SNFing out Megadeals and Syndicator Patient Zero

Summary

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The Promote Podcast – Episode Summary

Podcast: The Promote Podcast
Host(s): Hiten Samtani (“Bard of CRE”), Will Krasne
Episode: SNFing out Megadeals and Syndicator Patient Zero
Date: January 21, 2026

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Episode Overview

This week, The Promote dives deep into the wild world of Commercial Real Estate (CRE) dealmakers, tracing the saga of megadeals, industry power brokers, and the strange, lucrative, and sometimes scandalous world of skilled nursing facilities ("sniffs"). The hosts kick off with a rapid-fire news rundown—covering major moves in NYC multifamily, studio real estate in LA, and eye-popping development missteps in Miami—before taking us inside the secretive, heavily Orthodox world of skilled nursing operators and the recent Genesis Healthcare megabankruptcy. The episode closes with an unplugged, revealing interview with Alan Stalkup of GVA, a central figure in the syndicator-fueled rise and crash of Sun Belt multifamily.

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Key Discussion Points & Insights

1. CRE Weekly News Bulletin (00:23–12:01)

a) Marty Berger's New Venture (01:29–05:29)

• Background: Former Silverstein CEO Marty Berger is making another comeback, this time teaming up with David Levinson (L&L).
• History of False Starts: Berger and Levinson (and partners like Andrew Farkas, Marianne Gilmartin) have tried similar ventures before; none stuck.
• Challenges: Berger, lacking a balance sheet, often had to source debt after tying up deals, which limited his power post-Silverstein.
• Media Spin: Coverage in Crain’s is criticized as misleading—“an ousted CEO who redeveloped the WTC...”, using the Trade Center for clickbait.
• Insight: When you leave the institutional machine, “You stop getting the emails... It’s really hard.” – A (03:17)

b) Soho House Take Private Update (05:37–06:31)

• Tyler Morse and Morse Ventures: Initially lacked funds, now sourcing through note financing; $100M split between fund and Morse Ventures.
• “Left hand, right hand. The deal gets done. Ron Burkle pays himself.” – A (06:31)

c) Summit Pinnacle’s Acquisition of NYC Rent-Stabilized Units (06:31–08:17)

• Biggest Bankruptcy Auction: Summit secures over 5,000 units, with Flagstar again stepping in ($330M financing).
• Asset Management Challenge: Immense work ahead—walking units, curing violations, vast complexity.
• “To wrap your arms around this... is preposterous.” – A (07:53)

d) Hackman Capital and LA Studios in Trouble (08:21–10:32)

• Soundstage Bets Falter: Hackman and Hudson Pacific’s big pandemic-era thesis is tanking.
• Specialization Required: Handling these unique assets is daunting, especially for lenders like Goldman Sachs.
• “You need a specialized skill set... Not something just anyone can step into.” – A (09:12)
• Possibility of Founders Staying In: Sometimes the only ones who can fix it are those who caused the mess.

e) Two Roads’ Miami Condo Buyout Collapse (10:32–11:55)

• Unprecedented Legal Setback: Not only did Two Roads lose the case, but the judge also ordered them to make units habitable again, multiplying costs and risk.
• “It's like when you sign up for an Ironman and they're like, actually, you need to run the other way first.” – A (11:35)

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2. Industry Deep Dive: Skilled Nursing Facilities (SNFs) (12:53–21:05)

a) Lay of the Land (13:46–15:46)

• ~15,000 SNFs serving over 1.3 million people—dominated by a small group, often Orthodox Jewish, with roots in cash-rich, under-the-radar deals.
• Financing: High leverage HUD-financing is standard—“Borrowing money from the government against old people.” – A (14:13)
• Playbook: Passed down almost like scripture, with musings about the space in esoteric newsletters like the “Sniff Schmooze.”
• Key Players: Joel Landau, Darrell Hagler, Kenneth Rosenberg—some have even bought airlines, underscoring the sheer scale.

b) Genesis Healthcare Bankruptcies (15:58–20:50)

• Rise and Fall: Genesis exploded from a handful to hundreds of facilities, went public, peaked at $4B, then experienced repeated bankruptcies.
• 2021 Restructuring: Joel Landau (“Satmar Pezenovante”) enters as a major creditor.
• Recent Auction Chaos: Landau tries a controversial stalking horse bid that would have shielded him from $1.6B in liabilities—“That’s the game when you’re dealing with the elderly.” – A (18:40)
• Rival Intervenes: Jacob Saad disrupts the process; finally, an LLC linked to Abe Tress buys the portfolio, but the saga may not be over.
• Why SNFs Matter: “What is financeable dictates all the moves in the market.” – B (14:40)
• Colorful Insider Quote: “The playbook is like the Bill Walsh coaching tree—handed down and super concentrated.” – A (15:15)

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3. Interview – Sun Belt Syndicator Patient Zero: Alan Stalkup, GVA (22:10–33:13)

a) GVA’s Meteoric Rise and Wipeout (22:10–27:24)

