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CW's Inside Man & Newmark's Weekend at Bernie's · The Promote Podcast

• Hiten Samtani (00:03) Given Will's breakout success here on the promote pod, I've uncovered a rogue plot he's cooking up to exit with all our key assets and secret sauce. Will Krasne (00:10) It's not personal. It's business. Hiten Samtani (00:12) You used your work email to download the following promote pod underscore warmleads.xls, promote pod underscore advertising contracts dot XLS. Promote pod underscore all dockets dot PDF. What have you got to say for yourself? Will Krasne (00:25) Banana daicary. Hiten Samtani (00:36) Welcome back to the Promote Podcast, your insider guide to the money and mania of the C markets. I'm Hiten Samtani. Will Krasne (00:41) And I'm Will Krasne Hiten Samtani (00:45) A shout out to our sponsors, Bravo Capital, a leading HUD and bridge lender that lives and breathes cap stacks. Will Krasne (00:50) And Loan Boss, your mission control center for your CRE debt. And I know people thought that I was just like Ron Burgundy reading Loan Boss, best in class CRE debt management software, but no. Hiten Samtani (01:01) You internalize the brand so well. Yeah. After a marathon trilogy covering the Reichmanns and our conversation with JDS's Michael Stern, both of which you should definitely go check out, it's nice to be back to regular programming. This week we put on our tokes, that's beanies for you Yanks, and we head to the TSX where Meyer Orbach and Josh Gotlib are on a fascinating multifamily caper with their REIT Go Residential. We then take a backdoor into a special service award, with Greystone accusing rival CW Capital. of stealing trade secrets to poach its business and talent. And finally, we head to a palatial, soon-to-be-empty office at 125 Park, where we take stock of the legacy of longtime Newmark CEO, Barry Gosin And what exactly a new leader is going to be coming into. Will Krasne (01:47) Before we get into all that, let's kick it off with the punch list, our signature rundown of the newsiest news and CRE. First item on the punch list, given that we just talked about the Reichmans for three episodes, is that Canary Wharf is in the news. So Eight Canada Square, which is owned by the Cutter Investment Authority, is going to be completely redone for close to a billion pounds or a billion sterling. As I learned, a billion quid. Or a billion quid. That's being led by the Canary Wharf Group, jointly owned by QIA and Brookfield. Hiten Samtani (02:24) Brookefield's classic stock and trade, which is the RPT, the related party transaction. Will Krasne (02:29) These tentacles from the Reichmans are still around. Hiten Samtani (02:33) Okay, next one. We've talked quite in depth about this project, 800 Fifth Avenue, which is gonna be this ultra-luxury Robert A. Amstern condo right at 61st and 5th, like kissing the park, probably the nicest location in New York. Naftali, the developer, is now out for his financing, and man, this is quite an incredible number. But he's looking for $1.3 billion. Fine, but it's only 52 units. So that's a loan basis of Twenty five million bucks a unit. Astonishing times. Will Krasne (03:03) He's projecting sell out just shy of three bill and again just for fifty-two condos and if you can't do the math, that is north of fifty million a condo. Hiten Samtani (03:14) You know what the crazy thing is, Will? Will Krasne (03:16) Honestly, I think you're right. Because this is the best block. One of the things on the Michael Stern podcast, which I thought was so interesting, is that he called Walker Towers location itself and B plus A minus block in Chelsea. Well, A plus isn't good enough for this. Hiten Samtani (03:32) Site Manhattan's high watermark currently has been set on Billionaires Row, which is two twenty Central Park South. But that for many New Yorkers is kind of the wrong side of the park. Will Krasne (03:42) Yeah, you wanted to be on Central Park West or Fifth. So this is about as good as it gets. To your point about the high water mark in New York, I think that you're gonna see a quarter billion dollar unit here. Hiten Samtani (03:54) All right, next one. B reads out of the self storage game. Will Krasne (03:58) They are. They're selling their last seventy nine assets. They've been slowly rolling out of this over the past couple of years. Hiten Samtani (04:04) Is this not secular tailwindy enough for them or what? Will Krasne (04:07) One of the themes of the podcast is what is in the zeitgeist, what is investable, the areas that