will Krasne (11:38)
Patna of Ross.
Yeah, and also let's just say that this is iconic location. Like it is. Right. Yeah, between 1559, like it is prime prime prime prime prime prime prime. And what you could do here is a lot of different things. And they brought in, as you said, the deepest of pockets, ⁓ the Saudi sovereign wealth fund PIA.
Hiten Samtani (12:03)
Pretty good. 50th and Madison.
That's incredible. PIF doesn't do too many of these deals, but they're in here and we don't have the full cap stack in front of us. There's a report that PIF has already kicked in $200 million. Do you think Related has any equity in this project?
Will Krasne (12:32)
Yeah, I'm sure they do, like a little piece.
Hiten Samtani (12:34)
Little slice.
there's been rumors out on the street that the Saudis were looking to build a private hotel for their gigantic royal family, but that didn't really happen.
Will Krasne (12:45)
I know that would have been cool though because what's funny is there's sort of these legendary stories in the hotel world at the Barkley in London or the Four Seasons in DC where you might be trying to book a room and like a random Tuesday and they're like we're out and like how can you be out this is a random Tuesday and they're like the sags you hear they took the whole hotel from
Hiten Samtani (13:05)
Saudi royal family is here and the suite that you wanted for your wife and you for the honeymoon is being occupied by a falcon. So that didn't happen. What are they, what are they doing instead?
Will Krasne (13:15)
I think it remains to be seen, it could be a pretty prime office building, which is one of the things that is getting funded up and down Madison and Fifth Avenue are these trophy, trophy, trophy office.
Hiten Samtani (13:28)
The kind that Jeff Blough likes to talk about a lot at Hudson Yards, so this kind of fits in with their thesis of new development office.
Will Krasne (13:34)
Right, again in the related playbook, is something I think we're looking forward to digging into in a future date and future episode. Yes.
Hiten Samtani (13:42)
A
Masters of Derisking Absolute Goats
Will Krasne (13:45)
Yeah, because they do all these things. They do the hard work and then they get recapped out, but they stay in for the asset light fees, which everybody likes and also make money off their own balance sheet investments. So it's sort of the best of both worlds. There's no one better at this type of campus development than related.
Hiten Samtani (14:04)
And what I love about this story is that one of the coolest recurring themes in New York real estate is like when someone comes into a building and then leaves, but leaves the door a little bit open to make a move a couple decades down the road. don't completely lose the love for these properties. And I love that.
Will Krasne (14:20)
You love all your children equally, but some more than others.
Hiten Samtani (14:27)
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It's really rare to see California builders score a big win. And it's even more improbable that it's on this issue. We're talking about CEQA. It's an environmental law that's been around since the seventies. In theory, it was supposed to be a way to study the environmental impact of a new project. In practice though, it became a weapon to beat developers into submission, death by delay. And now we're finally seeing pretty monumental legislation to neutralize it. So that's very big deal in California.
Will Krasne (15:30)
It's huge. this Sosequa stands for the California Environmental Quality Act and is signed by then governor Ron Reagan.
Hiten Samtani (15:40)
Ronald
to the rest of us but Ron to Will because that's how it goes.
Will Krasne (15:43)
Exactly Ronnie Ronnie Ronnie are So is one of those things where when it was signed no one really understood the full implication of it and then within a couple of years People realized this is the full toolkit to stop any development for any reason and
Hiten Samtani (16:04)
Any
reason, I think it's the perfect illustration of the law of unintended consequences. Like this shows you exactly how that works.
Will Krasne (16:10)
Totally. It started off with good idea, right? We shouldn't pollute as much. If you look at the 50s and 60s and all the growth we had, like the Clean Water Act happened for a reason. Like the Clean Air Act happened for a reason because people were dying from lead poisoning and all of these horrible things that we did. there's mountains of litigation and the entire tort industry was sort of like made around these massive class action lawsuits about pollution. So it came from a good place. It did, but it was warped.
pretty quickly and basically stopped housing from being built in California.
Hiten Samtani (16:45)
It's hard to overstate how much it was used to basically stop new developments. And it could be like as simple as if I'm a liquor store owner and I don't want another project coming up near me, I could file for a SQL action and I could basically slow that down.
