The Promote Podcast: "Starchitects, Swedish Whales & an SF Hotel Heist" — Episode Summary Date: December 10, 2025 | Host: Hiten Samtani (A), Co-host: Will Krasne (B)
Overview
This episode of The Promote Podcast delivers a deep dive into three blockbuster stories shaping the U.S. commercial real estate (CRE) market:
- The Legacy of Two Legendary "Starchitects" — Reflections on the impact and business realities of iconic architects Robert A.M. Stern and Frank Gehry.
- Inside the Largest Industrial Deal of 2025 — Analysis of EQT’s near-9M sf industrial portfolio sale to Artemis and wider AUM-gobbling industry trends.
- A San Francisco Hotel “Heist” — A masterclass in distressed deals as nearly 10% of SF’s hotel keys trade hands in a complex, high-stakes acquisition.
The podcast is equal parts sharp deal analysis, war stories, and CRE insider banter, all delivered in The Promote’s trademark candid, irreverent style.
Key Topics & Insights
1. Cutting Deals With "Starchitects" (00:03-09:45, 24:19-32:12)
The Passing of Giants
- Robert A.M. Stern (RIP at 86) and Frank Gehry (RIP at 96) were hailed as titans whose projects irreversibly shaped city skylines and CRE business models.
- “It's sad, but it's also a pretty glorious life and career. 86 for Bob Stern, 96 for Frank Gehry. And these guys, they were working till the very end.” — A (24:29)
“Starchitects” in CRE: Blessing, Curse, or Both?
- Stern: Celebrated for 15 Central Park West, bringing historic, “familiar” luxury to new heights. Delivered smash profits, often outperformed pro formas, and was widely liked by developers — a rare combo in the field. (25:15)
- “People think they want daring... What they really want is familiar. And that's what he did.” — A (25:50)
- Gehry: The “artist” archetype, design-led, iconic for the Guggenheim Bilbao and Beekman Tower (“New York by Gehry”). Projects were sometimes hard to deliver or live in, and rarely made money for developers.
- Broader lesson: Starchitects serve as “permission structures” for luxury buyers, letting them justify paying premiums in secondary locations via architectural pedigree.
- “This is Ramsa, this is Gary. That was the permission structure. Like that made it an institutional asset.” — B (31:49)
- Downside: Drama, cost overruns, sometimes unlivable results (Falling Water, 432 Park Ave). (27:02-28:11)
Notable Moment
- “One of my favorite examples is Falling Water, Frank Lloyd Wright, maybe the most famous house in America—it's literally uninhabitable...” — B (28:43)
2. EQT, Artemis, and the "AUM-Gobbling" Trend (02:04-09:34)
EQT’s Rise & Major Shift
- EQT (Swedish asset manager, backed by the Wallenberg family) bought U.S. industrial powerhouse Exeter, going on a $7B+ buying spree in 2024 led by Henry Steinberg.
- “They’ve become probably the most prominent industrial buyer in the country.” — B (02:26)
- Recently pivoted by dropping multifamily to double down on safer, bond-like industrial returns (e.g. FedEx leases), reflecting the “office to industrial” capital migration.
The Artemis Deal — Largest Industrial Sale of 2025
- EQT sold a 9M sf, 25-asset industrial portfolio to Artemis (led by Debbie Harmon, backed by Barings).
- Artemis’ core fund ($1.2B) was “turbocharged” with new firepower, enabling them to outbid major rivals in a fiercely contested process, indicative of the consolidator-to-mega-fund “hot potato” trend.
AUM-Gobbling: The Musical Chairs of Private Equity CRE
- It’s less about asset operations, more about assembling portfolios big enough to “pass on to the next guy,” yielding recurring sales among private equity giants.
- “It’s the same thing that’s been happening with continuation funds. So it's the end result of all the AUM gobbling.” — B (06:59)
- Strategic rationale: survive/thrive by growing assets, as Fortress co-CEO Drew McKnight puts it (quote at 06:13).
Financing & IRR Engineering
- Sustained by plentiful capital: CMBS, life companies (New York Life lent to EQT), super-clean investment-grade deals.
- “You jerry-rig a low teens IRR without a ton of squinting... buy at a 5.5 cap, finance at 50% LTV at 5.5, make a little bit of cash flow, sell it at a 5 cap. You jerry-rigged yourself an 11 IRR with low risk.” — B (04:42)
Character Shift: Rise of the Industrial Broker (09:12)
- With industrial’s rise, industrial brokers are now the market’s new “alphas,” displacing office jocks.