• Scale: At peak, GVA owned 30,000+ Sun Belt units, mostly bought in the market's frothiest period (80% purchased in 2021–2022).
• Legal Battles: Now facing $400M+ in lawsuits (e.g., personal guarantee carveouts with Benefit Street, Starwood) and possibly an SEC probe.
• Blame Game: Stalkup pins collapse on Fed’s rate hikes, not his strategy; doesn’t address falling rents/occupancy or overpaying at thin cap rates.
• Due Diligence Shortcuts: “If you’re buying thousands of units every six months, the diligence process has to be compromised.” – B (25:07)
• Operational Chaos: Even opening bank accounts or switching utilities became a massive challenge; allegations of “cooking the books.”
• Transparency… or Not: Claims of disclosure—“We sent 300 page financials.” – A (29:28)
• Memorable Critique: “That’s how you don’t disclose things. Death by complexity.” – B (29:28)

b) Stalkup’s Candid Tone (27:24–30:39)

• Losses Shared: Claims biggest individual losses ($400M).
• Positioning: Attempts to separate himself from “syndicator” stigma: “I care about your $100,000, but also my $5 million.” – Stalkup (26:29)
• Defiance & Future Plans: Apparently open to SEC investigations, but “pretty much done”—intends to wind down and help others.
• “This is one of the first times I‘ve heard someone across CRE really say, like, I’m pretty much done.” – B (30:39)
• Root Cause: FOMO, unchecked growth, and the lure of “a billion in LP money” driving reckless expansion.

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Notable Quotes & Memorable Moments

• On Leaving the Institutional Machine:
  “It’s really hard... once you’re on your own, it’s a whole different skill set.” – A (03:22)
• On Asset Management Overload:
  “The asset management here, to wrap your arms around, is preposterous.” – A (07:53)
• On SNF HUD Financing:
  “You’re borrowing money from the government against old people.” – A (14:13)
• On Syndicator Mentality:
  “None of the syndicators... have really talked about supply demand dynamics.” – B (24:18)
• On the Illusion of Disclosure:
  “That’s how you don’t disclose things. Death by complexity.” – B (29:28)
• On Human Nature and FOMO:
  “It’s hard to resist the call of the wild... If you raise a billion dollars of LP equity and buy $3 billion of debt, that’s a lot of fees.” – A (32:36)
• On Redemption After Bust:
  “The great thing about America is you can declare bankruptcy and come back. You can fail and come back and that’s okay.” – A (27:28)

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Important Timestamps

• 00:23–12:01: CRE News Bulletin (Berger, Soho House, Summit, Hackman, Miami collapse)
• 13:46–21:05: Skilled Nursing Facilities Deep Dive
• 22:10–33:13: Alan Stalkup interview – Sun Belt Syndicator Crash
• Select Quotes:
  • On HUD financing: (14:13)
  • On disclosure complexity: (29:28)
  • On asset management scale: (07:53)
  • On personal loss and candor: (26:10–26:36; 30:39)

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Episode Tone & Takeaways

The hosts balance snarky, insider banter with sharp, clear-eyed analysis. Through war stories and candid interviews, they illuminate the real human and financial mechanics of CRE's biggest bubbles and busts. Whether digging into the secretive playbook of "sniff" operators or the psychodrama of failed Sun Belt syndicators, the episode emphasizes both nuance ("It doesn't make it right just because it's market") and the enduring role of human nature and FOMO.

This is a can’t-miss listen for CRE insiders—and a sobering, illuminating window for any outsider curious about the money and mania shaping tomorrow’s skylines.

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Transcript

[A]

So, fun fact about me, I can list all of the books in the Old Testament. I Learned it in Mr. Ehrenhalf's class in fifth grade and it just sort of stuck with me.

[B]

How'd you start to memorize that? It feels like a pretty tall order for an 11 year old.

[A]

Well, you see, it starts with Genesis. Turn it on.

[B]

Turn it on again. Welcome back to the Promote podcast. Your insider guides the money and mania of the CRE markets. I'm Hatan Sumtani.

[A]

And I'm Will Krasny.

[B]

A shout out to our sponsors for this episode. Loanboss, which is a best in class, CRE debt management software.

[A]

And Bravo Capital, which is one of the market's leading HUD and bridge lenders.

[B]

This week we discuss a redemption tour by GVA's Alan Stahlkop, probably patient zero of the Sunbelt multifamily boom bust. He's battling PGs, LPs, and maybe even the SEC. But Stockhope's pretty unapologetic. He sat down with me for a pretty unplugged conversation, I gotta say.

[A]

Good on you for getting this. This was great.

[B]

Kai fell into my lap. We'll talk about it. We then dive into the 24Six world of dealmaking in skilled nursing facilities. It's a totally undercovered corner of CRE with big numbers and some batshit maneuvering.

[A]

Let's kick things off with the news bulletin because there's just been too much CRE drama since we last spoke.

[B]

It's just been nuts. This past week has been absolutely nuts. Marty Berger, let's start there. He was the CEO of Silverstein. He was a related guy and then he went to Silverstein.

[A]

It helped expand the firm. From mom and pop is like the wrong word. But the book about ground zero that came out, Power at Ground Zero, I.

[B]

Think it's called Lynn Sagolin's book.

