Windy City Tailwinds & Stadium Arcadium

Summary

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The Promote Podcast: Windy City Tailwinds & Stadium Arcadium

Date: January 7, 2026
Hosts: Hiten Samtani and Will Krasne

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Episode Overview

This episode kicks off 2026 with a comprehensive insider breakdown of three consequential stories shaping commercial real estate (CRE):

1. The unexpected inflow of major multifamily investment in Chicago
2. The boisterous business of stadium development and the profound role of real estate in sports
3. A landmark Freddie Mac refinance of Brooklyn walk-up portfolios, hinting at new liquidity options for previously overlooked assets

Along the way, hosts Hiten Samtani and Will Krasne deliver their signature sharp commentary, market war stories, and the industry wit that’s made the pod a must-listen for CRE insiders.

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Quick Hits: Market Movers & Shakers

[01:49 – 05:45]

• Saks Bankruptcy Implications

  • Saks possibly filing for bankruptcy, highlighting distress in retail real estate.
  • Ben Ashkenazy, returning to offense after tough years, purchases the famed Neiman Marcus in Beverly Hills, reportedly for $50 million—a shockingly low price for such a prime location.
    • “He must have squeezed. I would have paid to be in that room with him.” — Hiten [02:47]

• SoftBank’s Move on DigitalBridge

  • SoftBank set to acquire DigitalBridge (formerly Colony Capital), reinvented by Mark Gansey as an AI infrastructure play.
  • Some investors feel the $4 billion valuation undervalues the company amid the AI data rush.
    • “He was completely right that that bet worked out perfectly. But for whatever reason, the market hasn’t really agreed with the stock.” — Will [04:48]
  • Brief history of attempted suitors and what the deal signals for digital infrastructure investing.

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Main Story 1: Windy City Tailwinds – Chicago’s Multifamily Surge

[05:59 – 12:35]

• Chicago’s Perennial Underdog Status

  • The city has struggled with outflow, declining office markets, and public perception issues (“liberal, crime, corruption”).
    • “Chicago, which a lot of folks would say is uninvestable... Folks who are buying in this market right now are folks who then famously got their teeth kicked in, in the Sun Belt.” — Will [06:01–07:00]

• Why Investors are Returning

  • After getting burned in Sun Belt markets, institutional capital is hunting for overlooked, supply-constrained markets—enter Chicago.
    • “You don’t need a ton of population growth if you don’t have supply. You just need enough. And there is enough.” — Will [07:24]

• Recent Major Transactions

  • AIMCO Liquidates: Selling legacy assets as they liquidate—major Miami parcel (to Oak Row for $500M+), and a blockbuster Chicago portfolio to Latera for $455M (1,500 units, ~$300K/unit)
    • “This was honestly quite a shock to me. Latera is stepping in here...not a Blackstone, it’s not an FPA, it’s Litera and Latera’s equity on this rest. Is there equity?” — Hiten [08:11–09:01]
    • Latera/Respark as buyers signal new capital entering urban midwestern markets.
    • Discussion about the legacy of AIMCO and creation of AIR Communities (“defining apartment transaction of 2024 sold to Blackstone for $10B+”). [09:06–09:11]

• Supply & Demand Fundamentals

  • Chicago’s occupancy hit 95%+ in 2025, well above averages, with 4.5% YoY rent growth—outpacing other major US metros.
    • “The vibes are much better and it’s been backed up by the data.” — Will [09:34]
    • Contrast to Sun Belt/Austin: surplus supply = falling rents; Chicago’s steady growth is due to limited construction.

• Sun Belt Player S2 Enters Chicago

  • Scott Everett’s S2 Capital, known for Sun Belt rides, now leaps into Chicago, acquiring the famed Ovaltine Apartments (345 units, $100M+).
    • “All kudos to Scott because he had the same type of problems that other folks had and has worked through them and is now playing offense.” — Will [11:18]

• Market Cycles Wisdom

  • Takeaway: The surest bets become shaky, and ‘uninvestable’ cities turn to gold when the fundamentals align.

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Main Story 2: Stadium Arcadium — Sports, Subsidies & Surrounding Goldmines

[13:35 – 21:53]

• Kansas City Chiefs’ $2B+ Public Funding Win

  • Chiefs secure jaw-dropping public subsidies for a new Kansas stadium; this is emblematic of a national trend.
    • “It’s unbelievable how big a gimme this is. It’s stupendous.” — Hiten [13:48]
    • The real estate and ancillary development (hotels, retail) is the windfall—teams profit from their venue’s surrounding action.

