The Promote Podcast

Episode: Brookfield's $10B YES! & RXR's OPM Masterclass

Date: October 1, 2025
Hosts: Hiten Samtani & Will Krasne

Episode Overview

This episode of The Promote Podcast delivers a deep dive into three transformative stories in the commercial real estate (CRE) industry. Hiten and Will analyze Brookfield’s $10 billion acquisition of YES! Communities, explore RXR’s innovative Project Gemini as a case study in fee generation and fund structure, and discuss a landmark office-to-residential conversion in Wilmington, Delaware, offering a lens into CRE strategies beyond major gateway cities.

1. Brookfield’s $10B Bid for YES! Communities and the Rise of Alternative Institutional CRE

[01:21 – 10:23]

Key Points & Insights

• Deal Summary:

  • GIC, Singapore’s sovereign wealth fund, looks to sell YES! Communities (manufactured home portfolio) to Brookfield for ~$10 billion—potentially one of the largest real estate deals by a sovereign wealth fund ever.
  • YES! Communities was assembled post-recession by Stockbridge, initially sourced from Warren Buffett's Clayton Homes, sold in 2016 for $2B with GIC and an unnamed global LP. Stockbridge remained as a minority stakeholder (~25-30%).

• Institutionalization of "Alternative" Asset Classes:

  • Manufactured homes, marinas, and data centers were once overlooked but are now institutional mainstays due to their sticky tenant bases, appealing supply/demand characteristics, and scalable investment potential.
  • "Every single asset class and property type that is now considered institutional wasn't at one point." — Will [03:48]

• Comparative Advantage:

  • Unlike prime multifamily (e.g., Blackstone & Air Communities), YES! Communities focuses on the heartland, providing affordable housing—attractive for institutional capital due to scale and necessity.
  • “Now you’re putting this institutional cloak on them and thereby they get a lot richer.” — Hiten [03:28]

• Financing Innovation:

  • Liquidity from agencies (Fannie Mae/Freddie Mac) helped drive institutional appetite for manufactured homes.
  • Fannie’s $1B loan on YES! was a catalyst for further cap rate compression and institutional acceptance.
  • "That’s really all due to the availability of debt…this is all a spread game." — Will [07:32]

• Stockbridge’s Big Win:

  • Expected to realize a "mid-nine figure" promote after 5x equity growth over nine years.
  • “They cashed out a bit, but they stuck around…freaking hell, man. They did amazingly well…” — Hiten [02:32, 08:25]

• Brookfield’s Strategic Move:

  • Diversifies away from struggling offices/malls into stable, cash-flowing, affordable housing.
  • “If you’re betting on housing in-affordability, income inequality—what better asset class…than this?” — Will [09:22]

Notable Quotes

• Hiten: “You need to be putting money to work at serious scale. And it’s hard to do, as you’ve talked about, before in office. You can’t throw $5 billion into the office market as easily anymore.” [03:17]
• Will: “There’s no such thing as too much promote.” [00:15]
• Will: “Marinas…They’re not making any more waterfront. Same dynamics as mobile homes. Really hard to build, sticky tenants, and hard to roll up at scale.” [05:53]

2. RXR’s Project Gemini: The OPM (Other People’s Money) Masterclass

[11:32 – 23:57]

Key Points & Insights

• Project Gemini Overview:

  • RXR launches a $3.5B “office venture” vehicle (Gemini Office Venture) by pooling equity stakes from Liberty Mutual, King Street, Baupost, etc., and rolling in prime NYC assets:
    • 590 Madison (IBM Tower)
    • 1211 Avenue of the Americas (News Corp HQ)
    • Starrett-Lehigh building in Chelsea
  • Includes both discounted/distressed purchases and self-owned assets.

• GPonomics—Structuring for Fees:

  • Discussion centers on the modern GP’s (general partner’s) business model: raising, managing, and layering fees, not just asset performance.
  • “Your product isn’t the deal—your product is the capital that you raise.” — Will [12:51]
  • Multiple fee streams: Asset management, property management, leasing, construction management, and project management fees—all as profit centers.

• Innovative Vehicle Structure:

  • Vehicle designed to appeal to legacy/family-owned office landlords facing capital-intensive upgrades and tax bills. Contribute buildings into the fund and diversify risk with professional management.
  • “This is a playbook that’s been done a lot…It’s not unique in real estate, but it is unique it’s applied to office in New York, which I think is actually really, really smart.” — Will [19:09]

• Potential Upside and Exit Paths:

  • Base case: modest risk-adjusted yield via leasing and stabilization.
  • Upside: Manhattan’s best office (single malt buildings) see renewed demand, setting up major equity multiples (2.5x in 3-5 years speculated) and possible public market exit.
  • “If things continue, they could make a 2.5x in 3 to 5 years. Make a massive return and a massive promote.” — Will [21:48]
  • Downside protection from premium sponsorship, operational depth, and diversification.