[A]

Yeah. When they talk about how Silverstein missed the initial bid deadline because their fax machine in the office was broken. Well, now Silverstein is as much a brand as any pure play real estate shop. Like, they are an institutional fund manager. And a lot of that is due to what Marty Berger did. Anyway, we're getting far afield. He is launching or relaunching a couple at Bats. False starts. A new venture, but this time with David Levinson.

[B]

David Levinson of L and L fame.

[A]

What's hilarious is that David Levinson tried this exact thing before.

[B]

Yes, exactly. Levinson. I believe his partner Lapidus and Marianne Gilmartin tried something as well. Called LNL Mag, which is basically just an amalgamation of all their frickin initials that didn't really go anywhere either. And Marty Berger had tried something. So he launched something called I believe Infinite or Infinity with Andrew Farkas of Island Capital. That fizzled out before launch. Right. So then he was a man without a country. I think this is really interesting. It's like he wanted to play all over the cap stack. But once he lost the Farkas relationship, he kind of became a man without an island. He was a glorified capital markets broker. He wanted to be a lender, but.

[A]

He didn't have a balance sheet.

[B]

He didn't have a balance sheet. So he would tie up a deal and then he would have to go and find the debt fund to bankroll it. If you remember, he's doing the latest MacLeod deal.

[A]

Amazing. Look, it's really hard. I think a lot of people realize when you're in the machine and you think that you are the reason for the success. And a lot of times it's the seat. And I'm not saying this about Marty. He's a talented guy.

[B]

I'm saying this about myself. When I was leaving the Real Deal, I'm like, fuck, am I something or am I the real deal? It was. It's scary.

[A]

Yeah. It's like someone who's on their own. It's really hard. It's a whole different skill set. What did Bob Iger say about leaving Disney? He's like, you stop getting the emails. The emails. Stop going to do a deal in New York off your own balance sheet is like a gargantuan task. And so you really need to have a partner with deep pockets or a partner with a firm that has deep pockets. And even if you are Marty Berger, unless you're Tyler Henrizi, it's hard to go raise that money flat out. Without our track record. It's hard to say how much of like a Blackstone cut up is them versus the machine.

[B]

One of the things that he, Marty, as many professional CEOs find at these family firms, is like if your name's on the door, that matters. There was some son in law situation tal carat. There's Lisa Silverstein, who's now CEO. As a professional CEO, you can only go so far in a company like this.

[A]

Totally. And it really depends on what your expectations are and what your goals are. You can do really well and it's a great risk adjusted seat in a lot of ways. But you're never shooting the moon. The Twitter thread from like four Years ago, when Dell Curry got divorced, where the guy was like, dell, don't do it. It's hard out here.

[B]

Burger's been out of silver scene a couple years, hovering around deals. I believe he got the PM contract for the Schwo portfolio from Deutsche Finance America.

[A]

Pretty good gig. We've talked a lot about how receivers can make a lot of money here. Like, I think this is a good gig to unwind. It can take a couple years, cover some overhead, and lets you be around. Around the hoop, so to speak. But I think what's interesting here is the media. Let's get into that really quick. What's the media spin here?

[B]

Well, there's a coup. Fun things happening, right? One is the collective amnesia around the fact that he's tried this a couple of times. The other part is, like, there was, I think, a very unfair article in Crain's where the headline in Craines says, an ousted CEO who helped redevelop the World Trade center has found his next act. What tends to happen is this is newsworthy for a very specific subset of people that you and I care about. The promote listeners, CRE insiders. But to make it palatable or interesting for a broader New York or business audience, they just, like, threw in the World Trade center card.

[A]

Fundraising is vibes almost as much as anything. And having the media narrative here, when you're out to fundraise, it's the same as when you're launching a building. You gotta get while getting's good.

[B]

You gotta get it right. Yeah, you gotta get it right the first time. So good luck to Marty. We'll see how it goes. All right. We talked, what, last week? About this.

[A]

Yes.

[B]

Tyler Morris failure to launch on the take private of Soho House. They went back and figured it out as you predicted they would. There's a new entity involved here, Morse Ventures. Huh. I wonder what that is.

[A]

The question is, which Morse is involved? Is it Tyler reading the doc? He's getting note financing for this. It doesn't seem like it's all his money.

[B]

Well, that would make sense, right? Because he said just earlier this month that he didn't have the money to close.

[A]

They're cutting it in half off the top. So it's $100 million commitment. 50 from the fund and then 50 from Morse Ventures. So instead of the 200 from the fund or from MCR, the combined, my guess is that Morse Ventures point to somebody who's like, I'll put up my stake in the company and my stake in Swansea. Do you want to loan me some money. There's more rollover. The rest is covered by more unsecured debt issuance, which I'm sure will price wide. But the deal gets done. Ron Burkle pays himself. Left hand, right hand.

[B]

All right, next one. We also just talked about this. The Summit Pinnacle stalking horse bid for 5,000 plus rent stabilized units in New York City, arguably the country's most scrutinized bankruptcy auction. It's gone through. Summit is now the presumptive owner of this giant portfolio. Even though there was some last minute kind of finagling from the Mamdani administration, it didn't take.

[A]

Can't keep a good man down.

[B]

Especially if the man is backed once again by Flagstar. They're coming back in here.

[A]

In for a dime, in for 60% of a dime.