• Why Stadiums Matter in CRE

  • Increasingly, sports teams’ value is underpinned not by games or streaming, but by the real estate unlocked: year-round concerts, events, hotels, retail.
    • “What supports it is the other 150 nights a year when you can have Bad Bunny or whomever in concert...” — Will [14:55]
    • “Everything’s real estate. The Chiefs...all of this is real estate.” — Hiten [14:54]

• The ‘Anchor Asset’ Effect

  • Stadiums now regarded as ‘anchor assets’ that catalyze neighborhood transformation.
    • Examples: Chase Center (San Francisco), Battery (Atlanta), Nationals Park (DC), Barclays Center (Brooklyn).
    • “They can be really catalytic, but especially if you own all of it around.” — Will [16:15]

• ROI Skew: Owners vs. Public

  • Public subsidies disproportionately benefit team owners and developers—returns for taxpayers are dubious.
    • “The ROI seems to be quite handsome for everyone except the public.” — Hiten [16:22]

• Political & Financing Machinations

  • Stadiums’ success often hinges on political will and being seen as ‘builders’ by politicians—despite being money losers for cities.
    • Stories of stadium deals in Atlanta (Centennial Yards by the Ressler brothers, Tony and Richard; Tony also owns the Hawks and founded Apollo and Ares), Boston (Kraft family, new MLS stadium), Philadelphia (76ers’ bitter parking fight), DC (Commanders return with $1.1B public fund), NY (Dan Doctoroff’s West Side stadium vision catalyzed Hudson Yards via mega-development financing).
    • “Some of the most successful large scale developers...really understand the political machinations of financing things like this.” — Hiten [18:52]

• Future Model: Live, Play, Work Next-Gen Stadiums

  • Incorporation of immersive event spaces like COSM; stadium-anchored, mixed-use destinations are the model.
    • “You’ve got the real stadium for the live experience. You’ve got cosm...and then a whole smorgasbord of retail, F&B…” — Hiten [19:41]

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Main Story 3: Brooklyn Walkups Go Institutional – Big Freddie Mac Refi

[22:02 – 26:39]

• Carlisle & Greenbrook’s $500M Freddie Mac Refi

  • Institutionalizes Brooklyn walk-up ownership, once considered unbankable by large lenders.
    • “Carlisle and Greenbrook have just got a close to $500 million refi on their walk up portfolio in Brooklyn...They’ve done it and they’ve done it via Freddie Mac. So pretty interesting deal.” — Hiten [22:02]
    • Portfolio: 260+ properties, ~1,000 units, all in choice neighborhoods.
    • Debt basis: ~$500k/unit, rents are market rate and properties held in the favorable 2A/2B tax class.

• What’s New and Why it Matters

  • Freddie Mac typically avoided small-unit assets; this opens liquidity for these portfolios.
    • “They did this refi...this means they’re staying in it for a while. Cash flow must be good. They think there’s further juice on the bone here.” — Will [22:32]
    • Freddy’s due diligence, liquidity, and back-office expertise allow this new wave of institutional capital; potential model for others with generational portfolios.

• Broader Debt Market Implications

  • Post-Signature Bank and NYCB retreat, agency finance fills the gap—could lead to more trades and upgrades in Brooklyn’s “yuppie” multifamily scene.

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Notable Quotes & Memorable Moments

• “Would you rather have a couple thousand apartments in Chicago or one piece of dirt in Miami?” — Hiten [08:06]
• “You don’t need a ton of population growth if you don’t have supply. You just need enough. And there is enough.” — Will [07:24]
• “Everything’s real estate. The Chiefs, Bob Kraft supporting MLS...All of this is real estate.” — Hiten [14:54]
• “What gets financed gets built. And I think the most successful stadium developers understand that.” — Hiten [18:49]
• “The ROI seems to be quite handsome for everyone except the public.” — Hiten [16:22]
• “With Freddie playing this space, it sort of creates an opportunity to finance these things. Because as NYCB retreated, Signature bank went under. There were fewer and fewer options for landlords to finance portfolios like this. So if the agencies are coming in, that’s a pretty good sign.” — Hiten [25:26]

