Savills Gobbles Eastdil & Ray Washburne's Second Helpings

Summary

Podcast Summary: The Promote Podcast

Episode: Savills Gobbles Eastdil & Ray Washburne's Second Helpings
Date: March 18, 2026
Hosts: Hiten Samtani (A), Will Krasne (B)

Episode Overview

This week, The Promote Podcast dives deep into two blockbuster stories shaking up the Commercial Real Estate (CRE) world:

• The high-stakes, $1.1 billion acquisition of Eastdil Secured by UK-based Savills, analyzing what it means for both firms and the broader CRE brokerage landscape.
• A colorful profile of Dallas dealmaker Ray Washburne, his audacious style, and his plans to develop a marquee hotel near the Dallas Convention Center. The hosts deliver sharp analysis, memorable anecdotes, and the inside dope on the power players and power moves reshaping the market.

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Key Discussion Points & Insights

Punch List: CRE News Rundown

(02:04 – 10:06)

Private Credit Goes Mainstream

• Private credit, formerly "shadow banking," has become integral to CRE, especially after post-recession regulation constrained banks.
• Big debt funds (e.g., Apollo, Athene) are aggressively lending, with anecdote about Athene blasting cash like "a T-shirt cannon at an NBA game" ([02:53] B).
• JP Morgan starts marking down private credit loans, raising alarms for back leverage in debt funds. "If back leverage gets harder to come by, then front leverage gets a lot less attractive." ([04:01] B)
• Potential asset value markdowns threaten equity returns and CRE deal structure.

Build-to-Rent “BTC” Bill Drama

• Recent legislation (referred to as “BTC”) sparks confusion. The Senate-passed bill threatens new home construction incentives by mandating for-sale conversion after seven years.
• "No one's going to build non-attached townhomes, because you just can't for build to rent. And that's been a huge amount of the new home construction in the United States." ([05:39] B)
• Likely legislative changes ahead, but uncertainty clouds homebuilding and CRE investment strategies.

Mortgage Fraud Crackdown Stalls

• Ongoing “fugazi purchase” scandals involving fraudulent property sales and inflated loans in New Jersey stall due to dysfunction at the U.S. Attorney’s office ([07:24] A, [07:34] B).
• Memorable, biting quip: "One way to avoid seeing more than one cockroach is if you stab your own eyes out with a spoon." ([07:24] B)

Ben Ashkenazi’s Beverly Connection Deal

• Ashkenazi sells Beverly Connection mall to Cedars-Sinai for $270M, far above appraised value.
• Key lesson: Sometimes it’s about finding "the one of one buyer" whose needs render comps irrelevant ([08:34] A, [08:59] B).
• Retrospective: Ashkenazi sets both the high and low ends of the market simultaneously in LA ([09:39] B).

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Main Story 1: Savills Acquires Eastdil Secured

(11:06 – 25:11)

The Deal at a Glance

• Savills buys Eastdil for $1.1 billion—a landmark deal giving the British firm major US/Capital Markets clout ([11:17] A, [11:54] A).
• Sellers Temasek and Guggenheim (bought in at ~$400M in 2019) get a profitable exit, aided by a capital-light business model ([12:05] B – [12:18] A).

Eastdil’s History Mirrors CRE's Institutionalization

• Founded 1967 by Ben Lambert, Eastdil has passed through various conglomerate, Japanese, and bank ownership phases, culminating in its management buyout in 2019 and sale to Savills ([13:07] A).
• “Tracing the arc of Eastdil’s deals is akin to tracing the arc of institutional CRE. They’ve been involved in everything.” ([12:18] A)

Why Savills? Why Now?

• Eastdil sought a $1.6–2B exit (4–5x 2019 value), but settled for 2.5x at $1.1B—reflecting brokerage's inherent lumpiness and “broker-rich” volatility ([15:34] A, [16:01] B).
• Savills gets big-ticket US transaction expertise, sticky client relationships—if they can retain the key rainmakers.

The Golden Handcuffs Problem

• Temasek and Guggenheim have short lockups (12–18 months) but the top Eastdil talent face lock-ins of 4–6 years ([16:24] A).
• "Now you just can't leave. ... Having a currency is really important for M&A." ([16:54] B)
• Retention is everything: “Your product walks out the door every day.” ([16:17] B)

Inside Look at Eastdil’s Business Model

• Eastdil’s revenue collapsed 50% between 2021 ($862M, ZIRP boom) and 2023 ($367M, market slump).
• Capital markets/M&A is lumpy, so Savills and rivals are chasing recurring revenue streams like property and facilities management ([18:02] A, [18:18] B).
• Memorable quote: “Isales are sexy… But if you look at the big dogs… capital markets is a small chunk of the pie.” ([18:02] A)
• Data insight: Eastdil’s average loan arrangement is a whopping $225 million; productivity per broker among the industry's highest ([19:32] B).

Will the Rainmakers Stay?

• Succession drama looms: “A lot of soul searching among the Will Silvermans and the Gary Phillips and the Grant Frankel’s of the world...” ([21:29] A)
• Poaching season is coming as competitors look to lure disgruntled stars.

Transparency—A Rare Glimpse

• SEC filings reveal a $195M special incentive package paid to retain key people—a move to keep “the business you’re buying from walking out.” ([22:43] B)

Contextualizing the Deal

• $1.1B matches TPG’s buy of DTZ in the Cushman & Wakefield superbroker saga; echoes JLL’s $1.8B HFF acquisition.
• “Rory Marches are out and Simon Shaw, the former accountant, is in.” ([24:39] B)

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Main Story 2: Ray Washburne – The Last Great CRE Cowboy

(26:30 – 36:20)

Who is Ray Washburne?

