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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, along with no-BS institutional insider Will Krasne. Now a top 80 pod on Apple in "Business & Investing." Also check out our 3x/week newsletter for industry insiders at https://www.thepromote.com/
Will Krasne (00:03)
Show me the money!
Hiten Samtani (00:05)
just for a couple of weeks right so you can close on a couple deals you'll send it back with 500k or so on top
Will Krasne (00:10)
One man's user rate is another man's proof of funds.
Hiten Samtani (00:13)
Joke's on you, because one man's usury is another man's escrow fraud.
Will Krasne (00:17)
KOWI-
Hiten Samtani (00:28)
Welcome back to the Promote Podcast, your insider guide to the money and many of the CRE markets. I'm Hiten Samtani
Will Krasne (00:33)
and I'm Will Krasne
Hiten Samtani (00:35)
A shout out to our sponsors, Loan Boss, the best in class CRE debt management software.
Will Krasne (00:40)
and Bravo Capital, the leading HUD and Bridge lender.
Hiten Samtani (00:43)
It's cool to have brand partners that are in the mix in the industry. They get the lingo. They love the content and they're firms that our listeners are already working with or want to work with. So it's a good time.
Will Krasne (00:51)
It really is. It makes everything organic. We don't want to be one of those things where it's like, Bill Simmons brought to you by Allstate. Reminder, tomorrow, Thursday, April 23rd, Hiten is chopping it up with Lightstone's David Lichtenstein on all things CRE investing. That event is for insiders only, so head to thepromote.com slash upgrade if you want in.
Hiten Samtani (01:12)
I'm really looking forward to it. It's going to be a good time. This week, we look at how New York City is chomping at the bit to tax the writ. We'll never get this one, but can you chant back or no?
Will Krasne (01:22)
It's better to have champed in loss than never champed.
Hiten Samtani (01:27)
This week we look at how New York City is champing at the bit to tax the rich. But will the rich champ back? Dubai's answer to Donald Trump is bringing his Habibi bling to Surfside. But so far it's been a sales desert. And the from-world's Kevin Bacon, the nexus of a head spinning amount of CRE activity, is facing grand larceny charges over escrow fraud and as firms have just filed for bankruptcy. A lot of revelations in there. It's an episode, a series, it could be anything.
Will Krasne (01:49)
That one is a whole bag of
It's gonna come to you on Netflix in about 18 months.
Hiten Samtani (01:58)
executive produced by the provo.
Will Krasne (02:00)
So much CRE spice in one episode. What is this, an episode of Hot Ones? Who wrote this? Let's start with the punch list, our signature rundown of the newsiest news in CRE.
Hiten Samtani (02:15)
First one, SREIT just did a major refi. $1.7 billion, 13,000 units, Freddy?
Will Krasne (02:21)
what, a fifth of SREIT's or Starwood's entire multifamily portfolio. Most of this is about five years old as part of the Strata portfolio that they bought, but they've sold off some stuff since then. We talk about Extend and Pretend or Blend and Extend or Survive till 25. And this was two-year loan, three one-year extensions, and they used every one of those.
Hiten Samtani (02:41)
So they hung on by a thread, but they did hang on. got it done. It shows that liquidity is still available for the biggest of the big, if you know how to hang in there long enough.
Will Krasne (02:49)
totally and they sold off some really good stuff to bow.
Hiten Samtani (02:52)
RIP Bell, BGO partners join now.
Will Krasne (02:54)
Sorry, didn't sell to Bell. It sold to the artist foreplay known as Bell. But yeah, liquidity is still there for the major players. It's more sort of survive and advance than dominate.
Hiten Samtani (03:06)
⁓ My other takeaway is a little more personal. The guy in the center of this one, the guy who got an atta boy from Willie Walker himself was Dustin Stolly We're back. We are back. So good to see a good comeback story. Stolly, just to recap, he was a really big debt broker at JLL, then went to Newmark. was co-head of the division with Jordy Roeschlaub And then he disappeared for a little while and they reorganized the unit around Roeschlaub and Jonathan Firestone, ex-Eastdil guy.
Will Krasne (03:15)
We are back, baby!
Hiten Samtani (03:35)
And Stolly kind of faded into the ether. But then he came back, went back to work for Aaron Appel at Walker & Dunlop. He's got a chip on his shoulder and we love seeing a deal maker with a chip on his shoulder. So he did this one. He did 111 Wall Street, the Office to Rezzy record deal. Nice to see Stolly back in the mix.
Will Krasne (03:51)
Headshot is tremendous. I'm glad to see it back on traded. Looking forward to seeing a lot more.
Hiten Samtani (03:57)
Alright, next one.
Will Krasne (04:03)
those jurisdictions said Sam Altman you're coming off way too likeable we just can't have someone with that much charisma building stuff in our country we're gonna have to hit pause
Hiten Samtani (04:13)
This is also after pulling back from an expansion that they had planned in Texas.