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Timestamps for Key Segments

• 01:49: Quick hits: Saks bankruptcy, Ashkenazy’s Neiman Marcus deal, DigitalBridge-SoftBank saga
• 05:59: Chicago as a resurgent CRE target; Sun Belt pain, supply/demand thesis
• 08:11: AIMCO liquidates; Latera’s major Chicago buy
• 09:34: Chicago rent growth, supply/demand, resilience vs. Sun Belt
• 11:06: S2 Capital jumps into Chicago multifamily
• 13:35: Stadium development deep dive; KC Chiefs, public subsidies
• 14:55: Stadiums as real estate catalysts; year-round profit, not just game days
• 16:22: ROI for public vs. private; politics of stadium funding
• 17:27: Atlanta/NYC stadium development as economic anchors
• 19:41: The rise of immersive stadium-adjacent developments
• 22:02: Brooklyn walkup portfolio refi; Freddie Mac’s role and market impact
• 25:26: Agency finance: the new era for small-unit portfolios

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Tone & Style

The conversation is fast-paced, irreverent, sometimes self-effacing, and always insider-savvy. Hiten and Will eschew buzzwords in favor of candor and dry humor, punctuating deep dives with playful quips and war stories. The emphasis is always on what moves markets and the unseen forces shaping CRE.

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Final Takeaways

• Chicago is emerging as a surprise winner in 2026’s multifamily investment landscape—thanks to disciplined supply, stable demand, and capital fleeing boom-and-bust Sun Belt markets.
• In sports, it’s not just about the game; stadiums are now billion-dollar transaction drivers, serving as the nucleus for urban redevelopment, albeit often at public expense.
• Freddie Mac’s willingness to finance Brooklyn walk-up portfolios signals a tidal shift, promising new liquidity and institutional attention for an asset class once written off.
• Across all stories, the throughline is that what gets financed—by public, private, or agency money—gets built, and those who control the capital flows shape cities.

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For more CRE deep dives, subscribe to The Promote Podcast or read the newsletter at thepromote.com

Transcript

[A]

I want to go to Chicago.

[B]

I warn you, Jedediah, you're not gonna like it in Chicago. Wind comes howling in off the lake and gosh only knows if they ever heard of Lobster Newber.

[A]

Welcome back to the Promote podcast, your insider guide to the money and mania of the CRE markets. I'm Hitan Samtani.

[B]

And I'm Will Krasny.

[A]

2026, baby. Happy New Year to all. We have big plans here at the podcast. Expect fun guests behind the deal, dives, live shows, and a lot more goodness.

[B]

Speaking of goodness, those of you on YouTube right now can see our faces for better or for worse. That's right, we're now on video. My bed sheet is working perfectly.

[A]

We're ready to go as everything with us, it's all a work in progress. It's gonna keep getting better and we'll be soon spamming your Instagram feeds as well with a lot of clips coming. Cause we know you can't get enough of us.

[B]

We're gonna be on your connected set TVs too. Cause I was listening to the Town this morning and apparently Instagram's going there. But anyway, pretty packed docket to start the year.

[A]

Seriously. America's second city is now going top of mind for national multifamily players. We're Gonna break down two significant Loterra's monster, Aimco buy and S2's debut in the market. We then slip into our jerseys and look at the arcane world of stadium development and all the freebies and surrounding action that comes with it. Finally, we schlep the streets of Brooklyn where Carlisle and Greenbrook have just pulled off a massive Freddie refi of their walk up empire. A shout out to our sponsor for this episode, LoanBoss. They're an industry leading CRE debt management software and you'll hear more on them in a bit.

[B]

All right, so a few quick hits before we get into our main topics.

[A]

Yeah, this is a nice new feature that I think people are enjoying. Let's go. What do you want to start with?

[B]

All right, so the first is Saks is potentially filing for bank bankruptcy.

[A]

No way. That is totally unpredictable.

[B]

Who could have seen this coming? Except everyone. Big Ben billionaire Ben Ashkenazi is tangentially related to this hatan because of a transaction in Los Angeles recently.

[A]

Yeah, so Ashkenazi, who has been getting walloped in the press and basically in his business for a couple years, is now on the offense again. He claims that he's raised $750 million to go shopping generational opportunity all that and he just went and bought the Neiman Marcus in Beverly Hills. The superstore prime Beverly Hills. I think it's like a block long or a couple blocks. You want to guess what he paid?

[B]

I think it's a little bit unsure. What did he buy and then what. What does he. What did he pay?

[A]

Yes, this is true price that we heard that he paid $50 million.

[B]

That feels quite cheap.

[A]

Yeah, that is pretty cheap. He must have squeezed. I would have paid to be in that room with him. And whoever the counterparty on the Saks.

[B]

Fifth, Richard Baker from his dad was a massive shopping center developer and he bought Saks originally. A big reason for it was the owned real estate. The Saks building in New York ostensibly was worth X billion dollars and you got the OPCO for free.

[A]

Is this the one that we work took over at some point?