have those secular tailwinds that allocators want to put money behind. And self-storage, you know, has had a lot of supply. And I think on the the lower end, there's really been a bit of a bloodbath. And Blackstone is just out of it. Not just are they out of it though, the PR statements around this are sort of masterclass in laying out what your vision is. Hiten Samtani (04:31) This is pretty classic Blackstone. They said today B Reed is about ninety percent concentrated in data centers, industrial, and rental housing. And this positioning has been key to our recent performance. When they break up mentally with an asset class, they start positioning the rhetorical machine to reflect that. And when we saw all these office deals go bad for them, do you remember the classic? This represents less than two percent of our owned portfolio. Now it's down to one and a half percent. Blackstone's mortgage trust has been making similar statements about their loans in that asset class. I don't love you any. Will Krasne (05:03) Since when? Now. Just now. Hiten Samtani (05:07) Alright, next one. Ari Emanuel's getting into showbiz in a very different way this time. Will Krasne (05:13) He is, he's becoming a physical, live Showbiz landlord. Hiten Samtani (05:20) We should do a special episode on the Niederlanders, the Schubert's. I just find that whole space fascinating and it's not something I know much about. Will Krasne (05:28) Be candid me either. The only thing I really know about Broadway is I talked to a VC guy one time who runs a real firm and asked what's your best investment ever. And he said, yeah, my mom worked with Lynn Manwell, Miranda's mom. And so we were first money in Hamilton. God. So Ari Emanuel has started this company called Mari, which is really focused on live. So I think they own a bunch of tennis tournaments, City Pie, the Miami Open. His thesis is essentially that with AI, we're gonna have more leisure time and that leisure time is gonna be spent on leisure activities and live sports events, all that. And one of the things that apparently we're gonna do, when our AI overlords give us all basic income, is go on Broadway. And so he just bought ATG Entertainment and it makes him one of the largest landlords on Broadway. So they own seven of the forty one theaters. This is Hiten Samtani (06:17) Where Harry Potter and the Cursed Child is, Book of Mormon, some top shows. Will Krasne (06:22) The Eugene O'Neill Theater, the lyric, this is really excellent Broadway real estate. Hiten Samtani (06:27) We've been tracking a little bit what's going on with the sphere in Vegas, which has been such a huge success that they're now expanding out to Abu Dhabi and other markets and bringing in some serious capital to make the Will Krasne (06:37) Maryland. They're doing a mini sphere in Maryland. Maryland. yeah. Hiten Samtani (06:39) Huh, interesting. Next one. I took this one off the docket and Will played one of his cards and put it back on, so I'm gonna let him take it away. Will Krasne (06:49) This is really the domain of another part of the 1031 Empire, our good friend over at the mortgage scoop. So Matt Ishbia, just have to briefly talk about this. He is the CEO of United Wholesale Mortgage, one of the largest residential mortgage originators in the country. Famously feuds with Dan Gilbert. He took the company public by SPAC in the peak ZERP days at 16 billion odd valuation, I think. Total Hiten Samtani (07:13) Cowboy. Will Krasne (07:14) Yeah, total cowboy. And he's young. It walk on at Michigan State, bought the Phoenix Suns and has turned it into Michigan State West. However, the Buy the Suns, he had a massive $4 billion margin loan against his UWM stock. The stock hasn't performed. And then just in the last couple of weeks, stock had paid a very healthy dividend, mostly to him, because that helped him cover his margin debt that he had to buy the suns. And they cut the dividend. Then trying to buy this other mortgage rate, essentially to get more liquidity and reduce their own leverage ratios. And he made this massive rate spin that blew up spectacularly and just blew a hole in their balance sheet. And so got Oak Tree to come in for nearly $2 billion of pref. And the real estate angle here is that in the Suns, he issued a capital call to a bunch of the owners and the owners felt that it was him trying to bleed them out, including a couple of big real estate folks, the Seldons. Yeah, the Seldons from the Midwest who are Big real estate players. Go listen to the Mortgage Cube talk about this. Great article there