Will Krasne (04:17)
Yes, so that Stargate plan which got so much hoopla, what, two years ago?
Hiten Samtani (04:22)
I believe the White House is pretty involved in this project.
Will Krasne (04:25)
They were, and it's Oracle, all of those folks. That's on pause.
Hiten Samtani (04:30)
It's the who's who of global capital. Everything from the Middle East sovereigns to all the big private credit players in the US.
Will Krasne (04:37)
everyone with an office on Park Ave between 47th and 52nd. The bigger takeaway here is that this has been pushing up the entire global economy as we've all have said. If this is getting paused, not just in the US but elsewhere, look out below.
Hiten Samtani (04:51)
All right, next one, Ares is investing up to $300 million in C-PACE deals run by Clearwater.
Will Krasne (04:58)
Clearwater, which is run by Jonathan Seabolt friend of the pod. He sold his company to AXCS Capital, which is owned by Conversant Capital. Your boy. Yeah, Mike Simanovsky do everything, lot of BTR brokerage. They own George Smith Partners and then also Clearwater.
Hiten Samtani (05:00)
front of the pod.
We talk about different ways to AUM gobble. This one is getting into the zeitgeisty part of CRE finance.
Will Krasne (05:23)
is
and we talked about the issues being around origination not so much having the availability of capital because we solved that that's done now unlimited capital one of the areas that has exploded is c pace and this is an environmental loan i'm gonna be totally honest i don't totally understand C-PACE
Hiten Samtani (05:31)
We've got unlimited cash.
⁓
Go Planet! It was basically created to fund green upgrades in buildings. I think it was first used in Berkeley in 2008 to help homeowners finance their solar upgrades. But it quickly morphed into a commercial vehicle as well. It stayed semi-dormant for, God, like a decade. And then the last couple of years, I don't know what happened. This happened with the EB-5 too. Developers just caught on and then it...
absolutely exploded. Of the 10 billion in C-PACE done between 09 and 24, about half of that came in 23 and 24. And then 25 was a record year. The Post Brothers construction package for that office to Rezzi, yeah, that's a 500 millionish Naveen green capital loan. It's all happening.
Will Krasne (06:28)
DC, yeah.
Ares, of course, is looking to put out as much capital as they can in real estate. You've got the debt and brokerage shop, you've got the equity shop, and now you've got a specialty finance shop as well under one roof. This is 300 million bucks. That's not nothing for this. They're going to cover the larger checks. They specifically called out in the article that it was going to focus on like 40, $50 million checks, which are to quote P.E. guy, it's a potential.
Hiten Samtani (06:58)
This has got a lot of regulatory tailwinds as opposed to headwinds in some of these other spaces. All the states are falling over themselves to offer more and more of this. It's gone from doing maybe charitably $50 million deals to three $400 million deals. It's one of those spaces where records are being broken. It feels like every other month.
Will Krasne (07:16)
Almost every big construction project you see has some sort of sleeve of C-PACE financing in there.
Hiten Samtani (07:22)
The way such facilities typically work is the warehouse lender will want a certain hurdle return and then the CPACE provider will pocket any residuals. They make their money on that little spread, whatever's left.
Will Krasne (07:34)
Nice place to be, you got fixed costs.
Hiten Samtani (07:37)
Next one, our boys at SL Green are stepping in as mechanics. So if I were to tell you, that Hyundai bought a building in Tribeca to potentially occupy one day, you want to take a shot at per foot. Obviously, occupiers are willing to pay a little bit more than the rest of us, but what do you think it would go for?
Will Krasne (07:53)
I don't know, 1,100? That's not great.
Hiten Samtani (07:56)
double that.
Hyundai paid 2,500 a foot roughly to Vanbarton, which killed it on this deal for this boutique office building called 15 Late Street in Tribeca. I believe they never ended up occupying it. And so no one in their right mind is going to buy this at 2,500 a foot or even close to it. The Koreans don't love the shame of taking a big realized loss on their books.
Will Krasne (08:19)
To be fair, I don't think anyone really does.
Hiten Samtani (08:21)
Fair, fair, fair. So anyway, they are looking for a capital partner to come in in some capacity. And looks like our boys at SL Green, Harry Sitomer and friends are going in.
Will Krasne (08:30)
a cadet pref.
Hiten Samtani (08:32)
Yeah, my sense is that because Hyundai bought this all cash, there's no debt on this property. So it'll be for a stellar pref or as there's some structure like that.
Will Krasne (08:40)
they're essentially going to be like the GP and operate the property and Hyundai maybe salvages some upside, gets some cash and makes the headline a little bit less painful.
Hiten Samtani (08:50)
One of our sources put it perfectly said, charging fees to Koreans who can't make decisions because of shame is SL Green's specialty. That's it for the punch list. We'll be back in a second to tax the rich.