• Legendary, “dying breed” Dallas dealmaker, restaurateur, risk-taker, and man-about-town ([26:57] A, [26:44] A).
• “Balls out, pulls off these audacious deals, does it all over again, risks everything and makes things happen.” ([26:57] A)

The Dallas Convention Center Play

• Washburne owns the former Dallas Morning News HQ, adjacent to a $3.5B convention center expansion.
• He bought the property in 2019 for ~$28M, later leveraged politics and the specter of a “giant data center” to force the City’s hand—doubling his money when the City paid for half the parcel ([27:37] B).
• “He invoked the boogeyman. … The City figured out their problems and came. Came Quick.” ([27:57] A, [28:08] A)

Mythmaking & Legendary Deals

• The hosts delight in Washburne’s self-mythologizing and the CRE industry’s need for larger-than-life personalities.
• “It’s one of these guys where he’s not lying, but it’s also not really the truth… We need more of this. This is what real estate used to be based on.” ([28:40] B)

The Highland Park Village Coup

• The center of Dallas wealth, owned for decades by the Miller family, gets scooped up by Washburne through a combination of fortuitous eavesdropping and brash, last-minute financing ([29:47] A).
• Story highlights:
  • He hears through a waiter the property is for sale: “I call him over… Are you selling?” ([30:33] B)
  • Secures a handshake deal; the financial crisis makes debt impossible. Miller family agrees to an $80M, 2% seller note; Washburne scrounges up the rest through Dallas insiders ([33:06] B).
  • “You can marry more money in a minute than you can make in a lifetime.” ([33:44] B)
  • After a period of neglect, massive reinvestment increases sales tenfold, validating Washburne’s bet on ‘luxury asset’ comp logic ([34:40] B, [34:43] A).

Lessons from Washburne’s Career

• The audacity to risk everything by leveraging personal networks and creative finance distinguishes the legends from the corporates.
• “The balls it takes to go ask for a 2% seller note for $80 million on this asset… and then the risk appetite… to go get 15% paper for another $80 million.” ([35:36] B)
• The hosts salute Ray Washburne for embodying the old-school, high-stakes, relationship-driven style of dealmaking.

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Notable Quotes & Memorable Moments

• On private credit's proliferation:
  “Athene is like the people at the NBA games with a T-shirt cannon that is cranked up so high that they can get to the fans sitting high up in the $5 seats. Except Athene is blasting out bundles of cash.” – Will ([02:53] B)

• On brokerage business volatility:
  “This is not a business that's going to trade mid-high teens. And it also doesn't really trade at book value because it doesn't have any assets other than people. Your product walks out the door every day.” – Will ([16:01] B, [16:17] B)

• On Washburne's myth-making:
  “It’s one of these guys where he’s not lying, but it’s also not really the truth… This is what real estate used to be based on.” – Will ([28:40] B)

• On trophy assets:
  “At the very tippy top of the luxury market… they're only competing with each other. They're not really competing with the local market.” – Hiten ([34:43] A)

• On CRE risk and dealmaking:
  “It’s not just seeing, like, what's there. It's seeing what it could be and knowing you can get there and levering up everything you can to get there.” – Will ([35:45] B)

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Important Timestamps

• [02:04] – Punch List: Private credit, BTC bill, mortgage fraud, Ashkenazi’s deal
• [11:06] – Savills-Eastdil: Breakdown of the transaction and backstory
• [16:24] – Golden handcuffs & retention stakes
• [18:55] – Eastdil’s revenue model and market cycles
• [21:29] – What happens to Eastdil stars post-sale?
• [22:43] – SEC reveals $195M retention package
• [23:41] – Broader context of big brokerage M&A history
• [26:30] – Ray Washburne: From restaurants to Highland Park Village to downtown Dallas
• [29:47] – Inside the Highland Park Village acquisition saga
• [33:06] – Washburne’s creative financing
• [34:43] – Lessons on luxury, risk, and value-creation

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Tone & Style

As always, Samtani and Krasne bring vivid storytelling, irreverent humor, and deep market savvy, sharing “insider for insiders” analysis with memorable industry folklore, scathing wit, and a healthy dose of CRE mythmaking.

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For More

Sign up for The Promote newsletter at thepromote.com for further insider stories, analysis, and breakdowns.

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This summary captures the full range of high-level insights, inside jokes, and the vibrant personalities at play in CRE this week, making it essential reading for busy insiders and curious outsiders alike.

Transcript

[A]

So who do you want to play? The CEO or the receptionist?

[B]

I'll be the receptionist. Okay.

[A]

So I'm Simon Shaw, the new CEO of Savills. I've just struck the biggest deal of me life, the acquisition of Easter. As I was coming down here to do this, one of our receptionists said,

[B]

simon, you look a bit peaky. I know people really come to this podcast for the accent work, so, you know, happy to do it justice.

[A]

And I said, well, actually, I am a bit knackered.

[B]

Strap in, chap.

[A]

Welcome back to the Promote Podcast, your insider guide to the money and mania of the CRE markets. I'm Hatan Samtani.

[B]

And I'm Will Krasny.

[A]

A shout out to our sponsors loan boss, the best in class, cre, Debt

[B]

management software, and Bravo Capital, a leading HUD and bridge lender.

[A]

This week, we dive deep into the M and A deal. That's all anyone in institutional CRE can talk about. Savills. Yep. Savills is buying east, still secured for $1.1 billion. Now, this gives the Brits some serious capital markets firepower stateside. But the devil lies in the details of the golden handcuffs. Next, we strap on our Lucchese boots and head to Dallas, where legendary dealmaker Ray Washburn has grand plans for a convention center. Washburn's the kind of CRE cowboy that we're obsessed with here at the Promote, so this is going to be a good time.

[B]

If you remember from the Thanksgiving mailbag that I did solo, he was my wild card pick.

[A]

Oh, yeah, that's right.