Will Krasne (17:00)
You
had fossil fuel companies filing under CEQA to stop green energy projects from being co-
Hiten Samtani (17:04)
You also had really, and this is important, you also had really vocal critics of CEQA use CEQA when it counted.
Will Krasne (17:11)
You gotta do what you gotta do. But Mayor Rick used it to block Hackman, his rival Hackman's television city.
Hiten Samtani (17:17)
Recently,
and he said, don't really keep track of all the individual stuff. It reminded me of. ⁓
Will Krasne (17:24)
Right, yeah, buffer. The family had a lot of buffers.
Hiten Samtani (17:28)
Yeah, there were a lot of buffers. Like, I didn't know what was going on. So, Caruso's used it, random people have used it, and most importantly, it's become like a NIMBY arch weapon.
Will Krasne (17:38)
Totally. And you can look at the housing that's been built in California. think, you know, I will show off my abundance bro creds here, but there was a stat that I think it was in Lakewood, California at the peak of the post-World War II building boom. Builders completed a house there every seven and a half minutes. Wow. Yeah. And if you look at California, they built fewer houses in the seventies and the sixties, fewer in the eighties and the seventies, fewer in the nineties and the eighties and so on and so on. And essentially what we have done is.
created this massive housing shortage, has again, all these downstream effects that are just really harmful to society and people are getting priced out. It's dry.
Hiten Samtani (18:18)
It all stems from a lack of housing and a lot of it comes back to CEQA.
Will Krasne (18:21)
Yep it does so this had been people have been trying to do this for years hadn't really been a ton of progress and then you know the bill was part of the legislative agenda in the California Senate and Mr abundance himself Gavin Newsom signed it.
Hiten Samtani (18:35)
a lot of criticism of Newsom and much of it is founded, I think his hair is like, when I'm his age, if I have that hair, I'm just going to be, consider myself the luckiest man on earth. It's fun. The slick is perfect. It's absolutely perfect.
Will Krasne (18:48)
I'm a Dapper Dan man. I he looks like a Disney villain.
Hiten Samtani (18:51)
He had a pretty compelling, I think he made a statement, he said the following, the world we invented has been competing against us. We have to perform. Like enough is enough. California is lagging the world on building new housing. And if this is a major impediment, we've got to take care of it. The LA Times, which normally plays these things down the line in their excellent analysis, which I'll put in the show notes, they had the following, they said, no more thousand page studies of soils, the shadows, the buildings may cast and traffic they may bring.
no more risk of SQL lawsuits from angry neighbors. And to sum it up, what this means is SQL can no longer be used on basically any proposed lower mid-rise project, which is already zoned for multifamily in urban cores. That's the gist of it.
Will Krasne (19:33)
Right. And a lot of different property types are exempted from it. Advanced manufacturing, like you imagine chips or other stuff that's going to help the California economy, those are exempted in an effort to try to make it easier for companies to add space and bring jobs to California. So what I think is ironic about this whole thing is that, you know, we've talked about last week how
You have all these folks who say like, I'm never investing in New York or California because of all the regulations. And what's funny is like, if you want to, if someone came out and said, I don't want to buy multi in California because of SQL and it's going to nuke supply. Like I think that's a much more valid reason than all the other stuff. So it's just very funny that like, this is, let's just say this is great for California. It's good for everyone. It will increase multifamily supply, but then the, then the breaks.
Hiten Samtani (20:23)
I wonder though, is this like enough to shake off California's building malaise? Because again, we have rising materials costs, have tariffs, we have labor shortages, we have a bunch of other factors that make it quite hard to build in California.
Will Krasne (20:36)
Without it, there was no shot. So now there at least is a shot. And again, this is going to lag. It's going to take two, three years before stuff that even if you start today, it's going to take that long to build something. But at the same time, these markets like New York, Los Angeles, San Francisco, they have rent elasticity. It kind of costs to build what it costs to build. The land is really the difference. And yeah, you'll have like higher wages for someone in New York than you would in Alpharetta, Georgia. But
In New York, you can get $100 a foot for a rental building. And in the middle of the country or elsewhere, like you're struggling to get like 22. And I think you'll see more folks trying to build there.