I'm here with Aaron Krawitz of Bravo Capital. Aaron, $2 billion in deals, 100 % HUD approval rate, five years since launching. How do you keep that streak going? Comes down to our team. Our underwriters know what HUD wants. We're a pure play HUD lender, meaning everything we do and bridge to HUD. No taking shots and just hoping. When we go, we really go. You closed a healthcare HUD express lane deal in four days? Four days? Four days from our submission to HUD's approval.
Will Krasne (09:23)
Who is hiding?
Hiten Samtani (09:35)
goes back to knowing the ins and outs of the program so that there is no guesswork. Sniff's assisted living, feels like such an arcane world full of very complicated regulations and such a specific cast of characters that you really need to know Cole to make this work. Exactly.
Will Krasne (09:49)
We're
steeped in state-by-state regulations and distinction, but we're not about HUD. Very strong, balanced bridge affiliate, Bravo Property Trust. Over 170 million in and 125 million in Brooklyn.
Hiten Samtani (09:54)
We also ⁓
and we just financed out in my
If we have conviction, we move fast. Thanks Aaron. And where can people find you? We're at bravocapital.com
Will Krasne (10:26)
It's not tax day, but we're talking about taxing the rich.
Hiten Samtani (10:30)
The Pied-a-Terre tax is back. It's back with a vengeance. this time it's got support all the way up. It's looking a little scary out there for the Ken Griffins of the world and pretty much anyone who wants to buy a second home in New York.
Will Krasne (10:41)
Let's just say, objectively not scary. If you're rich enough to afford that, who cares? But let's also just say that between the JFK Jr. Carolyn Bessette show and this, it's like a big, big retro New York feel right now. I'm biking in a suit like JFK Jr. Like that's how we're doing it now.
Hiten Samtani (10:58)
Zohran's campaign we've talked about before, the goats of producing social media friendly content. And they dropped this video in which Zohran goes, taps the screen and says, we're taxing it. And apparently this is their most viral video ever. 51 million views as of this recording. A Pied-a-Terre Terra tax, which is essentially a tax on a second home or third or fourth at valued at $5 million or more.
Will Krasne (11:15)
astonishing
or third, or fourth.
Hiten Samtani (11:26)
has, well, I can't tell you, it is hard to overstate how much this thing is loathed by the developer set and the luxury broker set. There is nothing that they hate more than the piano tear attacks. is Voldemort in policy form.
Will Krasne (11:39)
Well, it's been their whole business, right? Let's call it spade to spade. The high end dev market, a lot of 57th Street is not people's primary residence. But yeah, the rare policy from Mondani where I saw people, right-ward people say, you know, I hate to say it, but like, kind of makes sense.
Hiten Samtani (11:54)
We should say that this iteration we don't have any specifics yet. We don't actually know exactly how this Pied-a-Terre Terra version is structured. We have some idea from old ones which we'll get into but we don't quite know how this is going to shake out.
Will Krasne (12:05)
The gist is essentially like, you want to just play the tax game and be 100 and whatever, whatever in Florida, great, do it, but don't pretend to live here. Cause that's honestly, we've talked about the rise of the luxury renter. And part of that is by people who are trying to gain the tax system and not have something on record in New York and avoid the tax man. There's a way to not pay it. It's moved to New York.
Hiten Samtani (12:09)
179 days a year.
Yeah, they've been very clear about that in the messaging, which is this is not a tax on New Yorkers. This is a tax on people moonlighting as New Yorkers, having an investment pad or whatever. The real estate industry's argument is that if you do this, you're essentially penalizing people from investing in the city and it's going to drive more people to Florida. It's to that spiral of New York City, luxury, real estate, et cetera, et cetera. Nothing gives them hives more than this. When this last pop-tap after Ken Griffin bought his $238 million pad at 220.
The New York times had an op-ed called the rich didn't always need $238 million pen houses. The brothers second door for developers of 15 central park West five 20 park.
Will Krasne (13:10)
Bob Diamond just sold his apartment. Hashtag Nell and Teddy. If you know, know.
Hiten Samtani (13:12)
That is correct.
They
went to Albany to campaign against this thing. had their economist feeding stats about how destructive this was going to be.
Will Krasne (13:24)
huge part of the residential development industry the last 15 years in New York has been driven by non-primary home residences. And so if you can't bank on foreign capital taking out your high-end condo project, it's hard to underwrite.
Hiten Samtani (13:36)
especially certain product types. The Gary Barnett is probably more impacted by a Pied de chair tax than let's say a Mickey Nuff dolly.
Will Krasne (13:43)
very well said. And I think it's the projects that are sort of, let's just say, non-economic that are going to struggle the most.
Hiten Samtani (13:53)
Michael Gross called it helicopter people, projects that are built for them.
Will Krasne (13:57)
Yeah,
if you're doing a booty condos and try back up, that's not for this.
