The Promote Podcast: “SF Apartment Therapy & the Short King of Data Centers”

October 8, 2025 | Hosted by Hiten Samtani & Will Krasne

Episode Overview

In this wide-ranging episode of The Promote Podcast, hosts Hiten Samtani and Will Krasne dive deep into three major commercial real estate (CRE) stories:

• The transformation of crypto-mining operations into data centers for tech giants like Google.
• The saga of Paul Prager, a notably colorful Brooklynite “short king,” building an empire in both energy and Maryland real estate.
• The ongoing carnage (and quiet resilience) in San Francisco’s multifamily market, marked by distressed portfolios and institutional power shifts.
• The rise of extended stay hotels as a new haven for institutional capital seeking reliable returns.

As always, the conversation is peppered with insider banter, sharp industry insights, and a few memorable quotes.

1. From Power Plants to Google Data Centers (00:27–10:31)

Key Discussion Points

• Paul Prager & TerraWulf:

  • Prager, a former NYC-based energy mogul, now runs TerraWulf, which began as a bitcoin mining company and has pivoted to data centers, leveraging its access to cheap hydropower in upstate New York.
  • The firm is in the news for raising debt to build Google data centers, a trend where "hyperscalers are teaming up with former bitcoin providers" (01:19).

• Financing Mechanics:

  • Google's $3.2B lease obligation and “backstopping” of the debt offers both assurance and reduced risk for institutional investors (03:24).
  • This is likened to recent deals (e.g., Hudson Pacific Properties) where major partners commit to backstopping IPOs or large financings to “show that there’s demand and...let the spread get a little bit tighter” (04:12).

• Pivot from Bitcoin Mining to AI-Driven Data Centers:

  • The AI/data center gold rush creates a “circular reference” in capital flows: “Nvidia is like, committing to buy stuff from OpenAI, and OpenAI is committing to, like, buy stuff from Nvidia and like, the money is just sort of going around like in a washing machine” (02:39).

• Location Strategy:

  • TerraWulf’s Lake Mariner, NY campus stands out for access to clean hydropower, ample cooling, and minimal NIMBY opposition, versus congested alternatives like Northern Virginia ("Ashburn") (05:14).

Notable Quotes

• “You got to find a place to do this where you’re not going to have all the NIMBYs coming out against you..." (06:01, Hiten)
• “Space is not a number or metric that really gets thrown around. It’s just not the limiting factor here... it’s all about power.” (05:32, Hiten)

2. CRE’s Short King Remakes Maryland (07:10–10:31)

Key Discussion Points

• The Paul Prager Effect:

  • Prager, “a short fat guy from Brooklyn,” has set his sights on transforming Easton, MD, into a high-end enclave, importing world-class culinary talent and acquiring significant swathes of real estate downtown (07:15–08:44).
  • He’s drawn comparisons to major CRE personalities who have remade entire regions (e.g., Ken Griffin in Miami, Steve Ross in West Palm Beach).
  • The dynamic is likened to building an entire “campus” and supporting an influx of talent and investment.

• Insider Anecdotes:

  • Will shares first-hand experiences: “I was at the $20 salad place...eight guys my age in vests walk in and I’m like, oh, right, he’s got his prop trading arm here and he needs all these guys to have stuff to do” (09:25).

Notable Quotes

• “They kind of have to do a thing... they can’t just exist in a town. They have to run riot on it.” (08:24, Hiten)
• “He’s like Ben Gazzara from Roadhouse where he’s taken over the entire town...” (09:56, Will)

3. San Francisco Apartment Therapy and Multifamily Carnage (11:21–22:34)

Key Discussion Points

• SF’s Multifamily Chaos:

  • The city’s largest operator, Veritas's Pang Pang, is facing the loss of up to 4,000 units within a year due to broken capital stacks, not (as many believe) solely rent control (12:27–13:44).
  • The hosts emphasize the unique volatility of operational-heavy, portfolio-driven CRE assets—giant portfolios of smaller buildings are “hugely operationally intensive” and can come with clawbacks from special servicers (15:08–16:57).

