The Promote Podcast

Episode: Fugazi First Positions & Cracking Billionaires' Row
Date: October 29, 2025
Host: Hiten Samtani ("A") & Will Krasne ("B")

Episode Overview

This episode of The Promote Podcast digs into three headline stories shaking up commercial real estate (CRE):

• Major fraud at regional banks Zion Bancorp and Western Alliance, raising new alarms about systemic risks in CRE lending.
• Walmart’s unexpected new strategy: buying entire shopping malls for urban growth.
• Fresh allegations and ongoing engineering drama at 432 Park Avenue, one of Manhattan’s “Billionaires’ Row” supertalls.

With their trademark mix of war stories and sharp analysis, Hiten and Will go deep into each topic, connecting the latest scandals and strategies to big-picture trends shaping how money moves in CRE.

1. Bank Fraud in First Position: Zion Bancorp, Western Alliance, and the Hidden Dangers in CRE Lending

[00:53 - 13:13]

Main Points:

• Zion Bancorp and Western Alliance, both regional banks vital to CRE markets, revealed they had been duped via fraudulent title reports and cross-collateralized loans, totaling at least $60 million in losses for Zion alone.
• The scam: Sponsors (notably "Mom Ca Invesco," backed by individuals with ties to both the properties and the “nanobank” lenders) produced fake title reports to obscure the fact that first-lien positions were already encumbered.
• Classic red flags surrounded the deals, including aggressive leverage, related-party lending, and even the use of armed guards in a partner dispute.

Key Discussion Points:

• How the fraud worked: Sponsors faked title reports, making lenders appear to have first claim on properties that were in fact already pledged elsewhere. (“The only way around that is if there’s another bank ahead of you that you didn’t know about because the sponsor showed you a fake title report...” – Will, [02:25])
• Why it unraveled: Infighting between the sponsor partners led to lawsuits and public court filings, exposing the fraudulent structure.
• Systemic Implications: These stories highlight how crucial regional banks are to “real economy” lending for CRE and how such instability can ripple across the market.
• Vibes and Contagion: Will and Hiten stress how much CRE is affected by “vibes” — if enough people fear a banking crisis, it becomes self-fulfilling:
  “If enough people who are important say that the house is on fire, the house actually catches fire.” (Hiten, [07:13])
• Regulatory Fallout: The hosts point to hard lessons from Dodd-Frank and warn that headline fraud often leads to sweeping regulation, making business harder for small banks but not necessarily “fixing” the system.
• The “Mom and Pop” Reality of CRE: Despite the sky-high values and glamorous towers, much of CRE is financed in a surprisingly unsophisticated, relationship-driven way, “the largest and most important mom and pop business there is.” (Hiten, [08:29])

Notable Quotes:

• “This one’s kind of a riddle wrapped in an enigma wrapped in a bunch of fraud.” (Will, [02:10])
• “[Banks] are really regulated, but individual loan transactions aren’t necessarily super well diligence. … If you’re a $7 billion market cap bank, you should be able to know if someone else has primed you.” (Will, [09:39])
• “If you’re committing fraud, don’t take each other to court. It’s like Stringer Bell: you taking notes on a criminal fucking conspiracy. What the fuck is you thinking, man?” (Hiten, [05:44])

Memorable Moment:

• Will tells the story of a “draw request” email during the Great Recession, simply stating “need a million dollars to pay bar tab” — and the bank sending the money, no questions asked ([09:09]).

2. Walmart’s New Move: Buying Malls to Crack Urban Markets

[14:28 - 19:30]

Main Points:

• Walmart is pivoting from merely leasing big-box space inside malls to outright owning whole malls, spending $100 million+ this year.
• The strategy: sidestep local opposition and planning headaches by buying out malls wholesale (e.g., Monroeville, PA), enabling them to “curate the experience” and introduce multi-use formats (Walmart, Sam’s Club, bowling alleys, entertainment).
• This approach echoes luxury trends — high-end brands buying their way into “retail control,” but now at a populist, Walmart scale.

