The Promote Podcast

Bluerock's Liquid Death, Soundstage Flops, and OZK Walks the Plank

Episode Date: December 24, 2025
Hosts: Hiten Samtani (“Bard of CRE”) & Will Krasne

Episode Overview

In this insight-packed episode, Hiten and Will tackle three major stories shaping the commercial real estate (CRE) landscape:

• The collapse of Bluerock’s public listing and what it reveals about “mark-to-magic” in non-traded REITs
• The unraveling soundstage investment thesis in Los Angeles, with Hackman Capital and Hudson Pacific Properties feeling the sting
• The ongoing saga of Baltimore Peninsula (formerly Port Covington), including sponsor shakeups, big bank takebacks, and lessons from megaprojects gone awry

As always, the hosts cut through the noise with sharp analysis, insider war stories, and irreverent banter—offering a must-listen guide for CRE insiders and market-watchers.

Key Discussion Points & Insights

1. Bluerock’s Liquid Death: The Mark-to-Magic of Non-Traded REITs

[03:38–11:43]

• Bluerock’s Public Faceplant:

  • Bluerock listed its closed-end “Total Income Plus Real Estate Fund” on the public market, which “traded at a 40% discount to NAV within two days. So wiped out years of gains. This is a great example... Volatility laundering has been a huge concern.” (Will, 03:50)
  • The fund allowed only 5% of redemptions per quarter, but “every single quarter since December of 2022, more than 5% of the shareholders have tried to redeem.” (Will, 06:10)

• What is ‘Volatility Laundering’?

  • Public markets require daily mark-to-market; private funds “basically get to make up your own value once a quarter” (Will, 04:14), creating disconnects: “Private REITs in 2022 and 2023 were down 5%, public comps were down 30%—you’re like, gosh, we just own 25% better assets?” (Will, 04:46)

• Liquidity Issues:

  • As more redemptions flow in, managers have to “sell your most liquid things... eventually you’re left with just fucking mints.” (Will, 06:49)
  • The effect: “People buy these things because they pay good dividends. And so if you cut the dividend, then you have to mark NAV down because that’s obviously a bright red flag. So what you do is you lever up... they kept paying these dividends and then the investors voted for this thing to go public... wiped out years of gains.” (Will, 07:06-07:32)

• Major Industry Implications:

  • This challenge isn’t isolated: “A lot of the bigger names in the industry are facing things—Starwood with SREIT, Blackstone’s BREIT—they had a flood of redemption requests...” (Hiten, 07:43)
  • Underlying issue: “It’s really hard for private market assets to provide daily liquidity... The Cap rate is the inverse of the PE multiple... definitionally it doesn’t generate nearly as much cash.” (Will, 08:53, 11:20)

Notable Quote:

“Private market investing really is... an art. We’re artists. You can’t just go put a formula in and say here’s what all the comps are.” (Will, 09:42)

2. Soundstage Flops: Hollywood’s Real Estate Hangover

[11:43–19:09]

• The Pandemic-Era Bet:

  • The thesis: “Content is king and that needs space, and we’re gonna invest an incredible amount of money in these soundstages.” (Hiten, 11:45)
  • Hackman Capital Partners, with 60+ stages and major LA presence, and Hudson Pacific/Blackstone went all in.

• What Is a Soundstage?

  • Basic definition for listeners: “A place where a production studio will film content... build it once, don’t have to keep building sets.” (Will, 13:12)

• The Downturn:

  • LA soundstage use whammied by “Hollywood strikes, fires, merger activity... cheaper to film these things elsewhere. Rob Lowe said... cheaper to produce his game show in Ireland than LA.” (Will, 13:55, 14:01)
  • “Production of film and TV programming in 2024 that cost over $40 million... was down 30% from 2024 to 2022.” (Hiten, 14:33)

• Debt and Restructuring:

  • Hackman faced trouble on $1.1bn loan from Goldman after acquiring CBS Studios space for $1.8bn: “Pacman didn’t pay it off when it came due...” (Will, 15:04)
  • “Netflix in exclusive discussions to buy Warner Brothers... whoever buys it... not lease as much space.” (Will, 15:22–15:31)

• HPP’s Woes:

  • “Victor Coleman’s total comp in 2024 is $25 million... HPP lost $364 million.” (Hiten, 16:03–16:22)

• Industry Narrative Inertia:

  • Once invested around a thesis, hard to pivot: “If you are a private fund manager... the decision... was made upstream of you... your job is not to decide yes or no.” (Will, 17:18)
  • New risks not priced in—AI, strikes, contraction, etc.