too. Hiten Samtani (08:15) That's it for the punch list. When we come back, it's time to go. Okay, I'm here with Aaron Krowitz from Bravo Capital. Skilled nursing facilities, SNPs as they're known in the business, you've been diving quite deep in. Talk about a regulatory minefield. SNPs is as complex and intricate as it gets. Will Krasne (08:38) Every state is its own galaxy and operates completely different than every other state. The lenders and operators that got burned very badly historically in SNFs were groups that had cookie cutter approaches who felt like I could roll this stuff up and have the same approach. It's so local. And we say often that if somebody financed a sponsor who did well in Minnesota, who had eight SNFs and they're about to do their first sniff in Florida, that doesn't mean you should finance them in Florida. What we look for often is commensurate experience with a real emphasis on comparable local successful experience a sponsor has had. And we monitor, of course, reimbursements and the regulatory developments that are occurring. Hiten Samtani (09:21) Thank you, Aaron, and where can people find you? Will Krasne (09:23) could find us at BravoCapital.com. Hiten Samtani (09:34) Toronto. Will Krasne (09:36) It's where you go when you really don't want as much scrutiny when you're public. Hiten Samtani (09:41) Your guy with the flip, yo. Flip, your guy, you're you're pass me the phone. And when you want to do some small cap adventures. So Meyer Orbach and Josh Gottlieb, who are two big players in New York City and spent about two billion dollars buying up Sheldon Solo's rental portfolio and JDS, American Copper, they bought that too. So they had this incredibly high-end Manhattan rental portfolio. But to finance the deal, they had to Cram that thing with pref. So they had to figure out some sort of exit. And they found it on the TSX, the Toronto Stock Exchange. Will Krasne (10:16) So let's take a step back though. Let's talk about who Meyer Orbach and Josh Gottlieb are. So Meyer Orbach is a massive, longtime Manhattan affordable, mostly affordable landlord, but has branched out across the country and was incredibly wealthy, incredibly successful. Not anymore. He bought into the Denver Wolves. And then I think it was bought out as part of the Mark Laurie Alex Rodriguez transaction. I see. And then Josh Gottlieb, younger guy. Has really exploded on the scene in New York. The Black Spruce office is in the building where my Rolfer was. True story. Hiten Samtani (10:52) Josh Gottlieb is one of those guys. Never seen a photo of him ever. Felt like he came out of nowhere. I think he's in his mid-30s and he amassed a giant portfolio via Black Spruce. Thousands and thousands of units. And the two of them joined forces. by the way, they also play a cameo in the whole Floyd Mayweather saga, because apparently he invested with them and that went all over the place. But they joined forces here and they went on this spree. Will Krasne (11:15) And these are really choice properties. American Copper, the solo residential buildings really on the east side are super tankers, massive cash flow, really high rents, beautiful product. And the pitch for this REIT was to be New York focused, super high-end. Hiten Samtani (11:31) It was an unusual listing 'cause they did an upreet with just five properties, which is yeah, incredibly rare. And they did this in Canada, which is maybe a little bit more receptive to that kind of thing. Will Krasne (11:41) Yeah, so Canada is sort of where with the regulatory burden of being public and the cost of being public, Toronto has become a much more attractive venue for these types of properties. So yes, they go public with five assets. Those five assets are incredibly valuable. It's a mid-cap, small cap re just on those five properties. And they continue to grow that portfolio with that same thesis, super high end New York, buying some 421A stuff. Hiten Samtani (12:03) They paid off the pref to RXR and the cut their Will Krasne (12:06) Yeah, by going public and then they're using their public currency to go make these acquisitions. The market hasn't loved it. The stocks down thirty odd percent since it went public. And so they're really making a pivot. Hiten Samtani (12:18) They're going big and they're going into the sunbelt. Much of the discussion on here in the past few months has been about these REITs that are stuck in limbo, don't know where to go. One in particular that was having a pretty tough time called HR, Canadian REIT, but had a sizable Sunbelt portfolio. Blackstone