[B]

That was the Lord and Taylor building. Lord and Taylor, yeah, yeah. Which good friend of the pod, Connor Hussey worked on back in the wework days. What's interesting though is that they sold this building to Ben because they had $100 million debt service payment due at the end of December and apparently Ben closed in like a week.

[A]

He made it very clear in the press release. It says according to sources involved in the deal, this transaction start to finish seven days. He wanted people to know apparently tried.

[B]

To fill the coffers for that debt payment. They missed it and potentially may be filing. They also own some iconic real estate on 5th Ave. Right south of the park because they own Bergdorf Goodman. So they have the iconic building next to the Amman. So your beautiful view from the Amman of the Bergdorf H Vac equipment and they own across the street as well. So they do own some interesting real estate that could be put in play because who knows how the collateralization works in their ABS facility.

[A]

There's some action here.

[B]

Interesting things that could be happening.

[A]

Totally. And we talk about this a lot. Right. Like a lot of your highlight real buys over your career are often set off by some giant displacement somewhere else. Right. And this company imploding could throw up a lot of opportunities. And then we've got SoftBank, which is.

[B]

Buying our guy Gadzy, not the outcome. I think anyone affiliated with Digital Bridge ultimately wanted or thought they would have in the peak days of 2021 or 2022.

[A]

Yeah. If you remember, Mark Gansey who we've had on the pod took over what used to be known as Colony Capital, which is Tom Barrick's firm and he basically reinvented it as owning the digital railroads basically became like the king of cell towers, pioneer in the data center space. And he basically reinvented Digital Bridge as kind of the conduit to the AI economy.

[B]

And he was completely right that that bet worked out perfectly. But for whatever reason, the market hasn't really agreed with the stock. I think this takeout, some investors have already been saying that they're going to vote against it. They think it undervalues it because again, they're right in the zeitgeist.

[A]

The valuation is what? 4 billion?

[B]

4 billion including debt.

[A]

Seems small, right?

[B]

Yeah. And it was only a 15% premium to VWAP from where it was trading before.

[A]

Say that again, I love that word.

[B]

VWAP evaluated average pricing. If you look at how much capital Digital Bridge manages, it's over 100 billion, I think. But a lot of it is sidecar, lower fee. And so not all of it is that juicy, you know, 2 in 20.

[A]

This is not the first time we're hearing about potential MA activity with Digital Bridge. I want to say nine months ago there was a rumor floating that Josh.

[B]

Harris's family firm, 26 North.

[A]

Yeah. They were in talks to pick this up. Credible rumor that one.

[B]

It was very credible. It was credible.

[A]

Let's leave it at that. All right, so big couple things there that we're going to be watching. But right now let's go get malorted, baby.

[B]

Let's go to Gibson's.

[A]

What is happening in Chicago?

[B]

Chicago, which a lot of folks would say is uninvestable. And if you think of the guys who are investing in Phoenix and Scottsdale, Austin, you know, Chicago, liberal, crime, corruption, all of it.

[A]

Yeah.

[B]

So give it a try. Cook county is the one true landlord that I actually do agree with. It's on the come up. And what Chicago is what, the fourth largest city in America? Third largest.

[A]

It's up there historically been a very important center of real estate as well. It's the second most important skyline in the country for sure.

[B]

And it has been a place where people have lost their shirts, particularly on the multi side, on the development side because of the aforementioned population loss, perception of crime. The taxing in Cook County.

[A]

Covid was pretty harsh on the city. I mean the last three years or so there's been one bad headline after the other about the devastation in the especially in the office market. The luxury sector hasn't fared very well either.

[B]

Ken Griffin has left as well.

[A]

Very publicly broke up with the city. Yep.

[B]

Very publicly. Yeah. It's not you, it's Me? Actually, no, it's you. I don't love you anymore. Since when? Now, just now. However, as folks have really been licking their wounds in the Sun Belt and some of the folks who are buying in this market right now are folks who then famously got their teeth kicked in, in the Sun Belt in the last couple years. They're buying because there's not really as much supply.

[A]

Yep.

[B]

You don't need a ton of population growth if you don't have supply. You just need enough. And there is enough. And obviously Chicago has all the economic activity you could want.

[A]

And.

[B]

And just in the waning days of Q4, more than half a billion dollars of multifamily transactions.

[A]

There's one particular one we want to get into first. So aimco, which we've talked about, Will had a pretty fun rant a few episodes ago about more REITs should liquidate. Right? Yes, AIMCO's been on that train for a bit.

[B]

Good for them.

[A]

They announced their intent to liquidate and then they've been selling off some big things. So one mega transaction in Miami that just closed was Oak Row closed on their 500 million plus dollar deal with AIMCO for a parcel on the Brickell waterfront. And our boy Vlad Daronen has just come in on that as well.