[B]

Real Housewives of cre. So I've been waiting to do this story for quite some time.

[A]

Amazing. Let's do it.

[B]

Before we get into the punch list, our signature rundown of the newsiest news and CRE. If you're going to be in Nashville on March 26th, look us up. We will be speaking at the PREA Research Conference, and we'll be the handsome guys on stage. So come say hi.

[A]

We'll be talking about the art of storytelling and its growing importance in the GP toolkit. Expect a lot of references to Sweaty John Gray. All right, let's go with the punch list.

[B]

Let's start off with private credit, where every story is. What is it? My wife asked me what private credit is the other day, so I know it's really breaking through.

[A]

Do you remember when it used to be called shadow banking? Now it's become mainstream.

[B]

Everything is the Winnie the Pooh meme where he's with no pants and then wearing a tuxedo so that's basically what this is, a downstream impact of the banking reform post recession, where banks had much more capital regulations. Dodd Frank caused them to have to hold more stuff on their balance sheets. They had to market differently, risk was different.

[A]

We've talked about how private credit is now the banking system, at least as it pertains to cre. Right. Most of what we see out there is driven in some form or the other by these big debt funds that have popped out.

[B]

Absolutely. It's really the entire funding system for the whole alternative space writ large. I literally got a text today. I'm going to read this.

[A]

Let's do it.

[B]

Riveting. PodC. I continue to be impressed by just how cheaply Apollo will lend construction debt in order to hit their deployment targets. Athene is like the people at the NBA games with a T shirt cannon that is cranked up so high that they can get to the fans sitting high up in the $5 seats. Except Athene is blasting out bundles of cash.

[A]

Oh my God. That is absolutely incredible. Kudos to whoever that is. But why are we talking about this right now? JP Morgan has started marking down loan portfolios of certain private credit groups. Been primarily private credit loans made to software companies, but could potentially spread to asset backed loans as well.

[B]

It's going to Jamie Dimon, the cockroach comment.

[A]

I shouldn't say this, but when you see one cockroach, there are probably more.

[B]

But if this gets into the software space, there's the famous quote that all the podcasts had going around from Bob Smith 10 years ago, saying that software contracts are better than first lien debt. What we're learning is that they're not. They're extremely not. And what JP Morgan is doing is basically saying that we're going to mark your collateral, like for real, for what we think the value is worth. And that just means that they're going to be able to borrow less moving forward.

[A]

So this has implications basically for back leverage. Right. Which is how a lot of these debt funds make all of this work.

[B]

Yeah. And if back leverage gets harder to come by, then front leverage gets a lot less attractive.

[A]

So a debt fund will go out and do a $270 million construction loan, but they typically do not hold that 270 million on their books. They then go and get back leverage from one of the traditional banks for a large chunk of it.

[B]

Think of it this way. If you are borrowing a construction loan like so for 270, that's not an acceptable return for the annuity athene that they're paying, you know, or a lot of these places they go borrow money on a warehouse line more cheaply and earn a spread because again, they're selling money. And if your money gets more expensive to sell at the front part of that chain, it ripples all the way through. And eventually what it means is that a lot of the equity stuff can't work anymore.

[A]

Next one. We talked a week or so ago about the dreaded btc. It is now passed. It is now law.

[B]

Well, Hatan, I'll give you some grace for not having to watch. I'm just a bill on Capitol Hill in the US education system. It is not law. It is extremely not law.

[A]

Oh, fuck. My bad.

[B]

It's okay. It's passed the Senate. It's now going to the House. There's a couple of outcomes here which are One, the President just makes the House Republicans eat the bill as it is.

[A]

Yep.

[B]

I think that is probably unlikely given the thin majority in the House, given how great everything else is going and how much political capital he's got. Everyone in the Senate, even those who. A lot of folks who voted for this bill have huge problems with it and recognize that part of what's in here, specifically the for sale provision that we mentioned last week, the one that

[A]

basically in seven years you've got to

[B]

offer up this property, you have to sell it. But the problem is is that like a lot of these are zoned on one plat. So if you have a property that you got to sell in seven years, you then have to go re plat it. Yeah. To every individual. Like how is this going to work? It's absolute nonsense. And what it means effectively is that no one's going to build non attached townhomes because you just can't for build to rent. And that's been a huge amount of the new home construction in the United States. And obviously new home construction is like one of the backbones of the US economy. So that goes down, the economy goes down. So a lot of ripple effects there. Anyway, we'll see what happens in the House. It's been signaled by Steve Scalise and I always get this guy's name right. It's not French fry banking services guy. French Hill. There we go.

[A]

Perfect legislator name. Absolutely perfect.

[B]

They've signaled significant opposition to the bill and it's going to go into conference in all likelihood. My educated guess on what's going to happen is this will get changed in the dark of night because no one wants to be seen as coming out for private equity. But today I am still just a bill.

[A]

Next one. So we've talked a lot in the promote about this sprawling case of mortgage fraud. There is a lot of borrowers out there who bought a certain property, made a fugazi purchase of that certain property with a related party, and took out an inflated loan on it and pocketed the proceeds. A lot of mortgage firms, appraisers, brokerage firms have been enmeshed in the scandal, and we've seen some actual convictions play out. Specifically, New Jersey and Lakewood, New Jersey has been a hotbed of some of this activity, and we've seen a number of people go to prison for this. For a while, though, we haven't seen any activity. And you wonder, hey, as you said about the cockroaches, you see a couple of these, you would expect more and more. However, there's been so much dysfunction in the U.S. attorney's office in New Jersey that they haven't been able to bring too many more of these cases.

[B]

One way to avoid seeing more than one cockroach is if you stab your own eyes out with a spoon. So that's sort of what the New Jersey Attorney General's office has done.