was in talks to swallow them up whole. That didn't happen. What has happened is Blackstone bought a bunch of their industrial holdings and a sunbelt portfolio has gone to go. Will Krasne (12:43) Yeah, twenty three properties, over ten thousand units. They got stakes in a couple of other buildings. I think H and R had fifty percent in you know something in Miami and then Jackson Park in Long Island South. Hiten Samtani (12:54) Residents can have it all without having to sacrifice Will Krasne (12:58) Unbelievable. Hiten Samtani (13:02) anything. Will Krasne (13:03) Sounds attractive. This is nearly a $3 billion transaction, but They're not cutting a check for this. Most of it's in Go stock. Yep. And so they don't have to cough up a ton of cash. They're assuming a bunch of the corporate debt and property level debt, which is call it 1.7 billion of that. The mechanics here are what's really interesting. The challenge for these REITs in the US is that they haven't been trading above NAV. So anything you do issuing shares is incredibly dilutive. And that's really the case here because, you know, this is trading below NAV and they're giving away 60% of the company in stock. To go do this. So in theory, like pretty diluted. And I I think there's not really like a market for borrow to short go here, which is kinda interesting in and of itself. But the thesis here kinda makes sense because being pure play one thing, I think the market has said that they want that, but clearly they're just Where for it's more than five properties now in New York, but they don't n totally know what to do with it. So their pitch and part of the the reasoning that Gottlieb gave on analyst call about this is that they need to get bigger and have like more scale and legitimacy. And then that lets them get listed more widely, which then will cause force index buying and drive the price up. Hiten Samtani (14:24) The other thing is it improves their debt situation quite a bit. 'Cause they're assuming quite a bit of favorable debt from H and R properties. Their debt to EBITDA ratio went from twelve point five X to less than half that. Will Krasne (14:36) Though I think what's interesting is they're assuming corporate debt and property level. The property level debt's easy enough. That is what it is. The corporate debt though, I wonder how that's written because again, you've got it's not r even really a change of control because they're buying the assets, not the entity. So how does that work? Yeah, for gazy for gazzi, it's a Hiten Samtani (14:52) Why is it? Will Krasne (14:52) woozy, it's a f well if anyone's read the bond indentures, l let us know. I know we have some TSX experts on here. Far Hiten Samtani (14:58) Away from the glare of Wall Street, there are these fun experiments that are going on in the multifamily space, tapping into different sources of capital. Will Krasne (15:04) I think it's great. I think more people need to do it. Part of it is we over optimize everything because I mentioned the math about issuing stock when you're trading below NAB. But you know what else happens if you issue stock below NAV and buy stuff? You bought stuff. And what if the market rebounds? Yeah. So even if it's not totally optimal, I think it's great. And I think we need more people to be aggressive. And I would love to up list this podcast to the TSX. Hiten Samtani (15:27) Josh, come on the pot. You ever try to book one in agency floater? Will Krasne (15:40) That's a task I haven't heard in a long time. You sit there, deep in the early hours of the morning, copying the model your associate gave you, because you don't totally know what the plumbing is. You pray that it's right, or that in 18 months, it's the next guy's problem because you've already taken another job. Hiten Samtani (15:54) Which is why Loan Boss re-amortizes it every month off the real reset, and it ties out to the penny with the agencies. Will Krasne (16:01) That's big. No more adjustments below the line. Hiten Samtani (16:04) The platform also runs real-time defeasance and yield maintenance. Every prepay convention baked right into the loan. Will Krasne (16:10) So you can price a prepay two years out and know what it costs today. And the look back conventions are already in there. Hiten Samtani (16:15) Listeners, check them out at loneboss.com, that's loneboss.com, and tell them the promote sent you. Will Krasne (16:27) I'm gonna be totally honest, in the world of special servicing, I didn't think there was like a ton of secrets. Secrets? Hiten Samtani (16:33) This is amazing. Greystone