Hiten Samtani (21:15)
broader, think we, a couple of weeks ago, we talked about vibes being really important when it comes to, to developing and just being in the real estate business. This is one thing that I think after decades, California developers will feel like, okay, the universe isn't conspiring against us on every turn. This is a major, major win.
Will Krasne (21:32)
With the repeal of CEQA, not in my backyard is going away because there are going to be any backyards because it's all going to be mid-rise apartments.
Hiten Samtani (21:39)
Let's hope so. Let us hope so.
A reminder, the Promote podcast is quickly becoming the water cooler for CRE's biggest players. Listeners are obsessed. mean like tattoos on the chest obsessed. We recently cracked into Apple's top 100 podcasts in the business and investing category.
Will Krasne (21:55)
And if you want to get in front of our audience of dealmakers, influencers, rich people, nepo babies, trust fund kids, West Village girl, all of it, nine yards, hit us up at partnerships, the promote.com that's partnerships at the promote.com.
Hiten Samtani (22:02)
Allocators
Will Krasne (22:15)
So normally we have Hiten tee up a topic and let me rant, but there's been something in the water the last couple of weeks that we just really needed to let the man cook on. So Hiten, we've seen across a variety of publications, the Financial Times, the New Yorker, all over the place, Wall Street Journal, where generational real estate families have been profiling their second and third generations. And often in very interesting ways that don't necessarily relate anything to investing, developing.
Go off on this for a little bit.
Hiten Samtani (22:46)
Okay, yeah, obviously this is a pet topic for us and the promoter in general. I started noticing that there's been an uptick in these puffy pieces in a lot of the trade publications, but also in the mainstream publications about some of the greatest families in New York real estate, in US real estate writ large. There's some kind of contagion where there's been piece after piece and in some cases, a family's scions will get profiled in successive weeks in two competing publications.
and say very much the same thing. Did you read the Sam Rudin piece or the Rudin family piece in Commercial Observer and TRD? Of course I did. It is very hard for an editor to resist an offer like this. A little bit of media inside baseball. A public relations person comes in and says, hey, we're gonna give you full access, which means your person's gonna sit for a portrait, we're gonna give you an in-depth interview, and we're also gonna have the patriarch of the family pop in to say a few words, and we're also gonna give you access to a-
all these big wigs to give you nice quotes about them. It is hard for a publication to turn that down.
Will Krasne (23:50)
So why would you do that if you're one of the families though?
Hiten Samtani (23:52)
you might be looking to raise outside capital maybe. And so you need to tell people like, hey, we have a new generation that's come in. They understand this business. They have the pedigree. They've come up in this business and now they're calling the shots. That could be it, but it also could be like, hey, I noticed that this Scion got a piece in this magazine. I want my own, right? It could be a little bit of that too.
Will Krasne (24:12)
I'm genuinely struck because we made a joke about the art. It's literally in almost all of these. look at whenever you see a real estate sign profile, how many times because I wasn't really interested in the family business, but then I found some cool local artists in Bushwick and I bought their painting for $97,000 and put it in the lobby of our studio rental building. It's uncanny. And a lot of the families don't raise external capital or historically haven't.
Hiten Samtani (24:32)
And then our occupancy magically went up.
and they haven't had to because their buildings have just been cash flow cows.
Will Krasne (24:42)
So
we've talked a lot about how Starwood Blackstone those types of guys have to play the media to help raise capital So if you are if your fortune was made on New York City office and that office has changed
Hiten Samtani (24:56)
quite dramatically, yeah, in the case of the Rudens, in the case of the Derris Sullivan.
Will Krasne (25:00)
Yeah, does that necessitate a rebrand and saying we are not just, you know, cashing the checks from our fifth Avenue office. We are dynamic. We are doing conversions. We're being thoughtful.
Hiten Samtani (25:13)
not just a man or woman who's going by gut, we understand capital markets. We have experience coming up in these kind of more corporatized worlds and we can speak to LPs and we can form our messaging. That's the broad kind of goal, I think. And what you'll notice if you're obsessed enough like we are, is that the messaging is very, very subtly tweaked based on each publication. So in the Wall Street Journal, the Rudens will sit down and they'll give an interview about capital allocation and strategies with debt and repositioning, cetera.