[A]

All right, next one billionaire. Massive air quotes from both of us here. Ben Ashkenazi sold a Beverly Connection, which is a popular mall in LA, to Cedars Sinai for $270 million. That's a pretty big price tag for something that was appraised at a lot less than that recently.

[B]

There's a couple of interesting takeaways here because everyone listening to this podcast, I'm sure, has heard wallet maturities or appraised values are slash and this, that and the other. And again, appraisals 99% of the time, they come in at the purchase price. Which makes sense because if there's a buyer and a seller and a market, that's the price. That's what it's worth, is what someone's willing to pay. That's what Ayn Rand told back in the day before she died penniless. This property had been troubled for a while. Ashkenazi had a big CBS loan, had been in a workout forever.

[A]

And more broadly, Ashkenazi had quite a few troubles in his large retail portfolio.

[B]

He's had a lot of troubles. This thing got. He had like 210 million in debt on it, 170ish was part of CNBA and Workout Forever. Appraisals came in at sub 200 and it traded for $270 million.

[A]

The big takeaway here was finding the one of one buyer. You think of what Sotheby sold that site on the Upper east side, their former headquarters to Weill Cornell for an insane price. I think $1,000 plus a foot. And it's because Weill Cornell was really just needed it for its campus expansion. So comps were kind of irrelevant. A.B. rosen did the same thing with the Bloomberg at 980 Madison. I think they paid as built $4,700 a foot.

[B]

That's exactly right. And it can only really happen in gateway markets and good locations. A lot of these things like don't trade on cash flow. No one makes real cash flow from the trophy office or the trophy retail. It's like an NFL team. You make the value on the residual going up. You find someone who is not going to underwrite it. They don't need to make an irr. They may not even be underwriting owner occupancy. If they're buying it for some other reason other than irr, they are able to pay something that makes no sense to you but can make tons of sense to them.

[A]

Ashkenazi, we should say, has been having quite a run in la. He recently bought the former Neiman Marcus site in Beverly Hills for $50 million from the carcass of the Sachs bankruptcy.

[B]

I love when the same guy is setting the high and low end of the market at the same time. So good for billionaire Ben Ashkenazi.

[A]

Good for Big Ben. All right, that's it for the punch list. When we come back, Saviles eats Eastil. Will, you've worn many hats in your glorious life so far. Pro baseball player, thespian, tornado remediation specialist. I want to ask which was your least favorite?

[B]

The first two. Ugh, they were dreams. The third was a nightmare. Turning into a dream though. However, if you asked me a few months ago, I would have said Excel Monkey was my least favorite. Modeling out the debt tab was really really annoying. Maturity dates, extension options, rate caps.

[A]

Ugh.

[B]

My spreadsheets were beautiful. But at what cost?

[A]

Sounds like you had good roi, but your ROIBD return on invested brain damage, not so good. So what changed?

[B]

I discovered Loan boss. All my loans live on one screen, no more. Let me just pull that up while I jazz hands a capital partner. And the extension option tracking with automatic notice reminders. I used to have a post it note on my monitor for that. A post it note? A 10. But the one click DSCR testing every lender adjustment, every unique requirement. Automated. Oh my God.

[A]

No more getting surprised by your own capstack listeners, check them out@lone boss.com, that's lone boss.com and tell them the promote sent you.

[B]

So the big news in CRE that you had a lot of the inside deal numbers and a lot of the commentary. So why don't you take us through Savills? First of all, they are studly.

[A]

I will stick with that forever studly till you die.

[B]

But Savills buys Eastil, the number one investment bankers in real estate.

[A]

The number one, or maybe the only investment bankers in real estate. This was a massive M and A transaction. We knew that Eastl had been courting buyers for a while. Temasek and Guggenheim had back to management lent buyout in 2019, which meant that the legend Roy March, Mike VK and a bunch of other senior executives took control of the company from Wells Fargo. And we knew that there was an exit kind of coming. It finally happened. But it happened with a very unlikely buyer. Saville's out of London.

[B]

Yes.

[A]

And they're paying $1.1 billion, which is. There's a couple of things to think about there. One, it's a very nice exit for Temasek and Guggenheim, who I think bought in at a roughly $400 million valuation.

[B]

A lot of times when people talk about, oh, they made quite a bit of money on their exit in real estate, they do this a lot too. Yeah. You got to figure out like, what did you put in along the way? What did you have to invest beyond this? My guess is that this is a pretty capital light business.

[A]

My understanding is they didn't really have to. Once they did that 2019 transaction, Eastel kind of hummed along. We obviously had the pandemic and then the recovery from that. It's not like Eastil was a cash starved business that needed a lot of financial love. What we should say about ISTIL specifically? There's a couple of things. One, I think that tracing the arc of estil's deals is akin to tracing the arc of institutional cre. They've been involved in everything. You take the Blackstone EOP lbo, the largest in history at the time. You take the Anbang deal to Waldorf with Blackstone. You take any of the mega transactions that you think about when you think about big ticket deal making in cre, likelihood that Eastill's involved is pretty high.

[B]

And Easterl's corporate history, I think sort of mimics real estate's institutionalization over time as well. Founded by Ben Lambert, legend, absolute legend in the business.

[A]

Very comfortable kind of buying and selling pieces of the company as the markets moved. 67 Ben Lambert founds this company, which is the first ever real estate investment bank. It's a subsidiary of Eastman Dillon Union Securities. A few years later he sells it to Payne Webber. In 1980, he buys it back. In 1986, he sells half of it to the Japanese. In 1994, he buys that stake back. In 1999 Wells Fargo acquires a majority interest. And then Wells Fargo in a few years kind of smushes together secured capital in Eastil, which makes estill secured. In 2019, Roy March, who is now the alpha dog, leads a management led buyout and it's a $400 million valuation. Then Lambert dies in 2021 and in 2026 we are at the Savills transaction.