Hiten Samtani (14:01)
Should we do a little history lesson here? you. So in 2014, state Senator Brad Hoylman, I forget what he does now. Let's have a little googie here. He is a Manhattan borough president. So when he was state senator, he had introduced this tax. Let's take you back to the era of three men in a room. The governor, the speaker, the Senate majority leader were making all the decisions very clandestine behind closed doors.
Will Krasne (14:02)
So let's go back
Hiten Samtani (14:27)
And this is the era of Cuomo and Sheldon Silver and Skelos Yep. I think it was Skelos and really messy era of government in New York. And so this got killed completely just eviscerated. then Hoylman and a couple of his collaborators in the assembly introduced the bill or a version of it another, what, dozen times? And it got killed and killed and killed and killed. Stabbed, shot, poisoned, frozen, hung, electrocuted and burned. And at the time the structure was something like
If five to $6 million homes would be hit with a half percent tax, anything in the $25 million range would be hit with a flat $370,000 and then 4 % on any value north of $25 million. One estimate peg that this moved would add about $700 million to state coffers.
Will Krasne (15:15)
Not nothing.
Hiten Samtani (15:16)
Rebny came out hard against us. Do you remember this guy, Stevie Spagnola? This is when Rebny had real juice. At one point Spagnola was sitting in the Senate chambers writing pro-industry legislation. We've talked about this, Will. And he called Charlie Bagley of the New York Times brazenly from there. A lot of industry people campaigned very strongly against this.
Will Krasne (15:20)
infamous.
Like we've talked about with the Road to Housing Act, anytime you put uncertainty or add costs into things, it can really put a damper on the market. And these are markets where the marginal buyer is everything, the marginal project is everything. And so if those don't get built, that cascades all the way down. And so it's just adding another reason for people to not want to do business here, which is a reasonable perspective.
Hiten Samtani (15:57)
I absolutely buy that argument. The one I don't buy is that people are shopping between Manhattan and Texas. Or Manhattan and frankly anywhere. What is more likely to happen is they're not going to pull the trigger as opposed to say I'm going to take my five million and go to freaking Dallas. What the hell did I say?
Will Krasne (16:13)
Yeah, so you're going to pay your broker more than the tax to leave and not have your apartment in New York.
Hiten Samtani (16:20)
Do you peek what Steve Roth said when this came out back in 2020?
Will Krasne (16:23)
What do say?
better references Steve. No one knows that you're referring to Animal House. It's just because I'm old. Let's meet the people where they are. But look, I think to New York, there's a lot of problems with New York. The tax issue, everyone will always say, we wanted to see our money get spent more productively. how can you argue against this? It's like a very common sense thing, which is like, if you want to have a fancy apartment, live in New York. And if you're super rich, this is rounding air and doesn't matter.
Hiten Samtani (16:34)
Double secret!
counter argument is why do we keep putting shackles on the free market?
Will Krasne (17:00)
this ends up being like a race to the bottom. The argument a lot of people will make is we should just eventually have no taxes on rich people or any people. They could just go anywhere. yeah, capital is much more fluid than it used to be. We need to reckon with that. You need to make a city hospitable to business. The question is what actually drives jobs? We have to build more housing. That's the most important thing. These things on the margins, it just gets their huckle.
Hiten Samtani (17:06)
I mean, that's what they want. Yeah.
up, right? I think the mayor kind of enjoys that. gets a rush out it. definitely does. if you look at that video, he's got the grin on his face. He's trolling them and it's working. I believe everyone has a role to play in contributing to our city and some a little bit more than
Will Krasne (17:36)
⁓ absolutely is.
Hiten Samtani (17:37)
When
he shot it was he standing outside 220? I think it's shot outside
Will Krasne (17:40)
I
think, yeah. Coming back to the 51 million views. And again, this is not a political statement. He has the juice. Like, you just can't say that he doesn't.
Hiten Samtani (17:48)
Just like Trump has the juice, Zohran has the juice.
Will Krasne (17:50)
Zohran has the juice. To come out against it, he wants you to come out against it. Yeah. Like the right thing to do is say nothing. All these people who are freaking out about it, you're sort of telling on yourself, it's the Streisand, Streisand effect. Steve Roth coming out and saying his like dated references, like that's what he wants.
Hiten Samtani (17:59)
Let's try sound effect here.
This is going to be a particularly tricky one to challenge and here's why. One, it is not a standalone bill. So it's not something you can surgically strike as such. Second, this is buying all the way up to the top. We talked earlier about 2010, three men in a room and Cuomo killed it. think in 2019, Hochu, Governor Hochul is very much on board. And some of her quotes, I think I'd like you to read this one for the record, cause it sounds like it's straight out of Zohran's phrase book. Who said it Zohran or Kathy?
Will Krasne (18:17)
Three men in a room.
There are literally Russian oligarchs buying up properties, driving up the property values. They're all welcome to stay, but I think there's a logic behind them also contributing to the city.
Hiten Samtani (18:40)
Fun times ahead.