[B]

Would you rather have a couple thousand apartments in Chicago or one piece of dirt in Miami?

[A]

Well, we shall see. So that's one of their mega transactions and then another one, which was honestly quite a shock to me. Latera is stepping in here and paying what, 455 million, something like that?

[B]

Yeah, 455 scheduled to close end of Q1.

[A]

How many units are we talking? Let's have a look. 1500 units. Funky 300k a door.

[B]

Let's say roughly plus or minus. Yeah.

[A]

So not a distress thing or anything?

[B]

No, no, no, this is a. Aimco owns good stuff. So aimco, I did give them their flowers for doing the right thing and liquidating, but it is a little bit sad because that was I think at one point the largest or second largest apartment owner in the country. And it's just gonna be gone. It is no longer.

[A]

For people who might not be familiar, Air Communities kind of is a. Is a child of amd.

[B]

Split it out. Yeah. So you had, yeah, you had Air Communities and then you had AIV and air communities.

[A]

The defining apartment transaction of 2024 sold to Blackstone for 10 billion change.

[B]

Yeah.

[A]

And that's the one that gave everyone, quote, air cover to invest in multiple.

[B]

Exactly. Which turned out to be not True. So aimco selling their good stuff. And again, I think the buyer is interesting because it's not a Blackstone, it's not an fpa, it's not a Cortland, it's Litera and Latera's equity on this rest. Is there equity?

[A]

What is Respark?

[B]

I do not know, to be quite honest.

[A]

That sounds like an item for the.

[B]

Promote that we always talk about how narrative drives valuation here. And the vibe. Vibes really, really matter. The vibes are much better and it's been backed up by the data. So apartment occupancy hit over 95% in mid-2025, which is way above what Chicago's 10 year average was. And rents actually grew in 2025, which is a rarity nationally. I think they were up four and a half percent year over year, which is the second fastest among the big US Metros to what's gone on in Austin. Yeah, parts of Florida, Phoenix, Dallas.

[A]

I think that's a good point. And also crucially, unlike some of the markets you just mentioned, Chicago's kind of avoided the boom and bust roller coaster on the multifamily side at least. Like it's not been the thing that you think about when you think of a ripping market, but it's just kind of continued its climb.

[B]

It's a function of supply because again, we're looking for a supply demand imbalance. And you can have amazing demand and amazing supply, a ton of supply, and there's no imbalance. You can have like, okay, demand and no supply and a really good imbalance. And I think what we're seeing in Chicago is more the latter.

[A]

One good contrast to make maybe is with Austin where supply kind of just went absolutely bananas and then rents started falling.

[B]

Also in Austin, you have the same problem you ostensibly had in Cook county with the taxing authority.

[A]

Well, they also had the traveling HFC shenanigans there. This is true. This is very true.

[B]

Interesting to see folks make big bets here. And speaking of the Sun Belt, there's a notorious Sunbelt investor, S2, who famously rode the last cycle like one of the guys. I say like tides. Obviously they had not had as many problems as Tides.

[A]

I think we should be clear that Scott Everett's S2 has somehow managed to not only stay afloat, they're actually actively expanding. Which kudos to Scott and whatever he's doing there.

[B]

All kudos to Scott because he had the same type of problems that other folks had and has worked through them and is now playing offense. So kudos to him. Yeah. Interesting to see him make a huge leap into Chicago. Their head of acquisition said that they've been looking at this for a long time and they, you know, diving in feet first, spending over 100 million bucks.

[A]

This is what, a 345 unit garden in Los.

[B]

The Ovaltine Apartments, which. More Ovaltine, please. That's why I want all Secret Squadron members to drink Ovaltine every day. Yeah, it was the Ovaltine factory.

[A]

Oh, cool.

[B]

We talk a lot about in real estate, about cycles. And the thing that seems like the sure bet at a certain moment in time is almost guaranteed to not be. That's just how it is. So whether it's Florida becoming a tech bubble.

[A]

Actually, that's right. I'm absolutely perfect.

[B]

I know. Or New York or la, or Chicago becoming uninvestable, these tides turn because at the end of the day, it's all about supply and demand. We over complicate this. Bad news means no supply, which means rent growth eventually. And that's sort of what we're seeing with Chicago. Like I said, little bit facetiously, would you rather have one dev site in Brickell or would you rather have 1500 class A apartments in Chicago? I know what I would take.

[A]

So, will you violate any debt covenants recently?

[B]

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

[A]

Ooh.

