The Promote Podcast

Episode: Reston Peace, Senioritis & A Capstack Crisis

Date: November 12, 2025
Host: Hiten Samtani
Co-host: Will Krasne

Episode Overview

In this week’s episode, Hiten Samtani and Will Krasne deliver an insider’s perspective on the latest drama and dealmaking in the Commercial Real Estate (CRE) world. The conversation navigates through three headline stories: Blackstone’s senior housing misadventures and fire sales, a high-stakes Brooklyn condo saga, and Boston Properties’ (“BXP”) strategic asset sales to fuel Manhattan’s supertall ambitions. The discussion is packed with lively banter, industry war stories, sharp analysis, and colorful behind-the-scenes context.

Key Discussion Points & Insights

1. NYC Mayoral Shake-Up and CRE (00:03–01:16)

• CRE’s Reaction to The New Mayor:
  Discussion opens with industry response—heavy on the drama and “predictably unpredictable.” Notable incident: CRE exec Scott Panzer’s inflammatory social media post comparing the winner, Mamdani, to Hitler, which led to his firing and further industry handwringing.
  Quote:

  “He basically compared Mamdani to Hitler and then was fired and then people got mad at JLL for letting him go…no upside.” – Hiten Samtani (00:24)

• Market Worries:
  Hosts underline broad industry fears about a “democratic socialist” running America's key “capitalist city.” Still, they urge pragmatism over hysteria.

2. Senior Housing: Blackstone's Big Misses & Sonida/CNL Merger (02:13–12:28)

Blackstone’s Fire Sale (02:31–08:42)

• Failed Playbook:
  Blackstone’s usual “buy it, fix it, sell it” formula didn’t pan out; instead, their $1.8B bet floundered in a tough “buy it, it’s more broken, sell it at a loss” outcome.
• Operational Complexity:
  The sector is uniquely challenging, operationally intensive, and requires specialized expertise past traditional real estate know-how.
  Quote:

  “You’re buying an apartment inside of a hotel, inside of a restaurant, inside of a medical clinic.” – Matt McConkey of Turnbridge Peak, relayed by Will (05:54)

• Covid Fallout:
  Pandemic tanked occupancy and sent staffing costs spiraling. Even as demographics are said to guarantee a “silver tsunami” of demand, market cycles and operational hurdles keep the business risky.
• Strategy Pivot:
  After replacing operator Brookdale with regional specialist partners, Blackstone ultimately cuts losses, selling assets at steep discounts—creating prime opportunities for others.
• Market Impact:
  Blackstone’s macro decision to exit becomes a “micro opportunity” for well-positioned buyers (e.g., Isaac Toledano’s 75% off Miami deal).

Sonida & CNL: Consolidation and Complex Structuring (08:45–11:45)

• Big Merger:
  Conversant Capital-backed Sonida is merging with CNL Healthcare Properties to create a $3B player in senior housing.
• Key Players:
  Mike Simonovsky (Conversant) is steering the deal, wielding industry experience from various large residential and industrial REITs.
• Creative Deal Structure:
  The merger uses an “asymmetric collar” to manage risk/reward—downside capped at -15%/upside at +30% relative to a reference price, giving more certainty to CNL shareholders.
  Quote:

  “Structure is alpha. It’s not just CIM who says that.” – Will (09:34)

• Charting Control:
  Sonida takes the reins regardless of where the price lands.

Senior Housing's Repeated Turmoil

• Cyclical Challenges:
  Despite occasional booms, sector is riddled with bankruptcies, restructurings, and private takeovers in distress.
  Quote:

  “You can operate them well and still get annihilated if you time the cycle wrong.” – Will (11:30)

• Leverage Trouble:
  Recurring problem with heavy floating-rate debt loads (e.g., Blackstone’s experience).

3. Brooklyn’s Biggest Bet: 205 Montague & The Quest for Financing (13:33–23:42)

The Project’s Background

• Site Primer:
  205 Montague is a prime Brooklyn Heights parcel, assembled by the Carey family in 2010, long expected to host something spectacular.
• Developer:
  Jonathan Landau, ex-Fortis Property Group, steps in aiming for a record 47-story condo tower on a stitched-together ~500,000 sq. ft. site.
• Market Context:
  Brooklyn Heights is “toniest neighborhood,” with huge demand, celebrity cachet (Matt Damon, Paul Rudd, Amy Schumer).