So, Will, you violate any dead covenants recently?
Will Krasne (18:53)
So funny you should ask. I have been in technical default recently. I mean, who among us? Right. But not since Q4. Ooh. And that's not because I paid off the loans, because that's when I started using Loan Boss.
Hiten Samtani (19:06)
I can't believe how old school some of our listeners are. They're still crunching DSCRs in Excel and all that.
Will Krasne (19:11)
Total waste of time, risky business to boot. Loan Boss runs the entire process for me. One click covenant testing, incredible. Instant cashflow forecasting, impeccable. And my favorite nerdy delight, the live forward curve. So I hate having to go download the forward curve and then it's always vertical and you gotta alt HVT to have it go horizontal, make sure the index match works, like ridiculous.
Hiten Samtani (19:35)
It just got it sorted here for-
Will Krasne (19:37)
Much better. So thank you, Lone Boss.
Hiten Samtani (19:40)
Listeners, check them out at loneboss.com. That's loneboss.com. And tell them the promo sent you.
Will Krasne (19:54)
One of my favorite things on this podcast is Hiten covering the Frombeat. And man, we have a major, major, major story in that space. Nussbaum-Lowinger files for Chapter 11 bankruptcy.
Hiten Samtani (20:07)
Mark Nussbaum, he's a real estate lawyer, but to call him a real estate lawyer is like calling Robert Moses commissioner of parks. Technically it's accurate, but it's woefully inadequate. guy truly like, if he didn't exist, you'd have to invent him. He was at the nexus of this from deal making ecosystem, which was billions of dollars of real estate trades, finances, et cetera, that are done in this somewhat shadow sphere. And Mark Nussbaum.
was getting a little piece of this, a little piece of that for years, built a really profitable business for himself and importantly for most other people until he did not.
Will Krasne (20:42)
It was like the Hasidic merchant bank, Allen & Co.
Hiten Samtani (20:47)
I mean, I think you're niching down too much. was the Hasidic, the Orthodox, it was the Lakewood crowd, it was the Five Towns crowd, it was pretty deep all over. That's a great way to put it, he was the clearinghouse, yep.
Will Krasne (20:55)
He was the clearinghouse.
If you needed capital, you'd call him. If you had capital and looking for a deal, you'd call him. He'd match make you. do your legal work. He'd help you find the deal.
Hiten Samtani (21:05)
And just like Hyman Roth, he always made money for his partners. That's the important thing here. One by one, friends are gone. Here's what would happen. Let's do a little role play. I've got a $20 million stash of cash burning a hole in my pocket. You, sir, are a dealmaker who needs to buy a multifamily property somewhere in the Midwest. So the way this would work is you would call Mark Nussbaum and say, they're asking for proof of funds. I'm a little late.
get this deal done. Mark would call me and say sure here's some money it's gonna magically appear in Will's account for a time or rather in the escrow account and then Mark Nussbaum is gonna do what he needs to do to put it into Will's account and for my troubles I get paid did you see some of the rates? Be like $700,000 for 30 days
Will Krasne (21:49)
They're insane.
on like not that much money. And I would wager there's probably not a lot of documentation. There's a lot of handshakes, a lot of talking on the phone.
Hiten Samtani (21:56)
It's astonishing.
These
deals are called Heimish deals. Like they're cozy. You know what mean? It's done. You understand. This is fascinating because until this broke, being part of this community was the, how do I say this? The social glue that served as a deterrent for bad behavior. You're part of this community. You go to synagogue with these guys. You go to dinner with these guys. Your kids go to school together. And so you're going to do business over and over. So there was an incentive to play it straight.
Will Krasne (22:28)
whole thing is based on trust. your word is your bond because if your word is bad, you can't actually keep the thing going. Everyone is incentivized to actually live up to what they said because that's how you keep the whole machine moving.
Hiten Samtani (22:42)
Yeah. And so there's two dynamos here. One we've talked about Mark Nussbaum, who is currently, by the way, we forgot to mention facing charges of grand larceny in relation to all this. The other one is no longer with us, but he was a young guy, deal maker called Mendy Steiner. And the central allegation here is that Mark Nussbaum, without his client's permission, diverted quite a bit of money, we'll get into exactly how much in a second, to Mendy Steiner, who then used it for real estate deals and a lot of
fraudulent real estate deals so the money never actually came back. And I'll just give you a sense of scale. The last major escrow fraud in New York, Mitch Kossoff, a real estate lawyer now disbarred, I believe is in one of the prisons somewhere in New York, he allegedly misappropriated about $15 million. The allegations here and according to the disclosures in court and whatnot, we're talking about more than $350 million. It's astonishing.
Will Krasne (23:40)
It really is. It just speaks to one, like how much money there is in this part of the market. One of the theses of the podcast that I think you would have is that that whole section of real estate, which is incredibly under covered, is like the most liquid, the most fascinating. And the dollar amounts are staggering. We talked about it with the sniff deal, Darrell Hagler, and what's his name? Honey. But yeah, $330 million. And that's just like the little pieces that got hung away.