special servicing unit is accusing one of their key former employees of stealing trade secrets and somehow using them to poach business for CW Capital, a direct rival in the space. Lawsuit lays everything out, so I thought we could get into it. Will Krasne (16:48) How did this start? Hiten Samtani (16:49) Just for context for people who are not familiar, Graystone is led by a guy called Steve Rosenberg, who has a pretty incredible entrepreneur story that we will get into at some point. Built this big agency lender. He had bought a special servicing division from Andrew Farkas's Island Capital a few years ago. And in 2024, he was ready to shop it. So he started courting suitors. Island Capital was back in the mix. Argentic as well. Torchlight too. Yeah. Torchlight. So all the usual suspects. So CW Capital wanted Greystone to remove this key non-solicitation clause. Greystone said no dice. And so they never gave them the NDA. Will Krasne (17:25) Let's just d like I was gonna say double. Let's Hiten Samtani (17:27) Example click. Will Krasne (17:28) just dig into that. So what is a non-solicit and why is it really important, specifically in a business like this, where human capital is essentially the whole thing? Hiten Samtani (17:40) The client relationship is all that really matters. The actual job is quite commoditized. You really end up working with people that you trust and you like. And that's why it matters. Will Krasne (17:49) And on the non-solicit, you can't go take your whole team. Because again, we talk about for brokerages with human capital, they leave in the elevator every day. And so you gotta keep paying people and it ends up becoming harder and harder. And we've seen it law firms, brokerage, all this stuff. This is a really big deal that they wouldn't waive the non-solicit. So it makes the the whole acquisition a lot less attractive. Hiten Samtani (18:08) About a week after that rejection, David King, one of the Greystone executives in this division, went up to Steve Rosenberg and said, Hey, listen, Island Capital, so Andrew Farkas's company is likely gonna be the buyer here, and I don't foresee a job for myself there. Can you release me from my non solicit? Rosenberg says he's open to discussing it, but importantly, according to this lawsuit, does not promise anything. Will Krasne (18:31) And Graysone then alleges that King made that request though because he was already talking to CW Capital. Hiten Samtani (18:38) Yes. And he used to work at CW back in the day. That's important context here too. Will Krasne (18:42) It's very incestuous. Hiten Samtani (18:43) A few months later, talks with an island affiliate called C4 had advanced. By then, King's gone, he's left the firm. Here's where it gets great. Will Krasne (18:52) Great. my god, this is so good. There's like a whole thing about when you leave what you do. People will put stuff in a Gmail draft because it doesn't download. Yeah. There's stories and there's a lot of them where people will check your download activity. So our friend Dave King downloaded quite a bit. He exported the entire address book, issuers, controlling class reps, brokers, and customers on October thirteenth. Ten days later. Quote list of securitations in CCRs. That's five days before he asked for his release. Hiten Samtani (19:28) A few days after that, he took a file called Top 20 SS Loans by Fees. A few days after that, he took 400 CM NI watch list reporting, which is the 400 Capital deal pipeline, 400 Capital being one of Greystone's key clients. Will Krasne (19:46) November nineteenth, Greystone C B S B Ps presentation dot new version dot Hiten Samtani (19:50) It's important in the version. And a couple days after that, he took the Greystone Bond Portfolio, which is the entire owned Bond book. So King has ended up now at CW Capital and he comes knocking at his old employer. He recruits a guy called Jason Price, who in turn recruits someone called Mary English, who in turn recruits a guy called Greg Freder King. And these are Greystone alleges three essential pieces of the puzzle. Will Krasne (20:19) Remember, he did not get this non-solicit, so he is just definitely solicited. Hiten Samtani (20:24) So apparently he reached out to the head of Prime Finance's B Piece Division, another key Greystone client. He touted CW's hiring of Freder King, and he said, quote, CW was doing some diabolical stuff on that front. Criminal Will Krasne (20:37) Is you taking notes? Hiten Samtani (20:39) fucking conspiracy. What we love about Ciari, it's a saga of fallible humans. I've