The Promote Podcast – “Schvo Business & Multifamily’s Antitrust Agita”

Date: August 20, 2025
Hosts: Hiten Samtani (ten31 Media), Will Krasne

Episode Overview

This episode of The Promote Podcast delves into two high-stakes stories shaking up the Commercial Real Estate (CRE) world:

1. Antitrust Pressure in Multifamily:
   • The DOJ’s broad antitrust crackdown on multifamily housing, focusing on Greystar’s settlement and the role of RealPage’s yield management algorithm.
   • What this means for the future of rent-setting, landlord behavior, and the profit engines of institutional housing.
2. Life and Dramas of Michael Shvo:
   • The rise, antics, and current embroilment of Michael Shvo, one of CRE’s most notorious dealmakers.
   • How Schvo convinced German pension money to fuel high-profile, high-risk projects, and the spectacular fallout as assets falter.

The hosts guide listeners from regulatory rumblings to war stories of over-the-top visionaries, serving up deep market insights, biting humor, and an insider’s take on both CRE tech and personalities.

Key Discussion Points and Insights

1. DOJ Antitrust Case Against Multifamily Landlords and Rent Algorithms

[00:23 – 13:59]

Context and Stakes

• Greystar and other top landlords settled with the DOJ over allegations of collusion via RealPage’s rental pricing algorithms.
• The government claims software like RealPage’s YieldStar enables landlords to set higher rents collectively.

How the Rental Software Works

• Will: “When you own a multifamily property… you need a rental software… The part… in discussion for RealPage, it’s called YieldStar… an algorithm with a recommendation engine… looks at other rents in your market and then gives you a recommended price for your unit based on what other units are achieving.” [01:41-02:18]
• Hiten (on the basics): “[YieldStar] is just kind of aggregating all the comps?” [02:54]

Arguments About Collusion

• Hosts argue this behavioral data has always underpinned multifamily, with managers historically “calling around” competitors for rent info.
• Will: “Ever since people have been renting apartments… you call around… You do that every week. My first work trips, I only went because I was the only guy who was in the target demo for the apartments that we were scouting.” [03:43-04:13]

Market Realities vs. Political Theater

• The DOJ effort is bipartisan (“Big Landlord as Big Tobacco”), using institutional owners as campaign targets.
• Hiten: “Big landlord is kind of like big tobacco. It’s an easy punching boy.” [05:41]
• Notable quote from DOJ antitrust lead:
  Hiten: “The modern machinery of algorithms and AI can be even more effective than the smoke-filled rooms of the past.” [06:41]

Implications and Real-World Impact

• Effectiveness of the algorithm is questioned: rents are dynamic, often public via listings.
• Landlords now risk the appearance of collusion—even when acting “independently” with similar tech.
• Will: “All of these softwares are terrible. None of them are good. RealPage particularly… they kept acquiring workflows and nothing talks to each other.” [07:54–08:14]
• Settlement means more landlords might bring rent-pricing tech in-house, potentially spurring innovation by smaller vendors.

Wider Impact: Junk Fees and Pricing Transparency

• Feds also cracking down on “junk fees” (admin, trash, pest fees, etc.) that boost effective rents unseen by tenants.
• Greystar now introduces a “total monthly leasing price calculator” listing all recurring fees up-front.
• Will: “If you can’t charge or don’t charge pest fees, trash, reimbursables… it just comes straight away from your bottom line. It’s just $1 for dollar takes away from your NOI, which in turn hurts value.” [12:37]
• Expect landlords to deploy their own transparent pricing tools industrywide.

2. Michael Shvo: Deal Visionary or Risk Magnet?

[14:32 – 29:51]

Who Is Michael Shvo?

• Legendary broker-turned-developer, famous for theatricality, high-flying deals, and knack for courting global capital.
• Hiten: “Most real estate people, even the really wealthy ones, are trying really hard… Michael Schvo really is in with the cool kids… He kind of lives the life. He’s a handsome, imposing, charming creature—and I use that word very deliberately…” [15:27–15:54]
• Holds the record as the top-selling broker at Douglas Elliman, unseating Dolly Lenz.

Playbook: Turn Condos Into Luxury Aspirations

• Pioneered “selling access”—building hype and lifestyle fantasies into new development marketing.
• Survived the 2008-09 crash, reinvented himself as an art collector, then staged a huge comeback.

The “Shvo Capital” Era and German Money

• 2010s: Attracts $700M+ from German pension fund managers (BVK, via Deutsche Finance) to bankroll ambitious, skyline-defining projects across Miami, NYC, Beverly Hills, San Francisco, and Chicago.
• Projects include the Raleigh (Miami), Mandarin Oriental (Beverly Hills), and Transamerica Pyramid (SF).
• Will: “He bought… the Raleigh in Miami, the Mandarin Oriental in Beverly Hills, the Koch building in New York… Transamerica Pyramid in SF… And then my personal favorite, Big Red in Chicago.” [20:51–21:05]
• Paid “outrageous prices” pre-pandemic, then doubled down with massive, expensive renovations.