Notable Quote:

“Deploying capital at scale in real estate really is about... thesis-driven investing. The problem is when that thesis is flawed, you end up in a situation like this.” (Will, 18:35)

“As William Goldman said: Nobody knows anything.” (Hiten, 19:05; Will echoes, 19:09)

3. OZK Walks the Plank: Megaprojects and Lender Retribution in Baltimore

[19:27–27:52]

• Shakeups at Baltimore Peninsula:

  • “The Baltimore mega project, artist formerly known as Port Covington, now Baltimore Peninsula, going through another shakeup.” (Hiten, 19:28)
  • “Mag Partners have been asset managing along with McFarlane Partners. Victor McFarland is winding down the firm.” (Will, 19:44)
  • Contract expired, Hines stepping in as new asset manager.

• Development Partnership Turmoil:

  • “Kevin Plank, founder of Under Armour, and Goldman Sachs Urban Infrastructure Partners... an interesting JV.” (Hiten/Will, 20:24–20:27)
  • Plank forced to sell off assets (“probably never made a red cent... selling pretty much everything because Under Armour stock is down 75% over the last five years.” Will, 21:01–21:18)
  • Giving back big land parcels to Bank OZK: “Bank OZK just did a take back seize in Chicago at Lincoln Yards as well...” (Hiten, 21:24)

• Themes and Takeaways:

  • Pattern: “Massive urban redevelopment projects sponsored by local guys with deep pockets... a lot of them are kind of debacles.” (Will, 22:03–22:25)
  • Common mistakes: Try to leave a legacy via huge development, but “development is hard.” (Hiten, 22:41)
  • Need: Not just money and political juice, but “you need the wealthy private guy to stay wealthy... and the underlying value of the land to continue to compound.” (Will, 23:13–23:51)

• Lender Dynamics & Market Caution:

  • “This is an interesting and probably worrying trend for the boys from the Prairie—[OZK has] taken back [Lincoln Yards], they've basically walked away from NY ground up for now.” (Hiten, 24:44–25:10)
  • “Ozk, they were so early post-GFC to come back into construction lending when it appeared really risky... they made so much money.” (Will, 25:39)

• Baltimore’s Uncertain Future:

  • Current state: “You have 1.1 million square feet. Great. Pretty big. Not very well leased, not great connectivity... The rest of that parcel, is it going to get built? Who knows?” (Will, 26:42)
  • The house-of-cards risk for megaprojects: “If you only have little pieces of them activated, it's not enough momentum to... make everything sing.” (Hiten, 27:13–27:30)

Notable Quote:

“It’s Baltimore, gentlemen. The guards will not save you.” (Will, 27:13)

“Let’s see if Hines can come in and resurrect this. But right now it looks like the founder of Under Armour might just lose his shirt.” (Hiten, 27:52)

Notable Quotes & Memorable Moments

• On Private Real Estate Valuations:
  “The number is the number. And if you’re in the private markets and you get to make up your own value... you can basically say our value is 100, 100, 100, 100. And then meanwhile the assets, if you were to trade them actually are like 70.” (Will, 04:24)

• The Illiquid Chocolate Box Analogy:
  “Did you ever have those Merci or Quality Street chocolate boxes? You keep taking the good ones, and then eventually you’re left with just fucking mints.” (Hiten, 06:49)

• Soundstage Bubble Burst:
  “This whole thing was, well, content is king and that needs space. And we’re gonna invest an incredible amount of money in these soundstages... It’s been a bit of a journey.” (Hiten, 11:45)

• Victor Coleman’s Pay vs. Performance:
  “Victor Coleman’s total comp in 2024 is $25 million…they lost $364 million.” (Hiten, 16:03–16:22)

• Megaprojects and Legacy:
  “Very wealthy, influential person wants to leave a physical legacy on the place they’re from. They think, well, the best way to do that is do a fricking giant development. But again, as we’ve said before, development is hard.” (Hiten, 22:25)

Important Segment Timestamps

• [03:38] – Deep dive: Bluerock’s public blowup, “volatility laundering,” and non-traded REIT ecosystem
• [11:43] – State of LA’s soundstage market, Hackman and Blackstone’s pain, and the soundstage investment bubble
• [14:33] – The ripple effects: Production down, debt headaches, asset write-downs in media real estate
• [19:27] – Baltimore Peninsula: Sponsor shakeups, Bank OZK’s big move, megaproject risks
• [20:24] – Under Armour’s rise and fall as anchor, and sponsor implications
• [27:13] – Megaproject “momentum,” or lack thereof: Why bits and pieces don’t add up

Final Thoughts & Tone

Packed with inside-baseball insight, sharp economic analysis, and classic Promote banter, this episode is equal parts cautionary tale and industry pulse-check. From the risks of illiquid “mark-to-magic” to the perils of thesis-driven megaprojects and Hollywood hype cycles, Hiten and Will offer seasoned, sometimes acerbic, always honest guidance:

“Reshaping a city for anyone not named Steve Ross is harder than it looks. And soundstages have gone from investment darlings to boondoggles. But hey, baby, that’s just pictures.” (Hiten, 28:08)

For CRE insiders, this episode is a roadmap to the current turbulence—and a reminder: “The game is the game.”