made a huge mistake. He ended up sending this email accidentally. To Greg Frederick's work account, which obviously by then had reverted to Greystone HR. So it was right there. Will Krasne (20:58) no. Hiten Samtani (20:59) The allegation is that because of all these machinations, Greystone's special servicing business is worth a lot less than it was before all this. Island Capital C4 apparently said they want a big discount on their transaction. So Greystone's alleging that this really dented the value of this unit. Will Krasne (21:16) This is what it's all about in these businesses. That's why these guys are so valuable because these clients are such a big book of business and it's recurrent. Hiten Samtani (21:23) This rhymes a lot with what we see in traditional investment sales and debt brokerage too. When anytime a real rainmaker leaves, there's always the specter of legal action. Non-competes come up, non-solicits come up. Will Krasne (21:35) And it's also how you get paid on things after you leave too, because everyone's got deals in motion. So how far along are they? Are you owed part of that? So it's it's messy. This is a little bit more than messy. Hiten Samtani (21:45) Right. I mean CW Capital for the record denies the allegations. We'll see where they go. But with so much of the action nowadays happening in the nethers of the cap stack, as we like to say, it makes sense that a lot of the drama is ensconced there too. I'll say. So I'm not the best driver of a motor car, but I'd always been fascinated with this race called the Mongol Rally. The idea is you have to stitch a cart together out of it's crappy parts. And that's really how I think of Newmark Night Frank. It's unlike CBRE, JLL, etc., Newmark is is kind of a modern miracle. It's cobbled together from the ashes of so many different firms, and it's been a history of small MA, little bites here, poaching here. To create what is a real player in the marketplace. Will Krasne (22:47) try not to damn them with paint praise because what they've built is very impressive. But I think you're right, JL, you know, C B R E they've been around for more than a hundred years in some cases, founded by very eminent real estate players. And this has been put together, like you said, by A, they bought Grubinellis. Everyone Hiten Samtani (23:03) Everyone now has N R K, but the ones who've been around for a while still have the N G K F it's pretty cool. Will Krasne (23:08) Yeah, love that. they also bought some roll ups, so ARA, Berkeley Point, and then they have just really been hugely successful poaching some of the absolute biggest rainmakers. Hiten Samtani (23:20) Yeah, in twenty seventeen they kind of went vertical by picking up Doug Harmon and Adam Spees from Cushman and Wakefield. And that really changed the fortunes of their business. They became real players in investment sales. They also short up the debt division, then they really created this capital markets powerhouse with Jordy Roshlob and Nick Scribani and all those guys. It's like a very power packed division inside an absolutely insane company. Will Krasne (23:45) At the head of Newmark though, the guy who's put this all together. It's Bray Ghost. Hiten Samtani (23:48) Barry Gossin and he'd been there for about forty five years and he is now finally on his way out. Will Krasne (23:55) 45 years exiting with this firm being a real player. Has his DNA everywhere. And man, look at what he's accomplished, just what we've listed out. Hiten Samtani (24:05) And Wall Street couldn't give a fuck. Will Krasne (24:08) Yeah, as sometimes like Michael Stern said, qualitatively, I think very big success right now. Quantitatively, stocks been flat essentially since the IPO in December of twenty seventeen. Hiten Samtani (24:18) C B R E is up about two hundred and forty percent since that December seventeenth. J L L's up about one eighty percent and Newmark is at about seven and a half percent. So flat. Will Krasne (24:28) not a public equities guy, but we've talked about it before where at C B R E and JLL, iSales, debt advisory, that stuff gets the Hiten Samtani (24:35) The headlines. Will Krasne (24:36) the headline, the sexy part of it. But it's managed services that really are the show stoppers there. Property management, advisory, that recurring revenue in Newmark doesn't have that though. Hiten Samtani (24:48) If you think of Newmark as a a standard public company, you're gonna miss the point. Newmark since twenty eleven has been owned by our commerce secretary, Howard Lutnick. And man, the Lutniks have