Then they go to commercial observer and they talk about, I'm going to quote you, our great grandfather was a long distance runner, which is why his two sons chose to sponsor the marathon in his honor. And it's basically kind of a nod to longevity and going the distance, et cetera. And then, and you can tell there's a TRD piece that I think came out uncannily, I think the same day. And there was a line in there that says, Samuel Rudin had been an avid long distance runner. And when he died in 1975,
The family became a sponsor of the New York City Marathon. This is very careful shepherding of the narrative by the minders of the families. Those things don't happen by fluke.
Will Krasne (26:23)
almost more impressively in my opinion is they get real hitters to speak to them. mean, ⁓ you got Mr. 42-inch vertical himself talking about what a good landlord they are. Steve Schwartzman at 245 Park.
Hiten Samtani (26:29)
100 %
He's like, as I said, like when you're on the other side of it and an editor is approached by someone saying, you've been wanting to talk to Schwarzman for how long? 10 years. I'm going to get you 15 minutes with Schwarzman. He's going to say nice things about the family. And you can't say no to that for the most part. So I guess the big question for me is like, if I'm a potential LPR, I'm a current JV partner or a potential lender. Do I care about this kind of thing? Does it change my approach when I see Sam Rudin on the cover or Michael Rudin on the cover? Like, what is this all about?
Will Krasne (27:06)
got thrown out of my family business, so I don't know. ⁓ I think it's really hard because if you've made the money and you've created this institution, just definitionally, the second generation or third generation is not gonna have the same challenges. They're not gonna be forged in the fires that you were. Like everything in life, comes back to what they say in Noble House, ⁓ one of my favorite novels where Lincoln Bartlett says that your drop dead money is the most expensive money you'll ever get. And essentially what he's saying is that to make a real fortune, you have to be forged in the fire.
And if you are second or third generation, it's no fault of your own, but you just definitionally cannot be forged in that same fire. And they're trying to craft the narrative that these guys are of the same stuff. Yeah, they're the same stuff.
Hiten Samtani (27:47)
Like Battletell.
I still subscribe to the great man theory of real estate. feel like the delegation only works to certain point. As long as the patriarch is in the building or in the office, ⁓ all the relationships kind of end up there.
Will Krasne (28:02)
I agree to the extent that it's in the families. If you are creating a fun business and you're just making widgets of risk-adjusted returns, like that's a different story, but for these families...
Hiten Samtani (28:11)
100%,
I mean like John Gray has real juice.
Will Krasne (28:13)
But there guys below him who are legit. I mean, look at Jeff Blough related. Those guys are as good as he gets. But if you are a family and you're investing off your family balance sheet, think about it this way. So my dad was a lawyer for some folks in the 80s. And one of the guys was in a workout. They fly down to Texas to go talk to the lender. They give this presentation to the president of bank. It's a rural bank, not in Dallas, not in Houston. Their client owes the bank a ton of money.
⁓ They give this presentation. Here's how we're gonna pay off. We're gonna work out We're gonna do all this that and the other and the guy who the bank who was a it was his family bank Puts his boots on the table and says son. That was a wonderful presentation Now tell me when your clients gonna get in here sit in that chair and tell me he's gonna pay me my money back ⁓
Hiten Samtani (28:58)
That's straight out of A Man in Full, dude. I remember the boardroom scene when the guy goes in.
Will Krasne (29:02)
It's funny when that that book came out my dad read the seed it was dying laughing because he's like that was literally what happened with this guy but the point being that if you made this company it's a different thing if George Perez is sitting across from a lender or sitting across from an LP being like I guarantee you this is gonna work or I guarantee like I will pay you back or this project is gonna generate returns that's a different thing than if his son's doing it just is
Hiten Samtani (29:27)
So how do you kind of emerge from the shadow? I don't think these profiles are quite it. If you're a clear-eyed enough reader of some of these puff pieces, you know that ⁓ this isn't really doing what it's supposed to do, except maybe it's something that goes on their wall in their new corner office. I don't really see the benefit of a lot of these, besides maybe raising the profile, but not in the way that you would imagine makes sense.