[B]

It's actually really helpful because you start off with the conglomerate era where for whatever reason like Disney was into master plan community development or Sun Oil had a master plan community arm or everyone.

[A]

Or like the Japanese bought a studio, right?

[B]

Yeah, several. For whatever reason. And then it's okay, that's done. And then the Japanese come in, then that's done. And then banks want to get into real estate, so they come in.

[A]

I was listening to Roy March. Excellent inter with Roy talking about his career. We'll put it in the show notes but Roy said that at one point BofA was looking to buy east still and kind of make it its real estate ibank.

[B]

It makes a ton of sense. Real estate's the largest asset class in the world. And I think something we'll get into as part of this discussion is you don't have to put a lot of capital into it and a lot of this becomes stickier revenue maybe.

[A]

Before we get there, let's talk about this last buyer. So Guggenheim and Temasek deep pocketed Asian capital in Temasek, which is Singaporean state controlled entity and Guggenheim, which is your boys.

[B]

Guggenheim, one of the most eminent names in finance in New York, basically creating this full service investment bank. They brought in Alan Schwartz, used to run Lehman, played baseball at Duke. Todd Boley was there before leaving to establish Eldridge.

[A]

Jonathan Goldstein was there for a hot second. He now runs Cayne International, teaming up with Vladdy all over the place.

[B]

Yeah, Kane International owned by Eldridge, they do a lot of really creative stuff. And then Temasek, who most famously bought Pierpoint in the recent season of Industry. Yeah, they paid 400 million for it. Two and a half X in six years with I presume some pretty nice dividends along the Way like not a bad outcome. Not what it could have been though. I think they were trying to get

[A]

more when the Bloomberg story broke that they had hired BDT and msd. Guys, change your name. It's a terrible name. When they had hired BDT MSD to shop, Esto executives were teasing a valuation of 4 to 5x what it was in 2019, which means 1.6 to $2 billion is kind of where they hope to end up. But brokerage is a tough business. We always say brokering is a great business. To be a broker can be an incredibly lucrative profession. But broker rich is a tough business.

[B]

It is. And then multiples reflect it. This is 10 times EBITDA. That's the type of business it is. This is not a business that's going to trade mid high teens. And it also doesn't really trade at book value because it doesn't have any assets other than people.

[A]

What's that whole chestnut about going up and down? Whatever your talent walks in and out,

[B]

your product walks out the door every day. It's also really. It's going to be lumpy. It's going to follow the real estate cycle to a certain extent.

[A]

Let's talk about the disparity in the lockups here. So Temasek and Guggenheim are actually going to be released. As in they can basically cash out within 12 and 18 months. Their lockups expire. However, when you dive into the filings, you realize that the talent, like the rainmakers who essentially make Eastile, they're locked in. Dude, they're here for four. Well, technically the fourth, fifth and sixth anniversaries of the deal closing. That's when they fully vest or when their lockup ends. They've got pretty serious golden handcuffs here.

[B]

Now you just can't leave. They do. And I think it's also interesting that obviously private is taking a lot of public stock. One, that's very tax efficient, so people want to do that. But two, having a currency is really important for M and A. That's one of the reasons why people go public.

[A]

You made a good point about how Newmark and Cushman and the likes can kind of juice comps with stock. Right. That was the big competitive advantage they had over an East Dill which has lost a lot of people to those kind of companies.

[B]

Right. But with that comes a nice stock award you got there. It'll be a shame if you left and something happened to it.

[A]

Exactly. So here, Saville's stock. You know it's not Amazon.

[B]

No, no.

[A]

It's Been it's kind of been going nowhere for the last year or so and it's about a third off its late 2021 highs. The upside is kind of iffy.

[B]

Yeah, but what you're trying to do is you're trying to shift the revenue mix because if it's harder to grow revenue, you want to create a higher quality of revenue. And that's what the multiple you trade on. That's how it increases. We talked about capital markets. That's really where all of these folks want to go. They want to go to recurring services and they want to go to stuff that's less one off than sales. Isales are sexy. They get the book written about you.

[A]

Yeah, that's the stuff which creates the myth. Right. Like John Gray cutting Roy March's hair in the boardroom right after the EOP transaction was consummated. That's the stuff that makes you a rock star. But if you look closely at the big dogs, cbre, jll, et cetera, Capital markets is like a small chunk of the pie.

[B]

They want services with long term contracts that they can count on and recur.

[A]

So property management, facilities management consulting, that kind of stuff.

[B]

That's been the whole first services Collier's playbook. That's why that company's worked to a greater extent than some of these lumpier earning companies. The revenue tells it all. 2021 they did $862 million of revenue.

[A]

This is the ZIRP era. Everything is happening right in the market.

[B]

And then in 2023 they did 367. So I mean you're talking about 2 year greater than 50% revenue decline with nothing else changing. Risk is your stability of cash flow. And these businesses definitionally are pretty lumpy and don't have that much stable cash flow.

[A]

Eastill secured specifically because it's always dealt with known for kind of larger transactions. In general, it's known for big ticket M and A and that kind of stuff disappeared for the most part in that two or three year period. Now it's very much back now. They've made quite a run of it. They're number one on M and A advisory. They've been all over the data center game obviously as well. They did the Blue Owl $18 billion financing for that Oracle data center.

[B]

The new CEO Mike VK, I think really tried to call this out. A debt placement for Eastl is now 42% of revenues.

[A]

That's a big, big ratio. It is. 42% is a very, it's stark.

[B]

Well, here's what really blew me away, their average loan arrangement was 225, $225. That is staggering. And I'll tell you too, they talk about productivity per employee. He's still sort of top of the marks in that or per capita productivity. Like that's why you don't need 10 times as many employees to arrange a $225 million loan as you do a $22.5 million loan.

