The Promote Podcast

Episode: Sobrato’s Silicon Sizzle & Macklowe Unfurled

Date: September 25, 2025
Hosts: Hiten Samtani ("Bard of CRE") & Will Krasne

Overview

This week, The Promote Podcast dives deep into three headline-defining commercial real estate (CRE) stories. The hosts unspool the Sobrato Organization’s massive windfall from Nvidia’s Silicon Valley real estate spree, unpack the accelerating retreat of major players from multifamily development, and savor the return of notorious developer Harry Macklowe, who’s managed to finance another ultra-lux Manhattan project despite a hard-fought (and infamous) track record. With trademark wit and deep insider knowledge, Hiten and Will explore the people, deals, and wild moments shaping CRE today.

Segment 1: Sobrato’s Silicon Valley Jackpot

[00:26–10:21]

Key Points

• Nvidia’s Buying Spree:
  • The AI giant has snapped up over $1 billion in real estate near its Silicon Valley HQ.
  • The Sobrato Organization has been a big beneficiary, selling at least $400 million in assets.
  • "It’s kind of a rounding error for a company worth $4.5 trillion." – Will [02:32]
• Background: Sobrato, Berg, and Silicon Valley’s CRE Cowboys
  • Sobrato, Dick Perry, and John Arriaga—legendary Bay Area developers.
  • Sobrato’s unlikely capital: The family’s restaurant business and the intuition to buy their own city block, which later yielded more profit than decades of service.
  • Anne Sobrato (matriarch) played a foundational, often overlooked, role.
  • Sobrato’s partnership with Carl Berg:
    • "John was the salesman, Mr. Outside, and Carl was the lone guy, Mr. Inside." [05:08]
    • Dynamic vital to CRE success: dealmaker + operator.
• Risk Culture in CRE:
  • They frequently leveraged deals to the hilt.
  • “We borrowed 100% of the purchase price.” —John Sobrato (quote relayed by Will) [06:36]
  • "It did used to be a country." —Hiten, on now-forbidden levels of risk [06:43]
• Cyclicality and Shocks:
  • Sobrato & Berg built tech-focused space—great during tech booms; calamitous when the bubble burst (e.g., post-Y2K saw 5-year vacancies).
  • The massive compounding value of Silicon Valley land.
    • "That 200,000 square feet they sold to Amdahl, they probably built it for like nine bucks a foot. What's it worth today?" —Hiten [07:43]
    • Recent Nvidia price: $660 per foot [08:18]
• Changing Corporate Attitudes to Ownership:
  • Periodic waves where “big users want to own,” e.g., Google/Hudson Square, JPMorgan, luxury brands.
  • "All the real estate guys want to do tech and all the tech guys want to do real estate. Sometimes the beams cross.” —Hiten [09:22]
• Legacy and Philanthropy:
  • Sobrato’s immense charitable giving—nine-figure personal donations.
  • "For someone this wealthy, comes off as about as well adjusted as you can be." —Hiten [09:43]

Memorable Moment

• Yacht talk:
  • "We just have a boat which we can move around, depending on the weather where we'd like to be. We've had the same boat now for 17 years." —John Sobrato (quoted) [10:07]

Segment 2: The Multifamily Exodus

[11:19–19:47]

Key Points

• Sentiment Shift:
  • Multifamily was “bell of the ball,” but now, major players are quitting the space.
  • Toll Brothers (major homebuilder) divested its multifamily unit to Kennedy Wilson for ~$350M, adding $5B+ AUM to KW’s portfolio.
  • "If you have another line...and you got into multi during this last cycle because it was the hot place to be...your investors are telling you, you know what, why don't you go back to the thing that you actually made some money on." —Hiten [12:26]
• Specific Deals:
  • Toll Brothers—roots as core homebuilder, exiting multi after shareholders push for focus.
  • Kennedy Wilson acquires a 29-site pipeline.
  • Insight into Kennedy Wilson’s “complicated” public-company structure: JV, balance sheet, funds, credit arms [14:42].
• JBG Smith:
  • Pulled the plug on a huge Virginia project—1,400 units—citing rates and “Trump tariffs.”
  • Deeper context: DC multifamily market is soft/transient.
  • JBG Smith’s roots as a Vornado spinoff, their Amazon HQ2 moment, and strategic refocus on creative office.
  • "JBG, again, it was a very common stock play to say JBG is going to benefit from HQ2. It hasn't really panned out that way." —Hiten [16:25]
• Industry Consolidation:
  • Talks of major players (Cortland, Bell Partners, etc.) seeking scale or exits as high rates and funding woes persist.
  • Bell Partners exploring a sale.
• Why the Pullback Now?:
  • Construction debt for small/midsize projects is harder than ever:
    • "If they're holding any office, they don't really (want) to be putting on more risk. It's been tricky." —Hiten [18:45]
  • “Soft costs” on small deals remain proportionately huge.
  • Availability of alternative CRE investments (credit, below replacement cost, conversions) luring capital away from ground-up development.
• Rates and Narrative:
  • Hosts’ skepticism:
    • "All I would say is that any view that's like very certain or one way is probably wrong." —Hiten [18:12]

