BH3 Strikes in Brooklyn & Eastdil Marches to Top

Eastdil Marches to Top of Office Heap

Keeping score is elemental to brokers. Success is nice, but being better than your rivals is what gets the juices flowing. Industry rankings are hotly contested, w/ dealmakers clamoring for credit on their (and others’) transactions, and, if they land in a hoped-for spot, making sure everyone – clients, friends, competitors – is immediately aware of the new pecking order 🐦️ 

In the institutional world, the ranking that carries the most weight is Green Street’s annual tally of the firms that brokered the highest volume of significant (i.e. $25M+) office deals. And in the iteration that just dropped, Eastdil came out on top 🌋 

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Broker Rankings (Cont.)

The brokerage did $8.1B (up 48% YoY) in office deals in ‘24, per REA, a second-half surge that propelled it just past halfway point leader Newmark, which ended the year at $7.6B (up 46% YoY). JLL came in third w/ $5.6B (up 49% YoY) in deals, and CBRE missed out on a podium w/ $3.9B (up 6% YoY). Cushman, accused of prioritizing balance-sheet babysitting 🍼 over dealmaking in recent quarters, came 5th w/ $2.3B – it was the only firm among the Big 5 that saw a drop in its office business, doing 1/3 lower volume than it did in ‘23. Note that this slice of the market is rare air: None of the other 17 firms on the ranking cracked $1B, and even if you combine their activity it falls far short of Cushman’s.

Overall, Green Street’s data show a thawing 🍧 in office dealmaking, whether the sellers were happy participants or forced to the table by lenders or partners. Just over $40B of office (again, this only tracks $25M+ deals) traded in the year, up from $31B in ‘23, but hella off from bumper years such as ‘15 ($113B) and ‘21 ($107B). Buyers determined “there’s more to go right than wrong,” is how Eastdil’s Will Silverman put it, and “grew conviction in buying on basis, even if the underwriting wasn’t there yet.” Newmark’s Doug Harmon framed it thus: “The fear is out of the system.” 👻 

Baggage Handlers Strike in Brooklyn

We have liftoff at 141 Willoughby, a Downtown Brooklyn spec office tower that Savanna (Chris Schlank, Nick Bienstock) developed w/ $ from AIG/PIMCO (sr.) & AB Carval (mezz). Savanna defaulted on the senior debt this spring, and the lender began shopping the note (via Eastdil). Savanna then put its own hand up to buy it – at a handsome discount of course. Its partner on the caper was Joshua Zamir’s Capstone, as we first reported just before TG 🦃 . Now, Capstone has found the funds to pull this thing off: the bulk of the equity on the deal, insiders confirmed to The Promote, is BH3 Management, a debt & equity investor run by Daniel Lebensohn & Greg Freedman. In the deal that’s in the works, Savanna does not appear to be part of the buyer entity; it’s possible, however, that they’re still in the mix via some side 🚪 which we’ll only understand after closing.

The note is trading for $105-$110M, per insiders, putting the buyer’s basis at ≈ $270/foot. The plan as it stands is to convert the 400K sf joint into 174 resi units, though I’d imagine ownership wouldn’t turn away a girthy office tenant. In investor docs seen by The Promote in Nov., Capstone was pegging the post-conversion basis of the deal at $341/foot.

BH3 has been rather prolific in South Florida recently, partnering w/ local developers Motwani bros on an 11-acre site on Miami’s Watson Island. It’s previously backed high-profile projects such as Michael Shvo’s Raleigh Miami Beach & once owned the note on the now-resurrected Lower Manhattan supertall at 125 Greenwich St.

The firm got its start in ‘09 buying NPLs from banks. An early deal of significance was w/ MSD Capital in Miami Beach: irate at the supposedly one-sided structure MSD was proposing, Lebensohn, who was listening in remotely while Freedman was in the room w/ MSD, ICQ’d his partner. “What the fuck do these guys think we are, baggage handlers?” he wrote, a line Pacinoheads will know is a nod to Tony Montana’s riposte in Scarface. The MSD guys saw the words on Freedman’s screen, but it all worked out in the end. BH3, per TRD, is short for “baggage handlers times three.” 🧳 🧳 🧳 

Silber’s Skyfall

We knew that Moshe Silber was a man of means. He controlled a sprawling national multifamily portfolio, an 11K-unit chunk of which bondholders took back in the summer and reassigned to Lynd Group, as The Promote reported in Sept. That portfolio, Lynd CEO A. David Lynd said, was valued at $800M - even if that number has some exuberance baked in, it’s a stunning sum for a guy who managed to operate in near-total obscurity for so many years. Now, Silber is at the heart of the mortgage-fraud scandal that has rocked the multi business (catch up w/ our Special Ed. here) and was set to face the sentencing music this month until his hearing got kicked back to 2/6.

A pushback is routine, but the circumstances around this one were not: Silber’s attorney Eric Kanefsky alleged, per TRD’s review of the transcript, that federal prosecutors – in particular assistant U.S. Attorney Martha Kathleen Nye – made “continued misrepresentations and outright lies to (the) defense counsel.” Nye said in court that the allegations “are personal in nature that affect me as an attorney, that affect my career, really.” Even Robert Kirsch, the lyrical gangsta judge overseeing proceedings, was taken aback. “These are very serious allegations, Mr. Kanefsky,” he said. “I’ve never leveled them as a lawyer, and I’ve never been the recipient of them.”

TRD also dug up a statement of Silber’s finances (circa ‘22) from an old case that details just how substantial those means were: A $1.3B CRE portfolio w/ a $621M equity stake, a sprawling home in Suffern, and a $61M private jet 🛩️. Thanks to a May suit filed by KeyBank, which financed a Silber jet purchase and sued him to repossess it after he defaulted, The Promote got some more deets on his former air whip: It’s a Gulfstream G550, w/ Rolls-Royce engines.

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