3. SF Hotel “Heist” — Anatomy of a Cycle-Defining Distressed Deal (09:46-23:59)
What Happened: The Players, The Opportunity
- A near-3,000 key portfolio—10% of downtown SF hotel capacity, including properties once valued at $1.6B—was bought for just $408M (about $135k/key) by NewBond (ex-Highgate/Starwood, led by the Kimji Brothers and Louis Stervino), backed by Conversant Capital (Mike Simonovsky).
- “These are hotels that need a lot of love. Right. This is downtown SF. It's like a woebegone situation for the last few years. It's gonna be quite a job.” — A (13:59)
How the Deal Got Done: War Stories & Insider Tactics
- The deal “floated” for a year with few true bidders—the risk and capital needs were so massive only a handful of contrarians stepped up.
- “Everyone wants to be a contrarian, until it's time to do contrarian shit. This is what it takes.” — B (24:09)
- Court-appointed receiver Michelle Russo’s God complex, bondholder fatigue, and fee structure quirks stretched the process (11:21-12:23).
- “Receivers get paid a monthly fee. 32k a month. It's like Dickens getting paid by the word, which is why everything was so fucking long.” — B (12:14)
- Operational know-how was key: “You gotta speak hotels, you gotta really speak hotels… you gotta know how to run them, deal with the brand, handle the renovations, which is a huge problem. 3000 keys.” — B (13:47)
Deal Economics & Structure
- $408M price was actually a deeply restructured debt assumption at a low (sub-4%) fixed rate, with an additional $225M equity for renovations.
- “You could spend [$135k/key] on renovation alone. But the structure gives them a three-year runway to execute.” — A/B (17:04, 18:02)
Who Got Paid & “Hope Note” Mechanics
- Receiver, brokers, and special servicer all took smaller fees (since bondholders were deeply underwater), but everyone “ate.”
- “When a deal closes, everybody eats. And everybody ate. So Russo got... over 400k, Eastdil got $1.25M... not huge, but it’s not a party.” — B (21:02).
- Bondholders accepted a “hope note”—25% of future profits above an (estimated) 15-20% hurdle, in exchange for not forcing a fire sale.
- “You're not going to get recouped all the way... but you'll get more than nothing. If this thing works, it could work real big.” — B (22:34)
- Civic leadership (Mayor Lurie) closely involved, with huge stakes for the city’s recovery, union jobs, and the future viability of SF conventions and tourism.
Notable Quotes & Moments
- “One way to make sure you bottom tick is tie it up and then have it be out there for like 10 months.” — B on their patience (10:40)
- “If you had all the money in the world, you could not rebuild these two hotels today. It would be too expensive.” — A (16:12)
Notable Quotes & Memorable Banter
- “What impresses me about people like this [Stern & Gehry] is they just fucking keep going.” — A (24:29)
- “We're in the moving business, not the storage business.” — B (27:44)
- “Everyone thought it was the W... It was not. It was like the Sheraton Cincinnati that did like 40 million of EBITDA a year. That's what made the whole company.” — B (16:23)
- “All these firms end up playing hot potato... it’s the end result of all the AUM gobbling.” — B (06:59)
- “How many Villanova baseball players does it take to sell an industrial portfolio?” — B, poking fun at the new pecking order (09:34)
- “Receivers get paid a monthly fee. 32k a month... It’s like Dickens getting paid by the word.” — B (12:14)
- “Everyone wants to be a contrarian till it’s time to do contrarian shit. This is what it takes.” — B (24:09)
- “This is Ramsa, this is Gary. That was the permission structure.” — B (31:58)
Timestamps for Key Segments
- 00:03 — Opening starchitect jokes & legacy of Stern/Gehry
- 02:04 — Deep dive: EQT’s industrial playbook, Artemis mega-deal
- 09:46 — SF hotel distress deal introduction
- 11:12 — Origins of receivership drama, fee structures
- 12:54 — NewBond’s hotel acquisition play & partners
- 13:59 — Why this deal was a “suicide mission” for most
- 17:04 — Price per key & “unthinkable” economics
- 19:23 — Cast of characters: buyers, lenders, bondholders
- 21:02 — Who got paid in the deal (fee details)
- 22:22 — Structure of hope note and profit split with bondholders
- 24:19 — Return to starchitects: impact, profit mechanics, permission structures
- 32:12 — Episode wrap-up and sign-off
Final Takeaways
The episode closes on the defiant optimism and grit required to survive and thrive in turbulent CRE markets—whether that means backing an unfashionable city, structuring the “impossible” deal, or betting billions on “boring” industrial warehouses. And, in the backdrop, the enduring power—and pitfalls—of branding, whether through architectural legends or asset management scale.
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