[B]

Flagstar is stepping up again with $330 million in financing. So their debt basis, I was trying to do the math. Was 65,000 a door, give or take. Why do you think they come back for round two?

[A]

You reset the debt basis, you're taking a write off either way. And now at least you've got a hope note on this. And the basis again, as we said when we spoke about this, it's so cheap. These are super operationally intensive. You can't raise the rents. It's a political hot button. But 64k to our debt basis. Now the thing is, Summit's got to get to work.

[B]

I think they did this basically to placate the Mum Downey administration. But there was a pretty extraordinary document in the filings where Summit maps out their curing violation schedule. It's got fancy graphics and all of that, so someone's earned their keep here. And it says, you know, within the first 60 days we're going to address these immediately hazardous violations. And then I think in the next 180 days or so, we will get the majority of the rest. Quite a pledge to make.

[A]

Yeah. And again, just to give some context for folks, if I'm out there just walking units on a new acquisition, let's say I'm buying 150 unit apartment complex. It's going to take me two days to walk every unit and see everything. Yeah. Now imagine something 30 times bigger than that. It's going to take you two months just to walk everything and understand what you're dealing with. The asset management here to wrap your arms around is preposterous. Same on the property management side?

[B]

Well, it depends. You might have some help from friends, you might have some help from brothers.

[A]

Who Knows brother, where art thou? You know.

[B]

All right, next one. Hackman Capital, Los Angeles. Goldman Sachs was a lender. I think they gave him 1 billion 1 on one of the studios. Is it called Radford? Seinfeld was shot at the studio, very iconic studio in la. Hackman Capital, as we talked about a couple episodes ago, is one of the big players in this whole soundstage space. Hpp, Hudson Pacific, the other. Both have had a pretty rough go of it recently. This was the thesis driven bet on the west coast. Coming out of the pandemic has been a bit of a flop.

[A]

It's very sad. Goes back to G.S. goldman Sachs. I guess. Steve Bannon wasn't even the Goldman Sachs. Didn't he also get a piece of Seinfeld So maybe he can come back.

[B]

You mean just walk into the staff meeting on Monday morning like it never happened? Sure.

[A]

You're an emotional person.

[B]

I'm curious what your thoughts are on REO in a space like this, which is quite specialized.

[A]

It's really hard. This is not something that just anybody can step into. You need to have a very specialized skill set. We talked about the asset management challenges of rent stabilized units. The asset management challenges of a giant soundstage is very difficult too. Especially in this time of tumult in the entertainment industry. So I.

[B]

Nice alliteration there. I like it.

[A]

Thank you. I'm positive this is not something that Goldman Sachs wants to deal with operationally. Whether or not they're selling their position, my guess is they're probably going to go try to find an operator to come in here and try to turn it around and not sell off the Nader.

[B]

Do you think there's a potential role for Hackman in this down the road? I guess my question is, will the kids stay in the picture?

[A]

Is I lucky?

[B]

I think so.

[A]

God, Bobby Evans, what a beaut.

[B]

I miss that guy.

[A]

I know, me too. But it's actually a great point. So you think about the Reichmans getting taken down by Canary Wharf, but they ended up staying in because it's sort of like who the hell else can get you out of this thing other than the guys who got you in? That really would not shock me if he got some sort of consulting role or like, hey, we'll pay you X per month and some share of profits if you're able to stay in here and turn this around. Because yeah, it's an operational issue, but part of this is just timing. And if you could reset the capital stack which has just happened and you buy some more time, the Final one.

[B]

This one is crazy. We talked about this a couple months ago. This is the botched condo buyout in Miami with a company called Two Roads Development in Edgewater. The way I was thinking about it, there's the bear case in development, there's the nuclear scenario, and then there's something like this.

[A]

When you put this on the docket, I literally got a shiver.

[B]

What do we talk about?

[A]

So Two Roads tried to do a condo buyout of a site and basically they were going to tear it down and then rebuild it.

[B]

As we've talked about, very popular play in South Florida in the last couple years.

[A]

Right. So there were, I think, 10 holdouts. Those holdouts were pretty pissed.

[B]

Yes. Do you remember that insane quote one of them had? I'm not going to repeat it for now, but my God, it was bad. When we talked about this, the developer had lost the decisive case that would have allowed them to proceed with the buyout. I believe their lenders were hovering and everything. Now it gets worse. Now the judge has said not only do you not get to do your little schemes, you also have to repair the units and bring them back to habitable condition. Basically, you have to go out of pocket.

[A]

This is like when you sign up for an Ironman and they're like, actually, you need to run the other way first. It's just horrifying. I don't know how you underwrite it. I don't know what they're going to do. Your lenders aren't going to let you use proceeds for that, I'm sure. And every day that goes by at a project like this, the IRR clock is ticking. The interest calc is ticking. So they already were kind of screwed. And this is just.

[B]

This is it. So will you violate any debt covenants recently?

[A]

So funny you should ask. I have been in technical default recently. I mean, who among us, right? But not since Q4.

[B]

Ooh.

[A]

And that's not because I paid off the loan. It's because that's when I started using Loan Boss.

[B]

I can't believe how old school some of our listeners are. They're still crunching DSCRs in Excel and all that.