Key Discussion Points:

• Why Buy Malls?: In affluent or urban areas, public opposition often thwarts Walmart’s attempts to enter. By buying malls outright, Walmart bypasses zoning fights and controls a large, consolidated site.
• Retail as Real Estate: Will underscores how every top retail story is ultimately a CRE story:
  “Every business story is a real estate story. Because Walmart, where are they going to grow? They have to have more penetration. That’s the way for them to grow.” (Will, [18:46])
• Broader Trend: The Walmart play mirrors moves by luxury conglomerates (like LVMH or Prada) buying-up flagship retail spaces in cities like Manhattan and Beverly Hills to fully curate the space.
• Modern Mall Redesign: New Walmart projects aim for a “curated retail experience” — less a classic mall, more a mixed-use, entertainment-centered hub.

Notable Quotes:

• “Buy the whole damn thing.” (Will, [16:36])
• “The bowling alley is a Walmart equivalent of the LVMH handbag.” (Will, [17:28])
• “Walmart is a logistics behemoth … Now they’re sort of doing that on the real estate side as well.” (Will, [19:06])

Memorable Moment:

• Hiten reminisces about his Appomattox, Virginia ex-girlfriend’s hometown, where the highlight is Walmart, not Civil War history: “The entire life of that town is … the Walmart.” ([14:28])

3. Cracks in the Sky: 432 Park Avenue’s Supertall Saga

[19:30 - 29:49]

Main Points:

• 432 Park Avenue, once the Western hemisphere’s tallest residential tower, is the epicenter of a dramatic legal battle. The condo board alleges the developers (Harry Macklowe & CIM Group) concealed serious structural defects — actual cracks in the façade — to avoid jeopardizing property values.
• The allegations include “deliberate and far-reaching fraud,” notably the use of a special white concrete sealant, chosen mainly for aesthetic purity (to match Macklowe’s racing yacht), but which may have compromised integrity.

Key Discussion Points:

• Building’s Infamy: 432 Park, critiqued as “the one where the architect admitted it was inspired by a trash can,” has a long, storied history of engineering snafus and resident complaints ([19:55]).
• Mom-and-Pop Mentality at the Top: Despite billion-dollar values, major NYC developers often run projects with small-operator discipline and cutting-corners when payments come due.
  “This is the quintessential mom and pop operation. Harry Macklowe.” (Hiten, [20:41])
• Nature of Super-Talls: Once you go above 40 stories, “every one of these towers is a prototype,” with unpredictable engineering risks. Tiny design/manufacturing changes cascade into unique problems ([26:49]).
• Façade Fiasco: Macklowe insisted on a pure white “yacht gloss” look, leading to a compromised concrete recipe sealed with materials intended for boats, not skyscrapers — a major risk.
• Legal and Systemic Issues: The diffusion of responsibility in huge tower projects leaves ownership entities with limited accountability. By the time defects emerge, the original developer has often exited, leaving owners (“Mezz Owner 4 LLC”) with no recourse ([28:52]).

Notable Quotes:

• “The quote was deliberate and far-reaching fraud by not disclosing cracks in the facade that could pose real structural dangers down the road.” (Will, [22:43])
• “He wanted the building to be pure and he wanted it to be a certain color... He had seen it and he was very intimately familiar with this color because it is the color on his racing yacht Unfurled.” (Hiten, [23:21]; [24:02])
• “Once you get over 40 stories, every one of these towers is a prototype. You don’t have repeatable results because the shape of the building changes the performance.” (Will reading from consultant, [26:49])
• “The people who put up the buildings are not accountable for their quality. As long as problems don’t crop up before they unload the property, they can do whatever they want.” (Hiten reading advisor quote, [28:33])

Memorable Moment:

• The saga of using yacht-sealant on a supertall, and Will’s deadpan: “Sailing in the Adriatic is like similarly challenging as building a super tall.” ([24:26])

Timestamps — Key Segments

• 00:53 – 13:13: The Zion & Western Alliance bank fraud saga
• 14:28 – 19:30: Walmart’s mall-buying playbook
• 19:30 – 29:49: The never-ending drama at 432 Park Ave and the risks of supertall development

Episode Tone & Style

The conversation is insider-y, humorous, and direct — trading reminiscences about “bar tab” million-dollar loans, skewering CRE’s “mom and pop” realities, and poking fun at billionaire developers’ quirks. The hosts blend technical finance analysis with sharp skepticism and a taste for the absurd.

Final Thoughts

Through colorful examples and vivid language, Hiten and Will show how CRE can be both shockingly informal and a minefield for lenders, developers, and residents alike. Whether you’re an industry veteran or curious outsider, this episode offers a sharp look beneath the glossy brochures — with no shortage of scandal and schadenfreude.