[A]

There are a couple wild cards here though, because you just mentioned Mike vk, who's a Drexel Burnham alum, long time, he's still stalwart. I think when secured capital came in the mix, he became part of the executive team, very well regarded in the industry. But what is funny to me that not once in the earnings call, which had on the dais the Saville, Simon Shaw, aforementioned Mike VK and the new CFO of Savills, Roy March was not mentioned once. Roy March, absolute industry legend, CEO of Eastl for 20 odd years. Is this like his riding into the sunset moment or is he going to, quote, stay involved in deals? As some people at EASTIL have been

[B]

saying, if you've got the legacy clients, you still service them. Take them to lunch, take them on

[A]

the boat, take them to Davos in the desert. We should take a minute to just step back and appreciate. Can you imagine how much juice Roy March probably has a lot. Kings and queens kind of juice.

[B]

Just go read Liar's Ball. That just tells you the juice that Roy Marsh had at his pomp. He was up there.

[A]

He was up there. He had the swagger. One of the things that Savile's trying to buy here is this direct C suite relationship. And Roy's the kind of guy who could be like, oh Yeah, I sold MBS's father that portfolio 20 years ago. Let me make that call. Right? And if you don't have him in the mix day to day, I wonder if that has the same heft. But we'll see.

[B]

And I think though too, it's tough to have that kind of guy as the CEO or public face of a public company.

[A]

He's too larger than life. It doesn't quite work.

[B]

Yeah, it just doesn't work. And that's not any shot against him because he's got the talent of brokering. He's up there with anybody. But that's a different talent than like making a public stock go up.

[A]

And so now he still is kind of in two businesses, right? It's in the talent retention business. In the next six Months, a couple things are going to happen. There's going to be a lot of soul searching among the Will Silvermans and the Gary Phillips and the Grant Frankel's of the world. Should I stay here? Can I see enough upside to kind of ride this out? And there's also going to be a lot of poaching conversations happening with the newmarks and the CBREs, et cetera because they're going to look to pick off Talent Walker Dunlap. Absolutely.

[B]

The stock too, it is golden handcuffs at some point but like if the stock doesn't perform, people don't give a shit as much about the stock.

[A]

A couple more interesting nuggets that came out of the filings mana from heaven for us because normally you don't get this kind of visibility into a private company like Easto. Especially a company like is still like if you try to figure out who the top brokers are at Easto, it's actually very hard to do compare that to like a Newmark, CBRE, etc. Where they're in the hierarchy of the commercial observer story. It's very clear. But at Eastel it's just the deal was brokered by istelsecured and so it's hard to put all this together. One that jumped out at me was There was an $195 million special incentive package once the sale process started maybe a year and change ago, they started giving out cash incentives and bonuses and retainers to a lot of their top people.

[B]

This is part of making the residual value and the multiple higher. Because if no one's locked up, then what are you buying? You're buying like cool business cards. That's really about it.

[A]

You know. I have a Roy Hilton March business card in my cardboard box. Oh, that's sick.

[B]

That's what you're buying. So it makes sense to do that. And again when they talk about the transaction, Savills don't worry about that. That amortization over four years, we got that covered. Yeah, we got that covered. But that's a way to make sure that like you're buying something that's sticky is to have those guys stick around and you gotta make it worth their while. $48 million a year is not nothing. What's their EBITDA?

[A]

The other thing to think about put the East Still Savills deal in the context of the broader brokerage M and A that's been happening. So the 1.1 billion price tag coincidentally is exactly what TPG paid for DTZ. The opening salvo in the super brokerage formation of Cushman and Wakefield. A couple of multi billion dollar deals that went into that, eh, hasn't worked out too well. In fact, TPG said they're going to piece out of that investment.

[B]

TPG's got other things to worry about. The other one that we have to mention and close to my heart because they did a lot of hotels back when I was a young pup doing hotels and if anyone has any swag from this company, please send it to me.

[A]

I'm curious now, what are you talking about?

[B]

Hff man, Holiday, Finaglo and Fowler. JLL bought HFF and for 1.8 billion and change.

[A]

Something like that.

[B]

Loved HFF. It's funny, if you see JLL guys who wore HFF, they're still like, yeah, we're HFF.

[A]

Like yeah, like Chris Beck and those guys. I think a couple of them are listeners actually. So shout out to them.

[B]

Obviously Barry Gosin built Newmark differently. Like really just sort of grave dancing carcass shopping.

[A]

Robin Ellis notably was one of them. Then he bought Berkeley Point for close to 900 million. And then he just said, all right, Howie Lutnick's going to give me all the money I need. And then he just went poaching. It was poaching season right there. Parmen Spies, Jonathan Firestone from Eastil, who's basically their co head of debt and kept going.

[B]

It mimics the equity side of the business where he used to have the cowboys like the guy we're about to talk about next who's one of a dying breed. And now it's just all these corporate behemoths that are publicly traded. Rory Marches are out and Simon Shaw, the former accountant is in.

[A]

Simon, you look a bit peaky.

[B]

I said, well actually I am a bit knackered.

[A]

She said, strap in, you got another day of it, mate.

[B]

Foreign

[A]

I'm here with Aaron Crowitz of Bravo Capital. Aaron, $2 billion in deals, 100% HUD approval rate. Five years since launching. How do you keep that streak going?

[C]

Comes down to our team. Our underwriters know what HUD wants. We're a pure play HUD lender, meaning everything we do is HUD and bridge to hud. No taking shots and just hoping when we go, we really go.

[A]

You closed a Healthcare HUD Express lane deal in four days. Four days.

[C]

Four days from our submission to HUD's approval. And it goes back to knowing the ins and outs of the program so that there is no guesswork.

[A]

Sniffs Assisted living. It 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.