[A]

Ugh. Total waste of time. Risky business to boot. Loan Boss runs the entire process for me. One click Covenant testing. Incredible. Instant cash flow forecasting. Impeccable. And my favorite nerdy delight, the live forward curve. So I hate having to go download the forward curve. And then it's always vertical. And you got to alt HVT to have it go horizontal. Make sure the index Match works like ridiculous.

[B]

They've just got it sorted here for you.

[A]

Much better. So thank you, Lone Boss listeners.

[B]

Check them out@ LoneBoss.com that's LoneBoss.com and tell them the promote sent you. All right. This is one of my favorite spaces. Man, I love this. We're talking, obviously about skilled nursing facilities. No one in the business has sniffs. And they are an incredibly opaque, fascinating corner of commercial real estate dominated by a small crew of orthodox players. Pretty surprising amount of, like, Sentai millionaires that came out of this space. My favorite is our guy, Joel Landau.

[A]

It takes a real certain type of person to get into this space and succeed in this space.

[B]

You need to have incredibly thick skin because there's, like, the emotional toll of dealing with old people and sick people and all the media scrutiny that comes with that is pretty immense.

[A]

Yeah. And I think one of the ways to avoid that is to not have technology.

[B]

Let's do a little bit of a lay of the land. There's about 15,000 SNFs in the US they serve roughly 1.3 million people. Vast majority of them are both Medicare and Medicaid funded. And you can get really. And this is the very important part of this. You can get incredibly high leverage HUD financing for these kind of properties. One source put it to me thusly, you're borrowing money from the government against old people. That's the way you put it. Oh, my God.

[A]

Yeah. The thesis behind this is what you see on every LinkedIn post when someone's talking about buying an H Vac repair company. It's like the Silver Tsunami. They're coming.

[B]

Yes.

[A]

And the demographics here, people have lost their shirts here. This is a very politically charged sector. You need to know, like, every nook and cranny of the rule book, every nook and cranny of the tax code, every nook and cranny of your HUD financing. Because that's really what makes these whole things is, like, this HUD financing.

[B]

One of the broader themes that we talk about quite a bit on this POD is, like, what is financeable essentially dictates all the moves in the market. Right. And this HUD financing as Cape Hatch is incredibly crucial for this. Shout out to a publication I've been reading recently called the Sniff Schmooze, Retired sniff operator and just has these incredibly illustrated cartoons about the space. And he's, I think, an orthodox guy, too. So he speaks in that lingo. Been learning a lot from that. It's like a very intricate playbook.

[A]

It's Almost like this playbook is like passed down. So you end up with American Pie. Yeah, like.

[B]

Yeah, exactly.

[A]

I was going to say the Bill Walsh coaching tree, but yes, the book in American Pie qualify for what? My man, you've just inherited the Bible.

[B]

So it's somehow. It's become kind of concentrated in the Orthodox Jewish community. Really big players. We mentioned Joel Landau, there's Darrell Hagler, Kenneth Rosenberg. These guys also own an airline. So you kind of get a sense of the scale of some of these guys.

[A]

And these are the guys who also come out of nowhere. And they're like. They bought this condo site in red hook for $370 million. Exactly. What.

[B]

Yeah, it's incredible. This practice spits out cash. So a lot of the sniff operators have parlayed their winnings from that business into the development business, the conventional CRE business.

[A]

The reason we're talking about this now is that there was a. One of the big names in the. Or formerly big name in the space just had a bankruptcy auction. Not the first bankruptcy. That is Genesis.

[B]

That is Genesis Healthcare we're talking about now. It's whittled down, but it's still a portfolio of about 175 SNFs. This was one of the big, big names in the space. Been bankruptcies, restructurings.

[A]

Genesis Healthcare is sort of indicative of the entire space. It was founded in the mid-80s in Kennett Square, of all places, by Michael Walker. And it has this. There's the Michael Walker building on State street in the heart of Kennett Square, which is like this beautiful bedroom community for Philly in Wilmington. I've been in this office. The mahogany is like this thick.

[B]

It's like.

[A]

And it's like you're walking into the office in Dallas jr, sitting behind the desk. It's of a time. And this tracks the industry because it was founded in 85, I think Michael Walker. And he had a co founder, his name's ESC Me. But they bought seven, eight, something like that. Sniffs and then I think by 1998 they went public and were worth like $4 billion. It's one of these things where because of the leverage profile and the cash profile, if things are going well, you generate cash, which allows you to borrow more, which allows you to generate more cash. And so you just sort of go up and up and up and up and up. But of course, this filed for bankruptcy 25 years ago.

[B]

Until the bedpan is taken away, there's been through a couple of bankruptcies. The most recent one we want to touch on happened in 2021, there was a restructuring and in came our guy. Yoli Landau, also known as Joel Landau. The promote calls him the Satmar Pezenovante. Big, big, big player in both nursing homes and development. I think New York heads will know him best. From the Allure Group, Rivington House scandal, the Lower east side deed restriction removal. That's him.

[A]

That's the same guy the real heads know. That's all you need to know about the guy.

[B]

So in 2021, Yoli land the debt. And this is important because now when this goes bankrupt again, he makes a stocking horse bid.

[A]

I know your favorite.