[B]

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

[A]

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

[B]

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.

[A]

They've just got it sorted here for you.

[B]

Much better. So thank you Lone Boss listeners.

[A]

Check them out@ LoneBoss.com that's LoneBoss.com and tell them the promote sent you.

[B]

Five eighty five ready. So the Chiefs got a massive public funding package to build a new stadium.

[A]

It's unbelievable how big a gimme this is. It's stupendous.

[B]

I know, man in the state of Kansas and I know the Kansas City Chiefs played Missouri. Just roll with it. It's okay. They're moving back to Kansas stadiums broadly and the surrounding real estate have become massive profit generators for teams and their owners. And it's funny because there's so much talk about how these teams keep increasing their valuations, and a lot of that is due to the real estate surrounding the team itself. If you look at the Chase center in San Francisco, I mean, they're hotels from Starwood Capital Group. You've got the Battery in Atlanta. It's a who's who of real estate developers. And a lot of this is based on big, big, huge, huge public subsidies.

[A]

Absolutely. I think this is what we're talking here about a north of $2 billion package that's coming in.

[B]

That's real money.

[A]

There's some Muni Bond goodness here as well, as there always is.

[B]

Again, the Chiefs are owned by the Hunt family, like one of the richest families in America. And by the way, speaking of Silver going crazy recently, highly recommend everyone go Google Bunker Punt Silver. Okay, really, really good. But what we really wanted to talk about and one of the reasons why we love doing this podcast is everything's real estate.

[A]

Yeah.

[B]

The Chiefs, Bob Kraft supporting mls. Like all of this is real estate. The CIM backed revamp of Atlanta's downtown. All of these things are about real estate because you don't just make money off the team, you don't make money just off the streaming revenue. Those don't support the valuations. What supports it is the other 150 nights a year when you can have Bad Bunny or whomever in concert, you can have professional bull riding, you can have all of these other things that just print money because you have huge fixed costs. Right. And the more folks you can get in there, they can stay at the hotels nearby, they can shop at the shops. And these things can really serve as a catalyst.

[A]

What's funny is I just did a thing for the B1M on the line in Saudi Arabia, and the line's been calling them anchor assets. Right. Basically an asset that is incredibly expensive and complex, but then can catalyze development and activity around the area. In Saudi Arabia's case, maybe. Maybe a bit of a mixed bag, but it generally has been a huge economic driver for real estate, at least in, you know, functioning American cities.

[B]

D.C. is a huge example. So I grew up the Nationals played at RFK Stadium. They got Nationals park over in Southeast. And that area was bleak, is putting it politely. And now it's like the yuppified, gentrified apartment communities everywhere with look at Barclay center as well.

[A]

Right. In New York I mean, oh, same thing.

[B]

I lived right next door to it for quite some time. And these, they can be really catalytic, but especially if you own all of it around.

[A]

One point we should make is that the ROI seems to be quite handsome for everyone except the public.

[B]

It never really does seem to work out. You go back to any given Wednesday when Bill Simmons show came out and the commercials were like, I believe billionaires should pay for their own sports stadiums.

[A]

What I think developers understand about politics is like, you need to be, as a politician who's running for office again, you need to be seen to be building stuff to realize improvements in your community that are very visible. And even though that politician probably knows it's going to be an absolute money spilling exercise, you're the guy who brought the stadium to the community. Like there's something to that, right? Yeah.

[B]

And these teams are like part of the public trust. Right. And so they. Can we talk about billionaire flight from certain areas. These teams threaten to move all the time too. And it's like, you don't build us a stadium, we're going to go. And yeah, the ROI is not great. But you know what else is also not great? The Colts leaving Baltimore.

[A]

Yeah.

[B]

It's so funny because I think about this relative to the cable deals, like you can't afford to do it, but you can't also afford to not do it.

[A]

One particular area that's fascinating to me is Atlanta. We've talked about Atlanta before on this podcast when we talked about the OG Tom Cousins. But Centennial Yards is a great example of all this economic activity around a sports anchor development. So the brothers wrestler are teaming up on that one. It's Richard Ressler, the head of CIM Group and somehow his more successful brother Tony. I just think about this all the time. Imagine being the founder of CIM and being the less successful brother. That's crazy.

[B]

Well, I mean Tony. Tony Ressler could be a baggage handler and he'd be more successful because he married Jamie Gertz.

[A]

This is very true. So Tony co founded Apollo and founded Ares as well. And he owns the Hawks too.

[B]

He does. In a consortium with many other people. Including Grant Hill, the Magic player. Yeah.

[A]

Oh, cool.