[C]

Exactly. We're steeped in state by state regulations and distinctions. But we're not just about hud. We also have a very strong balance sheet. Bridge affiliate, Bravo Property Trust. And we just financed over 170 million out in Miami and 125 million in Dumbo, Brooklyn. If we have conviction, we move fast.

[A]

Thanks, Aaron. And where can people find you?

[C]

We'[e-mail].

[A]

So I gotta confess, before your extraordinary mailbag, I did not know who Ray Washburn was.

[B]

That's what I'm here for, is to broaden everyone's horizons for lunatic real estate GPs. So I gotta say, I was fired up about this in the news.

[A]

This guy's such a character. I loved reading about him.

[B]

Yeah. So this segment ostensibly is to talk about Ray Washburn wanting to build an $800 million hotel near the Dallas Convention Center. But. But it's not really about that, really. It's just an excuse to talk about Ray Washburn.

[A]

What a cowboy, incredible career. We wax eloquent about this dying breed of dealmaker who goes. Just goes balls out, pulls off these audacious deals, does it all over again, risks everything and makes things happen. Who's my Miami guy that I'm thinking about?

[B]

McDonald.

[A]

Sofer. So Donald Sofer, my guy in Atlanta, Tom Cousins. This breed of dealmakers is going extinct. And we're so glad we have someone like Washburn in the mix. All right, so what's happening here? Dallas's convention center is getting a three and a half billion dollar upgrade expansion, as a lot of these convention centers across the country are doing. And Ray Washburn wants to take a chunk of it. He owns what, the Dallas Morning News former plant or hq.

[B]

So he bought the Dallas Morning News headquarters, which is right next to the convention center, for something like 28, $29 million in 2019.

[A]

But he didn't stop there. He had a couple tricks up his sleeve.

[B]

He did. And so he asked for a ton of public money to help subsidize this redevelopment project. And they were sort of being tough with approvals and funding. And so he goes, you know what he invoked?

[A]

The boogeyman.

[B]

The boogeyman.

[A]

The best thing he did, he's like,

[B]

you know what would be really good amenity for this convention center that would make a lot of people really excited to come here is a giant data center.

[A]

And the city figured out their problems and came. Came Quick.

[B]

Yeah, they paid basically double his price for half the property.

[A]

And this is the amazing thing from the news article. Washburn said he had to buy the data center firm out of their contract, but declined to provide further details, citing an NDA.

[B]

I bet he insisted on it.

[A]

One thing we should say about Ray Washburn in general, there's a lot of myth making involved with this guy. There's a lot of stories that are partially true, have a little grain of truth, might be true for a second, but everything is fluid with this guy.

[B]

It's one of these guys where he's not lying, but it's also not really the truth.

[A]

You can't handle the truth.

[B]

We need more of this. This is what real estate used to be based on. Absolutely. I think I've held off long enough. We're going to talk about Highland Park Village now.

[A]

Let's go.

[B]

So Ray, his background, he's a restaurateur

[A]

with an N or without the N? I prefer without the N. It's classier.

[B]

Yeah, I always say restaurateur, not restaurateur. Right. And so he. Chain of Mexican restaurants, very successful guy. And one of the locations was in Highland Park Village, which is in Highland park in Dallas, one of the most upscale neighborhoods in America and long established.

[A]

Real money. If you're not familiar with Texas, it's hard to appreciate just how much wealth is in that Dallas Fort Worth corridor. It's actually incredible.

[B]

Highland park is where Billy Bob Thornton's wife wants to go live in Landman. That's where the Hunts live.

[A]

Like that's where we're going to go. Well, speaking of the Hunts, they're involved here.

[B]

They are, yeah. So he's in Highland Park Village. I'm just going to read his description of how this transaction is. So again, Highland Park Village is this what, half a million square foot, A little bit larger retail center, one of the just biggest, most show stopping assets in this market.

[A]

And it's owned by this dynastic family called another dynastic family called the Millers, who I think they paid what, 5 million for it way back in the day?

[B]

$5 million for it and this shit cash for the better part of half a century. So it's seen better days because there's 12 or 13 people, however many, getting distributions out of this thing, they're not really spending the extra dollar to juice rents and juice sales that they should.

[A]

When your basis is that freaking low, you sometimes don't. You kind of don't push as far as you should.

[B]

It's not the right thing to maximize irr. But who's to say who's wrong? You know what they did? They bought it 50 years ago for $5 million. They can afford to not do the flower pots. But anyway, I'm just going to quote this story because it's just tremendous. And again, grain of salt with all this. So this is from D Magazine, which

[A]

is a sleeper shout out to D magazine, one of my favorites.

[B]

I was having dinner here with my wife one night, Washburn says, between quick sips of an Arnold Palmer. And one of the waiters had heard someone talking about how they were thinking about buying Highland Park Village. So I happen to see Henry Miller III walking by and I call him over. He pulls up a chair, puts down a shopping bag, and I say, are you selling?

[A]

Isn't that incredible? A couple of things here where you could just pull over a scion like that and have him pop. By the second, though, think of how much foresight and training you have to have to get the right kind of waiter who would hear that little nugget and then come back to you on it.

[B]

Oh, yeah, it'd be like, Mr. Washburn's gonna want to hear about this.

[A]

But a boss. Do you know what I just heard?

[B]

I hope that guy got a finder's fee.

[A]

Yeah.

[B]

So anyway, he then says, I called him the next morning. Washburn continues telling the story in an excited rush. The deal had dropped. I said, I'll be in your office in five minutes. I hurried over there, we made a handshake deal, and a few months later the contract went through and I bought it.

[A]

Semi bullshit kind of bullshit.

[B]

I'm sure there was some truthiness there, as you said, but here's where it gets really interesting and why I love this story. Ashburn was making the rounds last year with these Instagram reels talking about this. And so he has about this 2 minute, 50 second clip about how he bought Highland Park Village.