[B]

It's really up there for listeners who are coming in late. A stalking horse bid sets the floor price at the auction. There are certain incentives for a stocking horse bidder. Basically, you can get a deal. You can also get a termination fee if things don't go your way, et cetera.

[A]

And importantly, you can structure these things to get rid of some liabilities if you win.

[B]

That is exactly right. So the reason this one was so controversial is that Yoli Landau's stalking horse bid, crucially would have essentially absolved them from $1.6 billion in liabilities over various negligence things, including wrongful debts, et cetera. Which is par for the course, unfortunately in sniffs.

[A]

That's the game when you're dealing with the elderly. One of his rivals saw this bid and was none too pleased and really tried to torpedo it. And he did.

[B]

There's a guy called Jacob Saad. Jacob Sod is a very nursing home operator as well. Other people will know him because he was one of the main characters in the whole Mark Nussbaum escrow mess. He is one of the guys who provided $15 million in show capital. Anyway, I'm just giving you a sense of the universe because it is quite complicated. So Jacob Saad is working in the background. He's blowing up everyone's whatsapps because I was getting screenshots of all of this stuff because again, it's egregious that Landau essentially wanted to walk away from all of this stuff. Saad succeeded.

[A]

The reason people work the raft is because it works.

[B]

The judge ordered a do over of the auction and set a new stalking horse bidder.

[A]

And guess who that was.

[B]

That was Sod.

[A]

What are the odds?

[B]

So at this point, everyone thinks the jig is up. It's going to be done. However, when it came to the final.

[A]

The final moment, a LLC called 101 West street ended up winning the bid. And 101 West street is actually the address of the aforementioned Michael Walker building. Full of rich mahogany.

[B]

This I didn't realize, but 101 West street won the auction. I think their bid was about a billion dollars, which is essentially a cash purse of 350 million. IOU note of 100. And then assuming about 600 million in liabilities, everyone's like, who the hell is 101 West Street? Which is why you're lucky you have the promote. Because we find out through our network of Hamish sources that 101 west is controlled by a guy called Abe Tress.

[A]

This isn't his first rodeo with Genesis.

[B]

No, Amazingly, Abetress through NuGen, which was the company that came in in the 21 restructuring, already has a connection through his California healthcare centers to the Genesis portfolio. So, I mean, it's as incestuous as you can ask for, really.

[A]

This isn't the end, though. He's not home free yet. He's got to go in front of the US Bankruptcy judge.

[B]

By the time this pod comes out, we will know what happened with that. But what we're hearing from sources is that Landau may not be done. He may still find a way into this whole business.

[A]

See, David Ellison, take note. If you want to win something, you improve the bid.

[B]

All right, I'm here with Aaron Krovitz from Bravo Capital. Aaron, let's get right to it. What's the story behind this mythical 100% HUD approval record?

[C]

It's pretty straightforward. We have an amazing team. We're pure play hud. We're focused on bridge to HUD all day. We're both fully HUD licensed, and we also offer balance sheet bridge financing, where we could finance deals over $100 million, just like we did in Miami, Brooklyn, and Jersey City.

[B]

And what's the secret sauce? How do you put it all together?

[C]

It's our underwriting. We don't rush deals to market and hope they stick. We know what HUD wants before we submit, so there are no surprises. And we have a real balance sheet, so when we go, we go.

[B]

You were telling me when we were chatting offline that you closed a HUD Express lane deal in four days. That's absurdly fast for HUD.

[C]

Hey, 10. That's why we get up in the morning at Bravo. We're here to break records. We're here to innovate. And when you have tight documentation, the right underwriting, that means speedy approvals and speed.

[B]

Means the sponsor can close quick. Thanks, Aaron. Good to have you on.

[C]

Thanks, Hatten. And you can find [e-mail].

[A]

So we've spent a lot of time on the promote talking about the Syndicator bust and the Sun Belt. We've talked to Michael Comparato, who's lent to some of those guys, talked to other various sources about what's gone on there. And you decided to go hear it from the horse's mouth himself, Mr. Alan Stelkop of GBA, one of the absolute poster boys of the last two years of Syndicator Madness.

[B]

Sometimes you just put yourself in a position and things fall in your lap. This is absolutely. I cannot take credit for this. They reached out to us and they said, hey, do you want to chat with Alan? I didn't know what to expect. I initially thought it was a spoof account. Friday, sometime after dropping the promote, I was like, all right, I'm going to have a phone call with these guys. We'll see what they say. Alan pops up on camera in the standard. What are those blazers? Called? Like the peaked blazer. And I'm like, oh, okay, we're doing this. And what followed was what I thought was pretty extraordinary conversation. He did not shy away from anything and it was all on the record.

[A]

So Alan is in a little bit of legal hot water right now. He's facing about $400 million in lawsuits where lenders are coming after his personal guarantee on bad boy carve outs, specifically.

[B]

Benefit street partners Starwood Capital.

[A]

He's got two investor lawsuits, one of which was settled or dismissed. Another one is pending. There's rumored to be an SEC investigation that he simultaneously didn't know about, but also welcomed if it was coming. He really let it all hang out there. He wasn't going gentle into that good night. He talked about his. He talked about how he's the biggest investor in these things and really was coming back on the offensive.