really run it in a very unique way. Let's put it that way. Will Krasne (25:04) Because what, its own by Cantor? Hiten Samtani (25:07) It's owned by Cantor and Howard Lutnik, like Zuck, has those super voting shares, the ten to one voting shares. So they effectively control the company. So Gosson or any CEO is really there at the pleasure of the Lutnik. Will Krasne (25:19) Yeah, with the senior Lutnik going to Washington. His son Brandon's run cancer. His other son Kyle recently was set up as the chief strategy officer. Hiten Samtani (25:29) What does a chief strategy officer do? Will Krasne (25:31) To paraphrase Roman Roy, if it's strategy, I chief it. Hiten Samtani (25:35) They're basically setting up the kid to be the leader, but he doesn't really have much of a resume yet. I think he worked for a time as a retail broker at Newmark. He also worked at co-working firm Notel after it was picked up by Cantor. Pretty patchy resume. You can't really put him as the head of a public company. So he's in the C suite hovering, but they need to have a professional CEO come in. And Barry Gossen, speaking to insiders, he lost the support. He had a recurring contract that would just renew. Every year he was making a good amount of money, a 17 and a half million a year by the end of it. He had pretty nice office at 125 Park, but it was not a company that was run by the CEO in the same way that you would think of a CBR or JLL. This was really a collection of athletes is the way they put it internally. And they were doing their own thing. They were always doing their own thing. Will Krasne (26:22) Sometimes the best coaching you can do is roll the ball out and get out of the way. And when you've got the talent that they have here, got you you listed some of the names, Harman, Spees, Rushlaw, Doniger, Scribani, Warren Murderers Row. And not only that though, they are really doing well in the two most important places you can be doing well right now, which is Dead Advisory and Dad Mass. Hiten Samtani (26:43) They've had a really good time on that front. But one of the things I think about a lot is in these public companies, one of the ways you compensate employees is through stock. And if the stock's been flat, you're losing that lever in a sense. Will Krasne (26:55) You really are. Blackstone's longtime president Tony James was talking about this exact thing. How do you compensate people? If you give people too much, they're not gonna work hard. If you don't give them enough, they're not gonna work hard. And if the stock doesn't perform, they're not gonna work hard. So what do you do? And you have to be really thoughtful about it. If your stock is moving up, it just gives you an arrow in the cover. But at the same time, if it goes up too high, then people view it as not enough upside because it's already all baked in, and that makes it harder too. Hiten Samtani (27:21) You think of a star broker who was put in ten years and was expecting to have that basket of shares to be very, very substantial but then it turns out to be kind of a meh component, starts to create a little bit of discontent. Will Krasne (27:35) Yeah, it's more tax efficient too, because these guys are all making ordinary income, which especially if you're in New York, you get annihilated on taxes. And it's not like the company hasn't performed. Sometimes you need to change the scenery. What Hiten Samtani (27:45) What is a new CEO coming into? You're coming in to lead a company where you have such a clear boss. Will Krasne (27:51) But that's the case in a lot of places. Like Meredith Coppet Levine at the New York Times, you know, works for the Salzburgers, but it can be a great thing because if you get on your side you have tons of protection to do the right thing. So it just means you gotta be a pretty good politician to start and get buy in and have a real plan. Hiten Samtani (28:07) And you've also got to get buy-in from this talent that's been running around one high level new marker described it to as we can at Bernie's in there. Very, very good work. How would you two like you've gotta corral people, some of these people who are not used to having a boss really, and make them believe in your vision that you can make the stock go up and make them richer than they are. Will Krasne (28:30) Hard is what makes it great. If it were easy, anyone would do it. Hiten Samtani (28:33) You get a sense of the dynamics from this pretty explosive lawsuit out of Boston where two top capital markets guys, Matt Pullen and Woody Mare Jr., filed suit against Newmark and their