• Why RXR?

  • Scott Rechler’s “all-time top tick” sale of Reckson to SL Green (for $6B right before the last recession) cements RXR’s credibility.
  • RXR’s flexibility as non-REIT, smart use of white papers, and web of relationships (Fed board, Port Authority, etc.) set them apart.

Notable Quotes

• Hiten: “Sometimes the money is made no matter what happens to the deal, right? … construction management fee, acquisition fee, asset management fee. People like Tides and Rise did very well even if projects didn’t.” [16:47]
• Will: “If you give [your building] back, in a lot of cases, you fully depreciated it. So you’re…staring down the barrel of a massive depreciation recapture tax bill in exchange for giving it back for no cash.” [17:58]
• Hiten: “Of all the players in the market, what is it about RXR that enabled this?” [22:46]

3. Wilmington, Delaware: The Case Study in Office-to-Resi Transformation

[24:07 – 32:32]

Key Points & Insights

• Project Summary:

  • BPG (Boccini Poland Group), Wilmington’s largest property owner, secured a $100M loan (Apollo, Pearlmark, Octagon, S&T Bank) to continue converting the sprawling Dupont headquarters complex (acquired piecemeal from 1999-2017) from office to residential, making it one of the largest such financings in the city.

• Local Legacy, Long-Term Vision:

  • Mixed-use campus development has revived downtown Wilmington, resembling Dan Gilbert’s efforts in Detroit.
  • Long-term commitment, understanding the local market, and willingness to accept moderate short-term returns for transformative city-building.

• Execution & Financing:

  • BPG proves viability with strong leasing data (2,500 units at 96% occupancy) and successful earlier conversions, attracting Tier 1 creditors—even for a secondary market.
  • “If you’re an operator who knows how to do it, you can get Apollo to come down here and take the lion’s share of this loan.” — Will [27:56]

• Incentives & Replicability:

  • Leveraging historic tax credits and local incentives, BPG unlocks value that doesn’t pencil in crowdier markets like NYC.
  • Illustrates the critical importance of basis, supply constraints, and local operational expertise.

• Brokerage Angle:

  • Morris Betesh (Arrow) emerges as a specialist in arranging mid-market construction debt in non-core markets—a lucrative, under-served niche.

Notable Quotes

• Hiten: “You’ve got to be able to bet long-term…if you can get in at a low enough basis, the rewards can be amazing.” [26:47]
• Will: “If you’re building a campus and you just do one thing, it doesn’t work. Everything has to be additive and build upon itself. You need to create the full 360 lifestyle to make it work together in concert.” [31:17]
• Will: “This is probably the biggest construction loan in the history of Wilmington, Delaware. And he got it done with some brand name lenders in the capstack.” [32:05]

4. Memorable Moments & Additional Notables

• Fee Layering in Modern CRE:
  Extended riff on how GP’s convert overhead into profit centers [13:21–14:10].
• “Single malt buildings”: RXR’s focus on the top-shelf of office product, differentiated from commodity assets [21:26].
• On the Institutional Cycle:
  “You need to do office to mobile home bar conversions in tertiary markets and structure it to get all of the construction management fees. That’s the key.” — Will [32:49]

5. Timestamps for Important Segments

| Segment | Timestamp | |---------------------------------------------------------------------|--------------| | Brookfield’s $10B YES! Communities deal & institutional shifts | 01:21–10:23 | | RXR’s Project Gemini, GPonomics, fee structures | 11:32–23:57 | | Wilmington: Office-to-resi conversion & local execution | 24:07–32:32 | | Broker profile: Morris Betesh (Arrow) | 31:48–32:15 | | Final takeaways and end-of-show riff | 32:32–33:42 |

6. The Promote Podcast Tone and Style

• Informal, fast-paced, and insider-focused.
• Laced with humor, war stories, and vivid analogies (“single malt buildings,” “fee up and continue being on the offense,” etc.).
• Straight talk—no pandering, heavy on actionable insight.

7. Recommended for Listeners Who Want:

• Deeper understanding of how institutions are shifting capital into "alt CRE"
• An insider’s take on modern fund structures, promote math, and GP fee mechanics
• Why local context and operator expertise remain critical even for mega-deals
• Competitions and dealmaking go far beyond the headlines

Notable Quotes in Context:

• “There’s no such thing as too much promote.” — Will [00:15]
• “If you’re a real estate GP…your product isn’t the deal. Your product is the capital that you raise.” — Will [12:51]
• “You need to do office to mobile home bar conversions…structure it to get all of the construction management fees. That’s the key.” — Will [32:49]

For CRE professionals, deal junkies, or anyone interested in the intersection of real estate, finance, and market strategy, this episode offers a sharp, irreverent, and information-rich perspective.