Hiten Samtani (24:01)
It's got
⁓
That never made their way back. a lot of it went to Mendy Steiner. Mendy Steiner at some point owned a multifamily portfolio and this is national. They tend to be concentrated, these guys in Lakewood, Rockland County, Borough Park, but they do deals, they're agnostic about the market. So I think Mendy Steiner owned a bunch of units in Baltimore, other places. Somehow got CNBS financing on some of this portfolio. What does the paperwork look like to get CNBS?
There was something sketchy going on for sure because Mendy, in many cases, as soon as he would take out the financing, he would be in default almost immediately. So there was like no intention of paying back the loan. I don't think anything came out about him inflating purchase prices or anything like that. But yes, there was some kind of weird momentum.
Will Krasne (24:53)
There's definitely a scheme in bond world. They call them NCAA bonds. No coupon at all.
Hiten Samtani (24:59)
Things get heavy now, so listener discretion is advised. Mendy's trying to get a massive refi that will kick the can down the road. He's unable to get this done. And there's a lot of pressure on him. People are starting to ask real questions. Where's the money? Where's the money? Where's the money? And in January of 2025, he checks into the Amman and never checks out because Mendy Steiner killed himself. And right as that happened,
Mark Nussbaum was hit with a major lawsuit from a nursing home investor called Jacob Sod, who we've talked about on this podcast before. And man, from around the time of the suicide, it's just been lawsuit after lawsuit after lawsuit. And the allegations get more and more explosive. Hush money to giant escrow fraud. It's been pretty bad. A few months ago, Nussbaum was charged with a grand larceny.
Will Krasne (25:47)
Some of these creditors are owed serious, serious stuff.
Hiten Samtani (25:50)
Did you see the one from the promotes chart? Oh, yeah. There's an entity called Elizabeth capital. Yeah, there's an entity called Elizabeth capital success. That's owed $156 million. According to the new chapter 11 filing in federal court, according to the assignment for the benefit of creditors, it's an alternative bankruptcy process. And in state court, there's a guy called Sheldon Zephyr. He's a lot of Lakewood. He's owed $149 million. Staggering, staggering numbers.
Will Krasne (25:53)
Yeah.
success.
These people you've never heard of with like the wildest entity names. And they're like, yeah, we just shelled out nine figures.
Hiten Samtani (26:27)
Sometimes
they're hard money lenders. Sometimes they're nursing home guys. Yeah. Have you heard of the legend of Murray Huberfeld?
Will Krasne (26:31)
Sometimes they're hedge fund guys.
Yeah, so platinum partners.
Hiten Samtani (26:37)
Kuberfeld was convicted in a bribery scheme for the correction officers union. exactly? This world is full of circular characters. The latest is that Nussbaum's firms have filed for chapter 11. This overrides any ABC state level proceedings. We took a look in the promote at the restructuring officer. What a fascinating gig. This guy, Ephraim Diamond, has been at the center of the Pinnacle bankruptcy that we talked about. Yol Goldman's bankruptcy.
Will Krasne (26:42)
with our good friend, Jonah Rechnetz.
Hiten Samtani (27:07)
Brookland Capital, which is Boazgielad's.
Will Krasne (27:09)
That was almost quaint by comparison.
Hiten Samtani (27:11)
And Emerald Equity, one of the big fallouts, Isaac Castor from the rent stabilized drama. What a privileged position to be in.
Will Krasne (27:18)
just seeing the craziest shit of all time. don't even know how you begin, like the old golden ones, if you can give like people that need their own episode.
Hiten Samtani (27:25)
Should we commit now on air to do a special episode on Yul Goldman at some point? definitely. Alright, we commit to that. Pinky swear.
Will Krasne (27:31)
Pinky swear. Pinky swear. Hold us to it, people. But just untangling all this paperwork is non-existent in a lot of cases because as we said, this is a high-mission company. So I don't even know how you go about figuring out who's of what and what.
Hiten Samtani (27:44)
That's
why you get paid 35 grand a month,
Will Krasne (27:46)
I mean, that seems low.
Hiten Samtani (27:49)
So you always got to know your audience, right? You got to know how to play to the crowd. so Diamond, he was talking to Ami Magazine, which is a from focus magazine read by a lot of these deal makers or deal makers, should I say in this world. And he said the following on the creditor side, I learned to read the documents carefully. It's kind of like have deal when you read a Gemara or a Roshon. These are things that I believe in the Talmud and you're trying to be Madaic, very exact.
You apply the same kind of attention to detail and scrutiny that you would reading the Talmud to these bankruptcy docs, which honestly, incredible salesmanship there. By the way, only one of us here is Jewish. It's not me. It's so funny.
Will Krasne (28:26)
No notes.
My reform temple didn't prepare me for this.