[B]

Alan Stalka GVM at its peak, Allen controlled about 30,000 doors across the Sun Belt. So multibillion dollar portfolio. He was an NMHC Top 50 landlord at one point. The majority of the purchases were as they are floating rate debt, bought absolute top, top, top, top, top. And things turned and he got rocked. That's kind of what happened. He's basically putting all the blame on the Fed. He said, hey, they were not going to raise rates. Then they raised rates 11 times. None of the syndicators that we've talked to have really talked about supply demand dynamics. Like that seems to be not something that they think about.

[A]

They haven't talked about that and they haven't talked about the fact that occupancy went from 96%, rent growth went from double digits to negative double digits. You know, that seems to be a slightly important piece of this puzzle as well. An old real estate guy once told me, he's like, I don't really care about recessions because my net worth goes down by half. Of my cash flow stays the same. And you know, that's because you had long term fixed rate deb and these guys had none of that.

[B]

The opposite. Yeah.

[A]

And they were also really banking on, as we've talked about, huge renovations to pop rents. They were paying really tight cap rates that gave them no margin for error. And I think the big thing here, what stuck out to me is that stock up, you say 30,000 units. That is a ton. And people can build that on their own. There's a bunch of family businesses, regional businesses, which gets the 10, 20,000 units, if not a little more, over 30 years. He bought 80% of his units in two years. 20, 21, 2022.

[B]

This comes back to a point that I think Comparato made pod like, how do you do diligence on this stuff? If you're buying thousands of units every six months, the diligence process has to be compromised a little bit. The ability to put these together relies on you just moving. Right. You don't have time to think. You're just acting.

[A]

We talked about it with Summit. It's the same thing. If you're buying this many units, how do you run these things? I mean, even little stuff I've talked about, like setting up bank accounts. I mean, how do you switch over utilities?

[B]

It's funny, you talk about setting up bank accounts. One of the primary allegations in one of the LP lawsuits is that Stalkup was cooking the books. An account that was supposed to be a risk fee account. It's basically a fancy security deposit workaround. But the allegation is that the risk fee was a sham account where they were just like throwing the losses in. It was sort of a black hole for all the losses. Stalkub addressed all this. He did not shy away from anything. I asked him, when I said the losses have been pretty gargantuan. He said, listen, these are all accredited investors. They knew what they were signing up for. He claims that he has personally lost $400 million since the thing went south.

[A]

He said he was the biggest individual investor, which I guess, I don't know.

[B]

We can tell, right? We don't know.

[A]

Yeah, maybe he was like, we'll never know. Who knows if there's back leverage or he syndicated his pieces out. And what was interesting to me is that he tried to basically come off as the anti syndicator. He's saying that I'm the owner. I'm the guy who suffers the most.

[B]

Skin in the game. Correct.

[A]

I've got skin in the game.

[B]

One extraordinary quote. He's like, I tell my investors, I care about your $100,000, but I also care about my $5 million, which is.

[A]

Why I did no diligence and bought, you know, a three cap piece of crap in San Antonio.

[B]

Yeah. As I said, there's chatter of an SEC fraud investigation. The Austin American Statesman had talked about it and Stalkop's point, the zen con ness of this whole thing, which is like, if there is an SEC investigation, you're not allowed to talk about it. But I welcome it if there is one. So I said, has the SEC reached out to you? And I said, I don't know what you're allowed to say. He said, they have not specified anything. It's a little early to know.

[A]

He's not really too big to fail. He's already down to what, 5,000 units.

[B]

Today, one sixth of his portfolio. Pretty, pretty massive.

[A]

Employee count is down huge. And the stuff he still has is appraising. And he admitted this. It's appraising below the debt on 65% LTV loans from three years ago.

[B]

Kander there was quite amazing. He's like, these are not worth the debt right now.

[A]

I honestly admire that. And I think more people should be like that. Investing is really hard. People go through tough times. No one bats a thousand. The great thing about America is that you can declare bankruptcy and come back. You can fail and come back and that's okay. So I admire him for that. But I don't know, it's hard to really tell the difference between in some cases just a company outgrowing itself and outgrowing its systems and outright fraud. There may not really be a difference. It's a hard line to tow. And if you're buying that many units and the money's there, it's hard to not do it.

[B]

What happen with the personal guarantees in the case of bankruptcy? We talked about Benefit Street. One of the most extraordinary allegations in that suit is that there was an actual fire at one of the properties and GVA never disclosed it. Again, we do not know. We're both outside parties to this whole thing. It's a he said, he said situation right now. But he. Malcolm's claim is that, listen, it's A really? I would do the same thing. Spend a couple hundred thousand on legal splash. This headline of a 300 million etc suit. He's like look, if I settle for 2 million, they 10x their money. Like it's great, it makes sense. I would do the same thing.

[A]

He's not wrong. But at the same time, the bigger issue is not selling for $2 million. It's a $28 million loan on the property that's underwater that the lender's really concerned about.

[B]

I had asked him about the excessive fees, which is one of the kind of the broader complaints that a lot of people have coming out of this sunbelt boom bust. The fees are potentially egregious. There's an equity fee, there's a risk fee, there's a success fee, et cetera. But they are laid out. No. So you are signing up for them. Your Indian doctor who put 85k in. It's there.