Will Krasne (29:50)
The one that I thought was closest to this, and there were still a bunch in there that I thought was kind of bizarre, was the one about the Zeckendorf's and Amy Clarkson.
Hiten Samtani (29:57)
Artie, yeah, Artie's in charge. We're talking about the Zeckendorf family, legendary dynasty in New York real estate. 15 Central Park West was the two brothers, Arthur and William Lee, and 80 Clarkson, which is a project we talked about a few weeks ago, is the deal we're talking about here. And apparently Arthur's son, Artie, Artie Zeckendorf, is the catalyst or the man behind the machine on this deal, according to this new piece in the real deal.
Will Krasne (30:23)
Yeah, because they're trying to make it seem like he made the investment decision. Maybe he did. I don't know. But that's one where it doesn't have him standing in a hallway in a suit with, you know, no tie, a couple buttons unbuttoned. It talks about like him making the investment decision, him pushing for it, him getting, you know, one helping like structure the deal, convincing Atlas that they were the best partner, convincing his family to come on because they do invest capital off their own balance sheet into these deals. So that one, I think I kind of get.
And it's a good launching off point because if that's their last deal because they're in their 60s and they only do, you know, a handful of these per decade, then yeah, I mean, people need to know that there's a new sheriff in town and that he's got his spurs, so to speak.
Hiten Samtani (31:06)
One of the things that I think about a lot is New York City real estate titans have always, and real estate titans across cities, Miami, definitely true for the Perez's, et cetera, have always been so closely tied to the fortunes of the city that they live in, movers and shakers in the broader fabric of the city, and their sons and daughters have to inherit that mantle too, right? They also have to step into this image of civic champions of the city. That's hard to do as well.
Will Krasne (31:34)
You walk around and you can't go three blocks in midtown without seeing the Rudin name somewhere. I mean, think about in the 70s when New York was going bankrupt and
Hiten Samtani (31:43)
Lou Rudin prepaid the property taxes and convinced others to do the same, which helped a lot.
Will Krasne (31:47)
just a capital G great man, he convinced a ton of real estate owners, big mockers in the city to prepay their property taxes to help the city with their fiscal deficit in the 70s when they were at risk of going bankrupt. Can you imagine that today? And we've talked at Nausium about people screaming about New York being like, if you don't lower my tax bill, I'm gonna leave. And here we have a great man saying, I wanna help the city. that's, think,
the legacy you kind of step into if you're in one of these families. Apocrypha.
Hiten Samtani (32:17)
There's a
apocryphal quote from the founding father of Dubai, Sheikh Rashid, and he said something like, my father drove a camel, I drive a Land Rover, my son will drive a Mercedes, but his son will ride a camel. And it's like, that's the constant fear in these families, right? Like, are you able to maintain the fortune? Are you able to grow the fortune? Are you able to be a good steward of the fortune?
and are you able to land the covers in some of these trade publications? I think they're all very important questions. ⁓
Will Krasne (32:48)
See you, spare.
Hiten Samtani (32:53)
That's it for the Promote Podcast this week. Nepo babies, they're taking over the world, and they're making sure that you know all about it. California's most powerful NIMBY weapon has been gutted. Will it be enough to get developers back to building? And 625 Madison, well, it illustrates just why New York real estate is so damn tasty.
Will Krasne (33:10)
And, well, if you want to jack up the rent on Mark Holliday, you better make sure you make good on your best payments.
Hiten Samtani (33:15)
You absolutely have to do that. A shout out again to our sponsor for this episode, Vesto. See how its service gives CRE players a single clear point of access for all their bank accounts by going to Vesto.com. That's V-E-S-T-O.com. For reminder, hit us up at partnerships at thepromote.com if you want to reach our audience. That's partnerships at thepromote.com.
Will Krasne (33:39)
Like, share, subscribe, carry your pigeon inside of a bus.
Hiten Samtani (33:43)
But really guys, the best way to help us out is tell fellow CRE junkies in your life about us. It makes a huge difference early on. Well, thank you so much, that was a blast.
Will Krasne (33:52)
Thank you.
Hiten Samtani (33:54)
Ciao.