• How Big Deals Get Done (and Lost):

  • Pang “hung around the hoop for a year or two and said, hey, let’s see if we can work something out” when acquiring 2,000 units from the Lemby family during the GFC (16:02).
  • Once distressed, these portfolios can change hands rapidly, with Ballast (backed by Brookfield) snatching up debt and becoming a leading SF landlord overnight (18:03).

• Special Servicer Dynamics:

  • A revealing segment on special servicers: fees incentivize them to “keep deals in various states of undress” longer because that’s how they get paid (19:25–19:40).

• Market Rebounds & New Players:

  • Despite distress, SF’s market is seeing new institutional capital flows, evidence of rebound in both office and multifamily asset classes (20:22–21:01).

Notable Quotes

• “A great asset doesn’t mean it’s a great deal.” (12:44, Will)
• Pang: “I got them in the same way that I lost them.” (22:29, quoting Pang Pang)
• On special servicers: “There’s a pretty big conflict of interest baked in...they want the deal to be kind of in various states of undress for fairly long because that’s how they get compensated.” (19:25, Hiten)

4. Extended Stay: The Institutional Alpha Between Dusty Sheets (23:28–29:57)

Key Discussion Points

• Blackstone & Starwood’s $2B Play:

  • The institutional push into “alternative” property types continues with Blackstone and Starwood preparing a $2 billion financing for their portfolio of Extended Stay America, going private during COVID and now the poster child of CRE’s “resi-lite” product (23:28–24:13).

• Why Extended Stay Works:

  • Operate much more like housing—longer stays, reduced cleaning, fewer staff, steadiest margins in hospitality (25:12–25:57; 27:03).
  • “Weekly revpar” trumps the traditional daily metric and supports high NOI margins (25:02, Will).
  • Considered semi-recession-resistant: “If you can’t afford first, last and security deposit...these are apartment substitutes” (27:03, Will).

• Contrasting Market Segments:

  • Post-pandemic, ultra-lux resorts are thriving, mid-tier business travel hotels are lagging, but extended stays are showing durable returns (27:45–28:46).
  • Blackstone’s John Gray may not showcase extended stays at investor meetings, but, “they do the numbers” (29:57).

Notable Quotes

• “This is really the case here. So these things, it’s really all about how you operate it.” (25:16, Will)
• “You can run these things at like close to 40% NOI margins.” (29:12, Will)
• “Not necessarily what you want to talk about in fundraising meetings...but they’re cash flow engines.” (29:56, Will)

5. Memorable Moments & Tone

• The hosts’ banter and New York wit is on full display, from self-effacing Brooklyn jokes (“I don’t play golf. The only thing I do is eat and drink wine,” 00:04, Hiten) to dry digs at CRE’s cast of characters.
• Will’s pop culture references (e.g., Tony Montana, Ben Gazzara/Roadhouse, and “The Florida Project”) keep things lively and relatable for industry insiders.
• Their closing anecdote—quoting a listener’s review—captures the show’s unique appeal: “CRE without the pablum, the promote is where intelligence meets irreverence. Hiten Samtani and Will Krasne don't just cover CRE. They dissect it with rigor and narrative wit.” (30:53)

Timestamps for Key Segments

• Paul Prager & TerraWulf, Google Data Centers: 00:27–06:49
• Prager’s Maryland Makeover: 07:10–10:31
• San Francisco Multifamily Mayhem: 11:21–22:34
• Extended Stay Hotels as Institutional Alpha: 23:28–29:57

Conclusion

This episode of The Promote Podcast offers an entertaining, in-depth look at CRE’s quirkiest characters, sharpest pivots, and most heated dealmaking environments. From the “short king” re-imagining rural Maryland to the institutional chess game underway in San Francisco and extended stay hotels, Hiten and Will bring memorable stories and incisive analysis—true to their mantra of “intelligence meets irreverence.”