[B]

Grant Hills in there. They turned that whole area in Centennial Yards. The Hawks and the Falcons stadiums are adjacent to it and completely shifts the center of gravity.

[A]

Yeah. And again, they're getting half a billion dollars plus of muni bonds, obviously. Right. You can't make these things. Some of the most successful large scale developers are also some of those people who really Understand the political machinations of financing things like this. We've spent a whole episode kind of talking about Related and Hudson Yards and how they unlocked these incredible sources of financing. SAF, city, state, wherever you can think of. EB5, Israeli money, all of that. What gets financed gets built. And I think the most successful stadium developers understand that.

[B]

What gets financed by non financial institutions.

[A]

Very, very important clarification. Thank you. One thing I wanted to say about the Centennial Yards makeup, which I think is fascinating and kind of a sign of where this stuff is going, is you have your traditional stadiums, right? You've got the Hawks and the Falcons, then you've got cosm. Have you been to Kosmo?

[B]

I have not.

[A]

I think you'll really dig it, frankly.

[B]

Like, I wasn't really familiar with it before you put it on the docket.

[A]

I think you'd really dig it. I went for a football game. I don't even like football. I went to a Ducks game there. It is immersive, man. It is as close to the real thing as you can get. And it's probably a lot more comfortable. So the way that these things are happening is like you've got the real stadium for the live experience. You've got cosm, which is kind of your next best thing for the corporate events and all that. And then you've got a whole smorgasbord of retail, F and B and all that, right? Like that's. That's the model here.

[B]

Would you say that it's live play work? No. This is one of these types of stories that if I say, look for a red car and you see red cars everywhere.

[A]

I should confess friend of the pod, Ian Ross. Ian had sent me this Kansas City thing, like a couple weeks ago. I was like, ah, it's infrastructure. Not really our thing. But then you put it in the docket. I'm like, guy, he was right.

[B]

These are a list of other things that are going on right now. So Kraft group is struck $140 million deal with Boston and Everett for a new soccer stadium for MLS. So MLS, like the ninth biggest sport in America. Philadelphia 76ers are trying to build a new stadium in downtown Philly. David Adelman, who's one of the owners, runs a student housing company. He's leading the charge there. Hugely acrimonious with the city about parking, location, all those things. The commanders DCs giving $1.1 billion towards a fund to get them back from Maryland because they were in Landover, which.

[A]

Developers are in the mix there.

[B]

I Actually not sure off the top of my head.

[A]

Okay.

[B]

But I think that DC again, giving up the ghost a little bit. Chase center in San Francisco just happened. We mentioned the Battery in Atlanta. Basically anytime you see a big sports team sell now you can see the.

[A]

Real estate developers kind of go, yeah, the best position to be in is being an actual developer who owns a sports team. Steve Ross.

[B]

Right, Steve Ross. I mean this was in the teams now themselves. A lot of the value, as we've mentioned up top is from the real estate itself because you make money on days that the team's not playing. And so owning all that real estate is really, really important, especially for a franchise value.

[A]

This was kind of Dan Doctorov's initial claim to fame.

[B]

Oh, right.

[A]

He wanted to build that stadium in the, on the west side of Manhattan.

[B]

Where Hudson Yards ultimately ended.

[A]

Right, exactly. So that the, the stadium didn't come to Ferocean. I think he wanted it for the Olympics. That didn't come together. But apparently all the legwork and all the conversations that Dan and his team had around the stadium eventually catalyzed in this like incredibly massive and very successful mega project for related called Hudson Yards.

[B]

These things take more than a village. They take almost a nation state. And so you need the nation state type guys to get it done. And that's Dan Dr. Off. That's related.

[A]

But it all starts with a dream in a ballpark.

[B]

Indeed.

[A]

We've talked about this portfolio before, but they've just pulled off the thing that we thought they would pull off. Carlisle and Greenbrook have just got a close to $500 million refi on their walk up portfolio in Brooklyn. Like this empire of walk ups, they all fall under that 2A 2B tax class designation. And I think it's really interesting generally been fascinated at the promote with institutionalizing the formerly uninstitutional. Right. That's a big theme of this podcast. And they've done it and they've done it via Freddie Mac. So pretty interesting deal.

[B]

Absolutely. I think at a high level the most interesting thing to me is that they did this refi which Freddie Mac loans. I mean I don't know whether they're a floater or not, but this means they're staying in it for a while. Cash flow must be good. They think there's further juice on the bone here because you don't refi and then immediately turn around to sell. So they're going to be in this for a little while longer. Maybe they're going to go back and buy More.