[A]

It's electric television, that thing.

[B]

It's so good. The one thing we neglected to say about the sale is that happened like right in the teeth of the Great Recession.

[A]

Yes.

[B]

So he's under liquidity.

[A]

Forget about it. It's not happening.

[B]

So he's under contract for 170 odd million. Ray Washburn does not have $170 million. Like, Ray Washburn probably doesn't have $17 million. Right? And he buys this thing, he hires HFF to go get debt.

[A]

They basically knock on every lender's door. Everyone's like, guys, this is not happening.

[B]

No no, better than that. So HFF they're like, hey, we found the needle in the haystack. There's a German bank.

[A]

Of course the Germans.

[B]

The German bank is going to lend you the money. And he's like, hell, yeah. Fuck, yeah. That's great. So he tells the story. He's like, I'm at opening day for the Rangers. My phone rings. HFF calls, says, this is the first time this has happened in the 500 years of this German bank. But got to the CEO and they said they ain't doing the loan. So he goes back to the Millers and he says, I don't have the money.

[A]

And the Millers, a little bit of a spoiler here, but think about these dynastic families and how they're organized. There's a lot of family members who are collecting checks and want to collect more checks if this deal is now in jeopardy. A lot of those cousins and uncles and aunts don't make their money. So they are kind of a little bit of a soft target here.

[B]

They are. And once you, like, make the decision to sell like you're selling, yes, that's the thing. Getting there is hard. But once you're there, like, you want it to go through. So he gets them to take a. What's $80 million owner's note, a first lien at 2%.

[A]

Incredible. Three years.

[B]

Just unbelievable. Like the balls.

[A]

That's government debt levels, right?

[B]

Yeah, just incredible. And so he's then got a $90 million hole, and he's like, all right. Like, between what I could put up and there was, like, 70 million left. So I go to every rich guy I know.

[A]

Real estate is often a club deal, right? Pull out the Rolodex, call everyone who's got a certain level of net worth and see if they're interested. So his Rolodex, luckily, has guys like Harlan Crowe on it.

[B]

So Ray Washburn, in addition to being a successful restaurateur, did the most important thing to be a great real estate investor, which is he married one of the richest families in America. He married into the Hunt family.

[A]

What's the thing you say you could get?

[B]

You can marry more money in a minute than you can make in a lifetime. So again, your standard person trying to tie up Highland Park Village cannot do this. But he ends up getting Harlan Crowe and some other Dallas billionaire who he won't name into a competition. So he gets him down from 15% to 12%. Long story short, when he bought it in 2008, I think he paid what?

[A]

170 million in the end, 170, which

[B]

was a staggering price by a distance,

[A]

the most ever paid for Dallas retail.

[B]

A giant amount. But again, it talks. We talk about like buying a trophy asset, buying a great asset and like the right sale outcomes here in 2008 when we bought this, the village did 80 million of sales across the entire. All the stores there did 80 million of sales. The rents were way below market because again, people couldn't afford to pay more because they weren't making any more money. The center had been a little bit shabby. They hadn't been reinvesting in it. The way they tenants rent is really impacted one by the comps, which he had an interesting insight which he's talked about, which is that the comps weren't other Dallas retail centers. The comps were like Beverly Hills, Fifth Avenue.

[A]

But this is my overall thesis for luxury.

[B]

I mean, he's not wrong.

[A]

I'm like obsessed with the idea that at the very tippy top of the luxury market, be it condos, retail hotels, whatever, they're only competing with each other. They're not really competing with the local market. That's my grand unified thesis.

[B]

And he was proven to be 100% correct because rents were really low because that's all tenants could afford to pay based on their sales. And I think he did 80 million of sales the year he bought it. And I think the sales have 10x'd since then. That means the tenants can pay a lot more rent and they're willing to eat a huge rent increase if their sales go up in a commensurate fashion. And that's what we've seen. And so I'm sure he's refied out Harlan Crow and he's doing quite well.

[A]

Dallas has always been a bastion of wealth, but that city's changing very quickly. There's a immortal line from Harold Robbins about the three most boring things in the world. And it's home cooking, home fucking. And Dallas, Texas, it's changed quite a bit since then.

[B]

That it has. And again, first of all, the balls it takes to go ask for a 2% seller note for $80 million on this asset.

[A]

Amazing.

[B]

And then the risk appetite it takes to go get 15% paper for another $80 million. It's $12 million a year of interest expense you got to be paying. These are the type of guys like Harry Mackalow behind the GM building. That's this type of. This is, yeah, it's a smaller nominal check size, but this is that type of swing. It's not just seeing, like, what's there. It's seeing what it could be and knowing you can get there and levering up everything you can to get there. So, Ray Washburn, we salute you. Hopefully Dallas steps up and gives you 20% of the cost for your $800 million hotel at the convention center, which ostensibly we should have been talking about.

[A]

I love this line, which is just such an ominous way to end it, where he said, I just need the city to engage in conversations for it.

[B]

I mean, how long does that NDA on the data center last?

[A]

That's it for the promote podcast this week. Eastle went across the pond to find a willing buyer. And now the game becomes all about convincing their biggest rainmakers to stay put. And the king of the Dallas Buyers Club has grand plans for the city's venerable newspaper campus. We'll be watching how he bullies the city into going along with his vision.

[B]

We'll be back next week with more CRE insider goodness. Thanks again to our sponsors, Bravo Capital and Loan Boss.

[A]

You can find them at bravocapital.com and loanboss.com did you see we finally got another new review.

[B]

We did. And I want to thank the reviewer who put in so much thought, heart and empathy into this review. It was William Carlos Williams esque and it was just. It good. It good.

[A]

Well, the guy's not wrong. I'll see you next week, dude. Thank you.

[B]

Thank you.

[A]

Ciao.