Memorable Quotes

• "Fuck you, fuck you, fuck you, you're cool and fuck you, I'm out." —Hiten, on the exodus vibe [12:21]
• "Narrative drives price, which drives fundamentals." —Hiten [13:41]

Segment 3: Harry Macklowe Returns – “Macklowe Unfurled”

[20:56–30:44]

Key Points

• Macklowe—the Man, the Myth:
  • At age 88, Macklowe lands another prime Manhattan project at 809 Madison Ave., despite mixed history:
    • 432 Park (with CIM Group, whose windfall dwarfed Macklowe’s),
    • 1 Wall Street (disappointing resi conversion; Qatari royal LP),
    • “Tower Fifth” supertall (never built; had plans for a 70-story exterior slide).
  • "At this point Harry Macklowe is immortal in my book. He has Horcruxes stored all over the Upper east side." —Will [26:30]
• The 809 Madison Deal:
  • Purchased from Churchill Real Estate (an unusual seller, as a debt warehouse lender now owned by Madison Realty Capital).
  • Sold at a loss vs. their 2015 acquisition.
  • The address is in Manhattan’s "final boss of NIMBY" territory—the Upper East Side Historic District.
  • Macklowe’s famed persuasive charm with NYC’s Landmark Preservation Commission; will expand/convert to single-floor, 4,000sf luxury condos.
  • Pricing: $5,000/sf estimate—half of Park-facing luxury.
  • "This is like Arch nimby. Like this is the final boss of nimby, right?" —Will [25:10]
• The Capital Stack:
  • Construction debt by Marty Burger’s Infinite Global Real Estate Partners and Related Funds
  • Pref equity: Sculptor Capital (formerly Och-Ziff) and Circle Property Partners
  • LP layer: family offices, small funds, UHNWIs, assembled via Carlton Group (Howard Michaels’ legacy syndicator)
  • Heavy use of pref/mezz/dequity due to the current fundraising climate, banks and conventional JVs are scarce
  • "You might think, man, that's a lot of interest...But as Harry Macklowe once told a friend of mine...When he asked about his underwriting...He said, ’New York will bail me out.’" [30:45]
• CRE Capital Trends:
  • Pref/mezz increasingly used to fill equity gaps in development projects.
  • Few traditional LPs are willing to back ground-up; creative structures proliferate.
  • “You're seeing more and more of these types of structures because cap tech's got to get filled to build stuff and the LPs aren't there.” —Hiten [29:58]

Memorable Moments

• “Horcruxes” quip about Macklowe’s persistence [26:33]
• The “slide on the outside of the tower” proposal [22:42]
• “New York will bail me out.” [30:45]

Notable Quotes & Moments

• Ocean’s Eleven Parody/Thematic Cold Open [00:05–00:53]

  • “Run and hide, asshole.” —Hosts, channeling Terry Benedict/Mark Holliday on failed Times Square casino bid, setting the episode’s “deal war stories” tone.

• Sobrato “Country” Risk Culture [06:43]

  • "We used to be a country." —Hiten

• Wheel of CRE Destiny [09:22]

  • "All the real estate guys want to do tech and all the tech guys want to do real estate. Sometimes the beams cross." —Hiten

• Multifamily Exodus Vibe [12:21]

  • "Fuck you, fuck you, fuck you, you're cool and fuck you, I'm out." —Hiten (riffing on Half Baked)

• Macklowe “Horcruxes” and Immortality [26:33]

  • "At this point Harry Macklowe is immortal in my book. He has Horcruxes stored all over the Upper east side." —Will

• Underwriting Wisdom [30:45]

  • “New York will bail me out.” —Harry Macklowe (retold by Hiten)

Timestamps of Key Segments

• [00:26] Theme/setup: “Run and hide” (Mark Holliday-Times Square story)
• [01:26] Main Stories Preview
• [02:12] Nvidia/Sobrato—Silicon Valley Segment starts
• [11:19] Multifamily Exodus Segment starts
• [20:56] Harry Macklowe Returns/Madison Ave deal starts
• [29:58] Pref/dequity trend in cap stacks

Insider Tone & Culture

The episode brims with insider banter, deadpan humor, and rapid-fire, reference-heavy analysis. Hiten and Will freely mix personal anecdotes, time-hopping deal histories, and colorful metaphors (“final boss of nimby,” “Horcruxes,” “run and hide, asshole”) while never losing sight of real financial implications. Their candor, skepticism, and industry war stories make this a highly engaging listen—and an invaluable wrap-up for CRE professionals.

For Future Reference

• Promote Insider premium content launches Oct 15—bonus episodes, deep dives, and interviews [20:21].
• Host children updates interspersed (briefly, not content-focused) [20:01].
• Sponsor: Bullpen, CRE-specific recruiting [10:22, 28:28].