[A]

And what's the prize here? It's 260 odd properties, just over a thousand units, nicer neighborhoods in Brooklyn.

[B]

It's just like a 500k unit debt basis. Just. I mean, I get it. It's like these rents are really good. They're all free market. They're all tax class 2A, 2B. Generally like really good micro locations. Man, that's just a big number, you know.

[A]

Well, I mean Brooklyn's only going one way, right? When it comes to rents. Yeah, these are like yuppie neighborhoods.

[B]

Absolutely. Though we'll see what Comrade Mamdani has to say about that with his executive.

[A]

Orders about streamlining, preparing something now. But we're going to talk soon about this whole Pinnacle rent statements. It's, it's.

[B]

Yeah, I almost put that in this week but I want a more digest.

[A]

It's quite interesting. I was looking at the bankruptcy docket late last night because I'm a loser like that. Anyway, so Freddie hasn't historically financed. I was talking to some insiders in the deal. Freddie hasn't historically financed buildings that are under six units. Carlyle and Greenbrook had to put in.

[B]

Some work here definitely. I mean the SBL program I think is great. Provides a ton of liquidity for smaller assets. And again, SBL I think is 6 million and lower for Fannie and 9 million and lower for Freddie. I think that's right.

[A]

Just to be clear, I. We're not sure which specific Freddie product was in the mix here. It could be the linked portfolio thing. We're not clear so we're not going to get into all of that.

[B]

Historically what you do is if you either go to a bank or you go to Fannie, Freddy spl. Fannie Freddy SPL also was where a lot of the fraud took place. Not the best financing or financial records, not the best management. So bringing in that type of back office and talent to this with Carlisle and Greenbrook, you're able to push the get this type of execution. Because even if you were, I think a like who's that guy in Red Hook, the former cop who owns several hundred million dollars worth of real estate.

[A]

I know who you're talking about. I don't know that name.

[B]

Yeah, like that guy couldn't go get a Freddy sbl. That's the stuff you need like a Carlisle and a real capital markets team. Like beating up Freddie for.

[A]

Yeah. From a management perspective this is probably a good thing because Freddie historically is known to take due diligence, building violations, all that stuff very seriously. So if they've gone and done it through Freddie, Fair to assume the stewardship will be probably pretty good here.

[B]

Now that's a good thing. They were very specific with their buy box. They were not doing the turnarounds. They were buying from the guys who did the turnarounds.

[A]

Yeah, and that's a very important point. They only bought market rates. Some of the units, some of the buildings that they bought became market rate through something known as the sub rehab.

[B]

And I think they stopped buying. That, correct?

[A]

That is right.

[B]

Because of the paperwork issues and things like that that other landlords in Brooklyn are facing right now.

[A]

That's correct. With Freddie playing this space, it sort of creates an opportunity to finance these things. Because as NYCB retreated, Signature bank went under. There were fewer and fewer options for landlords to finance portfolios like this. So if the agencies are coming in, that's a pretty good sign.

[B]

It's a very good sign. And there are a lot of these types of portfolios that exist, not necessarily with this institutional sponsorship. So if that's available for folks, those generational portfolios, you might see trade. We talk about how the debt markets really drive liquidity. And anytime you have a geography or a product that was not getting the most liquid debt markets, that's where pricing wasn't always peak and that's where it was harder to sell things. And the fact that you can now get agency financing for this type of portfolio at this type of scale, you're going to see more. Not only are you going to see more of these types of transactions, you're going to see a lot more of these types of financings for existing folks because they're going to go say, hey, Carlisle and Greenbrook did this. I've owned these forever. I've managed them better. Yeah, why can't I?

[A]

That's it for the promote podcast. This week the Windy City has quietly gained tailwinds that are pushing Sears Capital in a Brooklyn walkup empire. Refi means more institutional players may schlep to freddy for cash. And sports stadiums could be a goldmine for those who know how to play the system.

[B]

Shout out again to our sponsor loan boss. Be like me. Stay out of default, technical and otherwise by checking out their CRE debt management platform. Find [e-mail] and remember, leave us a review on Apple, write us with feedback and [e-mail] and give us compliments on our looks on YouTube and Instagram1031tv. And also thank you, Joe Fingerman. Amazing review. Made my week.

[A]

I love that review, by the way. Joe is a former top dog at Signature bank, and he called us the new Lois Weiss and Charlie Bagley in a listenable format, which I thought was tremendous.

[B]

Well done, Joe.

[A]

We'll be back next week with more CRE Insider goodness. William. Thank you, dude.

[B]

Thank you.

[A]

Ciao, Sam.