Hiten Samtani (28:36)
How do we bring the Nussbaum story back? Because it's so sprawling. The numbers keep getting bigger. The cast of characters keeps expanding. How do we kind of tie it all up for the listeners? It's really hard to
Will Krasne (28:46)
It is one of these things where I think that the ripple effects and aftershocks are going to last for years and years because a lot of people and each of these like little funding nodes, whether it's CPACE, whether it's EB5, all of these people are made by these certain things. So there's certain like Mendy Steiner and a bunch of other investors. All of these guys were made through this, either Nussbaum's financing or connections. We're going to see aftershocks for a long time to come in the SNF space, in the multifamily space, in the affordable housing space.
in a lot of these different areas that were heavily impacted by this cast of characters. And you see the center kind of implode on itself. And then the real question is, who's going to be the next one? Because this was a really valuable service. I mean, except for the crime. But who's going to be the next merchant bank clearinghouse?
Hiten Samtani (29:36)
That's a fascinating point. And the other thing about this is he was a very well-liked guy. Apparently great chef. His partner plays a mean sax, Loewinger. When this started getting bad, not as bad as it is now, but when it started kind of going down, people in the community were raising funds to help him out, to fill some of these gaps. So tells you how much goodwill he created by probably making people a lot of money.
Will Krasne (29:56)
The key is you always make money for your partners and if you stop making money for your partners, that's when things go sideways.
Hiten Samtani (30:02)
When the shadow system is this big and a lot of these people scan paperwork, secret partners, someone behind someone else, the source of the money is here and someone else is putting it in. This is just how this world has worked for a long time.
Will Krasne (30:15)
The developer almost never has the money and it's always somebody else behind him or syndicated out amongst a wide variety of people. This goes back to Harry Helmsley taking thousand dollar checks from widows and orphans on syndicated deals across the country. This is just how the real estate game works.
Hiten Samtani (30:30)
If you look at Nussbaum's client list, it's pretty staggering. Joel Schreiber, Moshe Silber, Shy Pricker, at least one of those is a convicted felon. He's been at the center of all of this. And I think that if he gets off lightly, I think that in five years people give him money again.
Will Krasne (30:44)
100 % without a doubt.
you
Hiten Samtani (30:56)
Yalla, how should we start?
So first, let's start. I'm allowed to do that. I'm from Dubai. yeah. come to Dubai.
Will Krasne (31:07)
We've talked about how people are moving to Florida because we're taxing second and third homes in New York and they're all buying condos down Miami way. Except for one site that doesn't seem to be attracting a lot of business.
Hiten Samtani (31:19)
What are you buying when you buy a condo especially in Miami? You're buying a dream.
Will Krasne (31:23)
Let's dig in on that little bit. In Florida, because they have different laws.
I've gotten better at that. But in Florida, there's different rules on like using deposit money or pre-selling condos than there are in New York. So you really are buying a dream in those cases. Like you're buying off of floor plans. You're not buying off of like finished units.
Hiten Samtani (31:41)
Yeah, basically if buyers don't commit, your building ain't going up pretty-
Will Krasne (31:44)
much.
And what we're talking about is the suicide condo, which collapsed in 2021. Horrible tragedy.
Hiten Samtani (31:51)
This is the Champlain Tower South collapse. believe 98 people died. So one of the biggest tragedies in South Florida history, it spawned a bunch of safety regulations that have turned into assessments that is something that market is very much dealing with. And we've talked about this in terms of that whole buyout game that developers are playing in South Florida.
Will Krasne (32:09)
Yeah, because you had older condos which were on land that's incredibly valuable, but the units themselves were dated or needed huge mechanical upgrades or the buildings themselves needed to essentially be raised because they were non-functioning. so Dubai based Damoc, Damoc bought the site of the Surfside condo collapse for 120 million dollars. Yeah, stocking horse bed. They were the sole better too, because I think a lot of folks were really concerned about
Hiten Samtani (32:31)
Stalking horse bit, I believe.
Will Krasne (32:38)
the optics of buying this site, understandably.
Hiten Samtani (32:41)
It makes
sense that no homegrown firm decided to go for this, right? They understand that this is going to be a third rail.
Will Krasne (32:47)
Right. so of course it sells to, how would you describe him? The Middle Eastern Donald Trump?
Hiten Samtani (32:52)
Hassan Sajwani?
In fact, he's good friends with Trump. He showed up to a bunch of the White House events. Dubai guy. Let me just tell you a little story about, which perfectly illustrates him. This is in his telling, so take it with a massive pinch of Tajine. right? So he is in Baghdad studying to be a doctor, right? He doesn't have the best grades. He flunks a couple of years in a row and he's on his way out. He's desperate for another chance.
Somehow, somehow, someone hands him the phone number, the personal phone number of Saddam Hussein, the dictator of Iraq. And Sajwani has the stones to call him and apparently gets him on the phone. It didn't end up working out for him, but he got Saddam on the phone. This is the kind of guy he is. my God. Somehow lands up in development in Dubai, has always been an outsider. Someone like Trump, if you think of the core New York real estate developers, they never really accepted Trump as their own.