boss, the co head of capital markets, Rob Griffin. So one of the top guys in Newmark. And they basically said that Newmark made it impossible for them to earn a living because of this guy. I like that they changed their LinkedIn titles to former in all caps executive vice chairman and former vice chairman. Will Krasne (29:02) So this has been simmering for a while. Maher said in the filing that there'd been issues between him, Poland, and Griffin since 2022. He'd actually gone to the mothership citing concerns over the direction and management of the Boston team under Griffin. The result of that meeting was updated employment agreements, promotions for those guys. Hiten Samtani (29:21) In a normal institutional brokerage, there would probably be a process to deal with these kind of grievances. But a new mark is the epitome of eat what you kill. And so the the conflict resolution can be a little bit messier. There's definitely some power struggles in there. The dynamics a little bit hot and heavy. Will Krasne (29:38) In the filing, Marr points to the sale of a tower in Boston and says, This is why this didn't work. He alleges that Griffin cut him out of these deals. And he said that he and Putin should have been part of the deal team because he'd sold the tower three times previously, including to the person who currently owned it. It's illustrative of the challenges that any new CEO is gonna have to face, where you've got really talented people all over the place and they've been used to doing things a certain way. Hiten Samtani (30:05) Let's bring into the world of soccer for a second. Do you think they bring in a Mourinho type who is like this is my way or the highway, or they bring in a Carlo Ancelotti type who is an incredible man manager who knows how to work with top talent that has an inflated sense of ego? Will Krasne (30:25) I think you gotta go to the ladder because this is a controlled company and there's one boss ultimately. It's the Letnix. You need someone who can be their representative. You don't need someone who's trying to put their own name on the door. Hiten Samtani (30:45) That's it for the promote pod this week. Can Canadian Kindling ignite an American multifamily empire? Will Greystone prevail in its trade secrets war with CW Capital? And with Barry Gosson out at Newmark, how much juice could a new CEO have? Will Krasne (30:58) A big shout out again to our sponsors, Bravo Capital, a leading HUD and bridge lender that lives and breathes cap stacks, there at BravoCapital.com. Hiten Samtani (31:06) And Loneboss, the best in class CRE debt management software, you can find them at loneboss.com. Some navel gazing on the Reifens? How did you feel? Will Krasne (31:15) It really expanded because initially we were gonna do one, then we're gonna do two, and then it turned out to be a trilogy. Moving forward, that might be a separate podcast. Hiten Samtani (31:23) The reaction has been so tremendous and we had such a great time doing it that I think that we might do a little spin-off. I don't know what we're gonna call it yet. These deep dives into the most important companies and people in the business could be its own thing, so Will Krasne (31:36) The real estateables. Hiten Samtani (31:38) god. We were overwhelmed by the amount of feedback and outreach we got on this trilogy. Most of it was very, very positive, but we got a couple of corrections. In the first episode, we said that Ralph Reichmann is still with us. He is no longer with us. He passed, I believe, in late 2024. And second, this is a incredible one, that fateful bar mitzvah in Ballet. We described it as a grand synagogue in Vienna. And we had someone who actually has ties to that spot reach out and say it would have been a very humble school in Vienna, not quote a grand synagogue, because the Reichmans were so conservative and so orthodox. Even the corrections just tell you how passionate this audience is outstanding. Will Krasne (32:20) Great work. Like some corrections you're like, yeah, like that one perfect. Please write us, review us, Apple, Spotify, wherever you get your podcasts, really helps the podcast grow. Hiten Samtani (32:33) Most importantly it makes us feel warm and fuzzy inside. Will Krasne (32:36) Shout out with nominations to podcast at the promote dot com with who you think we should do next for our deep dives. We'll Hiten Samtani (32:42) Just don't say Tramel Crow. Will Krasne (32:44) save that one. Hiten Samtani (32:45) I'll see you next week, man. Thank you. Will Krasne (32:47) Thank you. Hiten Samtani (32:47) Ciao.