Financing Headaches & Cap Stack Drama

• Origination:
  Original construction loan from now-defunct Signature Bank, eventually acquired by Rialto, who took a much harder tack with borrowers post-takeover.
• Borrower Pushback:
  Joe Carey accuses Rialto of a “sinister veto pocket scheme” to stall project extensions (18:15).
• Capital Stack Rollercoaster:
  • Bank OZK (famous NYC construction lender) originally offers $245M senior loan, then backs out last minute (19:47).
  • Northwind Group (Ran Eliasaf) steps in with ~$100M land/predev financing: “Not the cheapest, but he might be the quickest.” – Hiten (20:33)
  • King Street (RXR’s Gemini deal partner) brings $90M of mezzanine, with Atlas Capital adding $60M of preferred equity (21:04).
• Expensive Paper:
  Rates: Mez at 12–15%, Pref at 18%.
  Quote:

  “That is so much mez. Oh my God.” – Will (21:04)

• Equity:
  Carey family rolls in their land equity (~$30M).
• Outcome:
  Project still not fully funded—“filling these holes in the cap stack” is a universal developer struggle, regardless of size (23:04).
• Viability:
  Will: “It’s sort of binary—like you get this thing done or not... But then One Clinton, like, lost a bunch of money directly up the street” (22:49).

4. Boston Properties (“BXP”): Reston Peace, Strategic Legacy Sales (24:09–31:12)

Reston Town Center: A Massive 40-Year CRE Bet

• Project Background:
  BXP’s Reston Town Center, brainchild of Mort Zuckerman, is a multi-decade planned community outside D.C. with over 5M sq. ft. built and another 4M sq. ft. in the pipeline.
• Recent Sale:
  BXP recently sold two apartment buildings (“Signature,” 500 units each), fetching a regional record—teasing $240M at ~$470K per unit. Bought by Sterling (NYC) & Simpson Housing (Denver).

Why Sell? Reinvesting in Manhattan Super Talls

• Strategic Shift:
  BXP refocusing capital on Manhattan high-rise mega-projects like 343 Madison; sales in Reston provide “dry powder.”
• REIT Dynamics:
  The hosts explain that as BXP’s shares trade below NAV, selling mature assets (instead of issuing new equity) to fund development is the smartest, least dilutive path for a REIT.
  Quote:

  “The whole REIT game is really about are you trading above NAV or below nav… If you’re below nav, you don’t want to ever issue stock. So sell stuff down, buy back your own stock or do your own projects.” – Will (28:42)

• Active Pipeline:
  By 2027, BXP aims to sell ~$2B in legacy assets to bankroll development.

Market Observations

• Pricing Power:
  Control of neighborhood supply lets BXP set price records in regional sales.
• Buyers:
  Simpson—a little-known giant—shows how much of the apartment market is controlled by “quiet” institutions.

Notable Quotes & Memorable Moments

• “Is that a breaking a hip joke, or what?” —Hiten (02:53), during banter about senior housing.
• “You’re buying an apartment inside of a hotel, inside of a restaurant, inside of a medical clinic.” —Matt McConkey (05:54)
• “Honestly, it’s like great-looking fundraising: hey, we’re not perfect. We made a mistake, but we didn’t try to fight it.” —Will (07:52), on Blackstone’s asset sale.
• “Structure is alpha.” —Will (09:34)
• “That is so much mez. Oh my God.” —Will (21:04), on Brooklyn Heights’ complicated financing.
• “No one would be in this business if they weren’t sick in the head. And the good thing about real estate is there’s always someone who wants to do it.” —Will (23:25)
• “It’s a great time to be doing renderings, but we’ll see if he can actually get it built.” —Will (23:49)
• “If you control basically all the inventory in that area, you are the price setter, right.” —Hiten (27:44)
• “The whole REIT game is really about are you trading above NAV or below nav.” —Will (28:42)

Segment Timestamps

• NYC Mayor & CRE Fallout: 00:03–01:16
• Senior Housing: Blackstone’s Exit & Sonida/CNL Merger 02:13–12:28
• Brooklyn Heights 205 Montague: Ground-Up Drama & Cap Stack Crisis 13:33–23:42
• Reston Town Center Sale & Boston Properties Strategy 24:09–31:12

Episode Takeaways

• Senior Housing remains full of both peril and promise: operational complexity and market cycles make for tough outcomes—even for CRE juggernauts like Blackstone.
• Complex Deal Structures and creative financing are essential (and often make-or-break) for the industry’s boldest projects; both cautionary tale and inspiration for deal junkies.
• Prized Legacy Assets are being spun off—even at top valuations—to fund tomorrow’s skyline-shaping megaprojects.
• Market Cycles & Political Winds weigh heavily on CRE’s biggest players, from local politics to macro capital flows.

For more CRE war stories, inside baseball, and deal drama (with snark and authority), subscribe to The Promote Podcast and newsletter at thepromote.com.