He was always a weird guy from the outside and Sajwani has a similar reputation in Dubai among the glitterati developers there. But anyway, he's built a huge business, had a couple of bailouts as well. And his marketing gimmicks very much resemble Trump. I believe he was like raffling off private jets if you bought condos and gives away cars and all kinds of stuff.
Will Krasne (34:12)
So he's like Oprah mixed with DJT.
Hiten Samtani (34:15)
That's the exact way to think about it. I have said to you before, it's one of my pet theses that Miami and Dubai are essentially spirit animals. The Hoi Ploy of Miami and the Hoi Ploy of Dubai live in very similar ways. It's a lot of bling. The two markets where branded condos are the biggest are Miami and Dubai. It makes sense.
Will Krasne (34:32)
It does. And so they buy the site in a vacuum. You would say this is incredible real estate.
Hiten Samtani (34:37)
Yeah,
great site, good price too.
Will Krasne (34:39)
Yeah, good price. But again, there's a reason why related or related Ross or related George Press didn't buy this. And a lot of people wanted it to be a memorial for the folks who perished in the tragedy. And Damoc comes in and buys it. They make it as flashy as possible. They hired Elman. And they're just making these super premium units. I think they start at 15 million. They average between 35 and 40 penthouses that could hit the market for more than 150.
And how many have they sold? ⁓ That's bad.
Hiten Samtani (35:11)
Zero.
so good. The Democs sales executive said, the initial soft launch we did in January 2025 was premature. We also thought the market would pick up after the inauguration of the president.
Will Krasne (35:25)
what's telling too is they talked about how they've had bites on a bunch of different deals and in the article they're just saying we couldn't get comfortable with the source of funding and my god for this guy to say that they're not comfortable with source of funding for the buyer who the hell was
Hiten Samtani (35:42)
Dubai's KYC policies are pretty pretty lax in general. This executive who spoke for the Real Deal article should have been gagged. He should not have spoken because he also said the following. Rosselli also acknowledged that Damakh doesn't have a track record of developing ultra luxury condos in the US. There's a degree of reasonable skepticism, he said. Why is the marketing director saying shit like this? It's crazy.
Will Krasne (36:09)
unbelievable.
Hiten Samtani (36:10)
We should say from a pricing perspective, Surfside has become a pretty frou-frou market. The Four Seasons there, which Ford Partners did, they sold a pad for close to 7,000 bucks a foot. That's like tippy-top Manhattan pricing.
Will Krasne (36:23)
It is for sure. But it's just, again, the depth. It's like every unit starts there. And it's like, need so many people just to this one building. It does seem gauche to want to buy a $150 million apartment.
Hiten Samtani (36:35)
They haven't been able to escape that this is the site of a real tragedy.
Will Krasne (36:39)
You needed somebody local who really understood what it meant to the community and how to work around it. having literally the least local person you could have probably wasn't a great fit.
Hiten Samtani (36:43)
sentiment of the market.
Sajwani is as American as they come in, kind of the brio and the chutzpah that he has. This shouldn't be a surprise, but he's also involved in a data center venture with Trump.
Will Krasne (36:58)
I actually didn't know that yet. Great real estate is great real estate, but execution matters. Marketing matters. Branding matters. And the laws of gravity for supply and demand matter too.
Hiten Samtani (37:00)
Goodbye.
You know how we've talked about launching a new development condo is like an IPO? Everything has to be lined up. The storytelling has to be perfect. And just saying, it was a little premature. We launched, we weren't quite sure. You can't really do that with a condo. You really get one shot to set the perception right. Because if you don't, you end up with a Surfside situation. You end up with a 172 Madison like your Chuck Tesler. You end up with situations where just with a little bit of a sharper execution, you might've had a very different start.
and a start in condo sales can often determine the finish.
Will Krasne (37:41)
All said.
Hiten Samtani (37:47)
That's it for the Promote Podcast this week. Taxing the rich, selling the Miami dream at the site of a tragedy, and escrow fraud. It's all happening.
Will Krasne (37:55)
We'll be back next week with more CRE Insider goodness. Thanks again to our sponsors, Lone Boss and Bravo Capital.
Hiten Samtani (38:01)
You can find them at loanboss.com and bravocapital.com.
Will Krasne (38:04)
Insiders and also non-insiders who want to become insiders check out attends chat with David Lichtenstein on Thursday at 12 p.m. Go to the promote comm slash upgrade and we'll send you the deets. That's 12 p.m. Eastern time
Hiten Samtani (38:17)
It is. Thanks Will for that. You're a mensch. You can have a few of my shuckles for show capital.
Will Krasne (38:21)
Thank you, I always need them.
Hiten Samtani (38:24)
Ciao!