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Lender Exuberance in Miami Beach & Private CRE's Funding Fever

Rent-to-own giant sold for scrap, sponsors chase $5B+ hauls, plus: CREFC dispatch

Author

Hiten Samtani
January 13, 2025

CREFC Night 1 Dispatch: Exuberance in Miami Beach

L: Scenes from Tyko’s lavish bash at the Setai R: A group of eager blazers takes over Collins Ave

I suspected the vibes would be right at CREFC this year based on tales of lenders promising a full return to form in the last few editions of CMA, plus our coverage of the new wave of alt lenders w/ cavernous pockets. That suspicion was furthered on the flight to Miami, when I saw a dealmaker from Marathon crush his party RSVPs - within a span of 20m he had ripped through a dozen invites w/ a practiced hand. Sunday night in Miami Beach was a flurry of cocktail receptions – Paul Hastings, CW Capital, Atlas, GS – but the place to be was the Setai, where Tyko Capital, a debt fund backed by Elliott Management and run by Adi Chugh, did its welcome shindig: Tyko has catapulted ($2B+ in deals in H2 ‘24) into the ranks of the town’s most talked-about construction lenders, and the crowd in the cavernous room was a reflection of that perch.

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CREFC (Cont.)

Spotted: Marty Burger (ex-Silverstein boss, now solo GP), Louis Birdman (One Thousand), Mukang Cho (Morning Calm, partnering w/ Elliott on its 701 Brickell office megadeal ), Daryl Shevin (13th Floor), Erik Rutter & David Weitz (of the in-the-spotlight Oak Row Equities) Dev Motwani (Merrimac), Simon Ziff (Ackman-Ziff), Jon Mechanic (Fried Frank), Aaron Appel (Walker & Dunlop), & as-of-now free agent Dustin Stolly. Between bites of Hyderabadi lamb chops 🥩 & nigiri 🍣 , the convo was upbeat & action-focused: big financings, acquisitions, upzonings. I caught a v sweet exchange: A sponsor, beaming w/ pride, speaking of 2 of his analysts that had managed to recreate an Argus model, a feat of Excel wonkery that helped their backer’s credit committee make sense of a deal. ⌨️ 

Rent-to-own giant sold for scrap to Brookfield

A division of Brookfield has bought the carcass of rent-to-own startup Divvy Homes

This one had been on our proptech graveyard/infirmary list 🪦 for a while: Divvy Homes, a rent-to-own startup that raised over $400M in VC (a16z, Lennar, Caffeinated Capital, Max Levchin, Tiger Global), is being sold for parts to Brookfield-affiliate Maymont Homes, per Fast Company. The Adena Hefets-led startup, which also raised $1B in debt, hit its peak valuation of $2B during the ZIRP mania of ‘21. Since then, it’s been a sadly all-too-familiar storyline: discombobulated by interest-rate hikes, multiple rounds of layoffs, massive losses, accusations of neglect & predatory practices. It’s unclear how many homes Maymont, which is Brookfield’s SFR arm, is picking up in the fire sale.

Also see: EasyKnock: Sale, Leaseback, Shutter 

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Private CRE Expects Funding Frenzy in ‘25

Only 1 ‘24 fund raised $5B+ last year, but 9/10 of the biggest are eyeing that figure this year

Fascinating private RE fundraising data c/o PERE: Last year saw institutional funds raise a total of $131B, a 30.8% YoY drop from $191B in ‘23 and just half of the $266B raised in the record-breaking ‘21. Multifamily & resi accounted for the biggest chunk (45%) of that cash, followed by industrial (28%) & hospitality (12%), w/ office accounting for just 5% of the haul. Only one fund, managed by Blue Owl, pulled in $5B+ last year, w/ Madison Realty Capital’s $2B haul for its debt fund rounding out the top 10. Despite that, current targets are far loftier: 9/10 biggest funds in market are looking to raise $5B+, w/ Brookfield’s $15B target the most ambitious. Check out the full report here.

Empire Hotel Lands Refi

Quick nugget on a deal that closed Friday: Joe Chetrit & the Podolsky brothers have landed a refi on the 427- 🗝️ Empire Hotel on the UWS. Benefit St./ Franklin Templeton provided $135M in new debt (brokered by Galaxy Capital) & the sponsors paid down $45M on the original $180M loan. Chetrit & the Podolskys had negotiated a short-term extension on the debt back in ‘22.     

Quickies

Unquotable Quotes

“How do you sum up losing over $20 million in 24 hours to any human being?” 🔥 
- Developer Robert Rivani, on having to eat losses at his Malibu spec mansion project after the wildfires