The Cracks Appear: Defaults, Lawsuits, and “Big Red”

• Some trophy assets go rapidly underwater post-pandemic; e.g., “Big Red” in Chicago.
• Defaults on Mandarin Oriental loan; Raleigh Hotel mired in lawsuits, recap process; BVK and other partners oust him from deals.
• Hiten: “The Mandarin Oriental in Beverly Hills, he defaulted on his $200M+ loan, and the condos went up for sale as a bulk offering. And for those who don’t know, when condos go up for sale as a bulk deal, it’s generally not a great sign.” [22:25–23:02]

The Twist: Shvo Sues for Promoted Profits

• Despite being ousted and assets struggling, Schvo claims $85M in unpaid fees and carried interest from BVK.
• BVK officials are fired; Bavarian Parliament investigates the loss to pensioners from “a convicted tax offender.”
• Will: “It is Chef’s kiss perfect that with all these projects underwater, delays, lawsuits… this guy has the balls to go to BVK and say, you owe me $85M in fees.” [23:11–23:37]
• Hiten: “This illustrates a broader thing here. The best salesman… are able to convince people to give them a lot of money. And when they’re kind of taken by the charm and the aura—which he does have—[I] really wonder what those deals look like.” [24:55]

Notable Lawsuits and Relationships

• Legal battles proliferate—against Core Club, partners, lenders.
• Yet, as projects stagger, Schvo’s promotional skills remain formidable.

Lessons and the Schvo Mystique

• Prestige properties aren’t always great deals: high capex, difficult tenants, rental economics that rarely justify the glamour.
• Will: “He did buy great real estate. Like, the Raleigh is phenomenal real estate. It’s just, again, great real estate’s not always a great deal.” [27:42]
• Hosts predict Schvo will “come roaring back” with new capital and perhaps a new act.

Notable Quotes & Memorable Moments

• On the DOJ/Algorithm Case:

  • “The modern machinery of algorithms and AI can be even more effective than the smoke-filled rooms of the past.”
    — Hiten quoting DOJ antitrust head [06:41]
  • “All of these [rental] softwares are terrible… RealPage particularly… nothing talks to each other.”
    — Will [07:54–08:14]
  • “If you can’t charge or don’t charge pest fees, trash reimbursables… it just comes straight away from your bottom line… hurts value.”
    — Will [12:37]
  • “You can’t bring facts to a feelings fight.”
    — Hiten [07:22]

• On Michael Schvo:

  • “A permanent Israeli with an action figure physique, which I think is still true 20 years later. Credit to Michael on that.”
    — Hiten reading New York Magazine [15:03]
  • “He sold this vision of a boutique condo project. I believe it only had five units or six units… one bought by Bob Smith from Vista… one by J. Tomlinson Hill.”
    — Hiten [18:28–18:42]
  • “As Voltaire said, you know, if Michael Schvo didn’t exist, we’d have to invent him.”
    — Hiten [19:23]

• Best Metaphor:

  • “It’s like winning a paternity case. Like, did you really win it?”
    — Will, on the hollow victories from fighting the DOJ [14:19]

Timestamps for Key Segments

• 00:23–13:59 — DOJ and the Rental Software Antitrust Lawsuit

  • [01:41] Rental software basics & RealPage’s algorithm
  • [06:41] Politicians and DOJ rhetoric, “algorithm as new collusion”
  • [10:23] “Junk fees” and Greystar’s transparency tools

• 14:32–29:51 — Michael Schvo: Rise, Fall, and Lawsuits

  • [15:03] Schvo’s profile as “action figure” and New York Magazine
  • [20:51] The $700M buying spree
  • [22:25] Defaults, underwater assets, “bulk offering” explained
  • [23:11] Schvo suing for $85M in promote fees
  • [24:55] The power of salesmanship and questionable deal structures
  • [27:42] “Great real estate’s not always a great deal”
  • [28:12] Foreign capital’s preference for flash over “cash-flowing B apartments in the Midwest”

Takeaways for CRE Insiders

• Antitrust Scrutiny Is Changing the Game:
  Major cap rate impacts could come from regulatory-driven transparency and fee reductions, not just market cycles.
• Technology and “Algorithms” Are a Scapegoat:
  Rent-recommending software is a tool, not a conspiracy—yet perception trumps nuance.
• Visionary “Showmen” Remain Enduring—and Controversial:
  Where others see lawsuits and losses, pros like Schvo see opportunity, and may always find new believers.
• Transparency and “Junk Fees” Will Reshape Underwriting:
  Expect more pressure to disclose every dollar of rent, and for savvy GPs/LPs to dig deeper on non-rent revenue.

Closing Moment

Will: “His first word [referring to his son] was cap rate. That’s two words, but there you go.” [31:43]

Tune in next week for more insider war stories and breakdowns from the heart of CRE.