[A]

Yeah, it's caveat mtor but at the same time doesn't make it right. Saying something is market for a certain sector doesn't mean it's right because people are charging worse than this. People were charging much better than this. And to basically say, hey, you were signing up for this, you knew what you were getting into. The thing that really stands out is he goes, we disclosed everything. We had 300 page financials that we sent out. That's how you don't disclose things.

[B]

Death by complexity. Yeah.

[A]

It's like what do you do? You bury them Paperwork.

[B]

There's a scene in Wolf of Wall street where they stack the auditors up in a room, they turn the AC to like sub zero temperatures and they just keep smashing them with folders.

[A]

$26,000 worth of sides. What are these sides that cure cancer and that's basically what you're doing. If you're sending out 300, you don't need a 300 page financials for these. He's like, oh, it was all in the general ledger. Like you're expecting a guy who put a 50k LLP check into this thing to go through GL and like tie it out. Saying that that's their fault that they didn't catch you is ludicrous.

[B]

The SEC investigation is smoke right now. We don't know that for a fact. The lawsuits are factual. They are out there. Besides the kind of the mana from heaven for me as a media guy, what do you think about his strategy of just doing this? And apparently he's, he's going to the papers, he's doing the Rounds.

[A]

We talked about how this wasn't a death knell for some other guys, like S2s raised more money. They were facing a lot of the same issues.

[B]

They're in acquisition mode.

[A]

Yeah, they're in acquisition mode. A lot of these other groups, even like Rise 48 keeps buying stuff in there.

[B]

Nitya is raising money right now to buy one of GVA's portfolios.

[A]

They keep moving forward. And I don't know if the way to go about rebuilding your business is to be out loud saying, it was everybody's fault but mine. I lost a bunch of money, so therefore it's okay.

[B]

What I thought was surprising here is this is one of the first times that I've heard someone across CRE really say, like, I'm pretty much done. Because I asked him, do you plan to stay in the game? He's like, nah, I want to see this portfolio out. I want to work through these problems, and then I want to go help some of my guys.

[A]

Does he have a choice? Everyone talks about the macro point. There are billions of defaults or trillion of defaults through here. Okay. Does that make it better for your investors? No. And to say that no one saw this coming, like, people did see it coming. You don't have to buy deals. Part of the thing here, which is so fascinating and why it's captured the public interest so much, is that it's just human nature. Human nature is as old as the hills, as Jesse Livermore would say. And you have this guy who's run a nice business. He's owned 5,000 units, he's made real returns. And the problem is, is that in the period when he was making those returns, you just had to be able to be in the game. And don't get me wrong, it takes talent to raise money to buy multifamily real estate. It takes a lot of talent.

[B]

He raised about one and a half billion dollars of LP capital. That's no joke.

[A]

But I'm talking about the. The point. The point before 2021, what he did, 2010-2020 is the most impressive part to me, because it was impossible to raise money to buy multifamily in that period. And he did it. And yeah, he made great returns. Not anyone could have gotten people to give them capital and go do it. So give him a lot of credit for that. And if you've done that for that long and you think you've got the golden touch, and then all of a sudden everything you ever wanted is right there, all you gotta do is click Send on those sub docs to the whole email list. Yeah, it's a human story. It's as human story as anything.

[B]

One of the themes we talk about a lot is FOMO investing. You don't want to be the guy who built the 5,000 unit portfolio while in these random rise and nitya and all these guys, these young people come in and just go on an absolute rampage with floating rate debt and build portfolios that are 2x3x the size of yours. It's hard to resist the call of the wild. In that sense.

[A]

It is. Because think of it this way, if you raise a billion dollars of LP equity and you buy $3 billion worth of debt, that's a lot of fees and it's really hard to say no to that. I like to think that if someone had given me a billion dollars in 2021, I would've said ah, like I don't know. But at the same time, if they're gonna give you the money, that decision, one of the main themes of this podcast, that decision's been made. You gotta go do the best deal you can. A little bit different when it's a retail fundraise versus a fund or someone allocating to your dedicated blind pool. But. But at the same time, would anyone have done anything different?

[B]

Alan, if you're listening to this, I appreciate you sitting down with me. Your candor is very much appreciated by me, so thanks Alan for that.

[A]

I think it's appreciated by everybody and I think a lot of people would appreciate other folks who are in similar situations who are continuing to say that they don't have problems in their portfolio when they clearly do. If they had the candor that you had. Alan.

[B]

That's it for the promote podcast this week. We've got hobbled stalking horses in the sniff space and Satmar Pazinovante potentially taking another shot at his Genesis prize. And one of the syndicator world's most scrutinized figures is out there in the wild trying to clear his name. Let's see if he can dodge lenders and LPs for long enough to do so. We'll be back next week with more CRE Insider goodness. A shout out again to our sponsors Bravo Capital and Lone Boss.

[A]

You can find them at bravocapital.com and loanboss.com well that was so fun.

[B]

Format's a little wild, but I think our listeners will like it.

[A]

We're just trying to cover as much as we can. We're only two men just trying to.

[B]

Cover our draw all right. I'll see you next week, dude. Thanks.

[A]

Thank you.

[B]

Ciao.

[A]

Sa.