Nir and Loathing, Skyscraper Queen Exits, Flow/WeWork 🤗 & Miami Record Loan

Nir and Loathing in South Beach

It has, extraordinarily, come to this: former HFZ principal Nir Meir, who just five years ago was one of Manhattan’s alpha condo developers, has been arrested in South Beach and is reportedly being extradited to New York on charges of grand larceny and tax fraud. The details of Meir’s ascendance and collapse feel like something out of fantasy. Consider, in no particular order, the elements and allegations: wooing an Israeli diamond 💎 billionaire into the capital stack, corralling EB-5 🟩 funds, faking wire transfer codes, hiring people to fake Korean accents, doctoring loan docs, blood 🩸 feuding with his former partner and mentor, hosting private omakase 🍣 dinners at his (or not his) $43M beachfront Hampton mansion, shoring up on investment-grade wine 🍷 and gold bullion, threatening his father-in-law, hopscotching money between accounts to avoid creditors, camping out in a $150K-a-month Miami Beach rental (after losing the Hamptons crib), and finally, claiming he’s got just $50 to his name.

On a good day, Meir was a generationally talented fundraiser: a hyperkinetic, darkly intense man capable of simultaneously schmoozing lenders, international investors, EB-5 middlemen and partners on multiple deals in multiple projects, telling everyone exactly what they needed to hear in that moment. Think of Adam Sandler’s Howie in “Uncut Gems,” crank up the sketch, and you get close to the feeling. 

When capital was flowing into New York condos from all corners of the world, Meir was the master at making sure HFZ got big chunks of it. At its height, the firm, founded by Ziel Feldman, oversaw a $10B portfolio with projects such as the condo conversion of the Belnord and the High Line’s twisty XI (The sales launch for that Bjarke Ingels-designed project remains the most extravagant non-Miami real estate shindig I’ve ever been to - they had an immersive walk-in installation and Macallan 25 🥃 on tap. The project has been since reborn as Witkoff/Blavatnik’s One High Line.)

That was then. “This,” as Liotta says in Goodfellas “is the bad time.”  It is so vast a 🕸️ of decadence and deceit that it would be futile to try and distill it here – go read TRD’s epic ‘20 deep dive at the beginning of the end and NYMag’s opus at the middle of the end to get a taste.

Where we stand now is that Meir, arrested at the 1 Hotel South Beach in Miami Monday, is to be shipped to 🗽 to face the music, part of a choir of co-conspirators: construction firm Omnibuild (HFZ’s GC at the XI) and one of its principals are also expected to be charged, per the Times.  

“With Nir at the helm, we were doomed from the beginning,” Feldman told NYMag in ‘22, a few months after suing Meir for nearly $700M. “I’m not aware of any other developer who relied so heavily on a person who turned out to be a very talented sociopath.”

A sociopath, a mega-scam, tales of excess and debauchery and family feuds, set against the backdrop of the world’s most famous skyline… Anyone got a line to Marty and Leo?

Teamwork Makes the WeWork

On a spectrum of chutzpah, at the very extreme, far beyond e/acc dreamers and billionaire industrialists and even Hyman Roth, you’ll find Adam Neumann.

With the backing of billionaire hedgie Dan Loeb, the WeWork founder, former CEO and wave pool mascot is making a play to take his country company back, Dealbook reports. Neumann’s new venture Flow is angling to buy the bankrupt co-working firm or its assets, as well as provide money to keep it afloat. According to Flow’s lawyers, though, WeWork has been stonewalling its former frontman. 

WeWork filed for bankruptcy in November, and back then Neumann said that “with the right strategy and team,” it could be made great again. In a just-filed restructuring plan, WeWork disclosed it has over $4B in secured debt (and that Masa Son’s SoftBank is owed a LOT of money). Its demise has left landlords (who made Neumann their pinup boy in the glory days) all over the country in the lurch, with fears that the firm won’t be able to pay the rent. Dealbook’s sources suggested that WeWork’s going rate could be well under its O/S debt, even as little as $500M.

A good reminder that Flow, which raised $350M from a16z, already has its own issues. The apartment startup is crowdfunding to address a “cash flow deficit” at two Nashville properties.   

(PS: If you want to dive deeper into Neumann’s spectacular WeWork journey, I recommend “The Cult of We” by Maureen Farrell and Eliot Brown. And if books aren’t your thing, read my highlight reel of it here.)

NYCB Freefall Continues

The bleeding continues at key multifamily lender New York Community Bank, whose shares are now down 64% so far (as of Wed) this year. Shareholders sued on Tuesday, alleging that the bank presented an "unrealistically positive assessment of the Company and its financial well-being and prospects." Late Tuesday, Moody’s cut its ratings to “junk.” The bank is also looking for rescue capital to finance a resi mortgage portfolio held under its Flagstar unit, per Bloomberg. Investors are placing the 🏦 smack at the center of the CRE crisis. Its exposure to New York’s embattled rent-regulated market isn’t helping matters.

Queen Without a Queendom

“Never had the makings of a varsity athlete.” - Junior Soprano

Darcy Stacom has left CBRE. Going through her deals is like getting a crash course in the modern history of the New York skyline: You get a sense of who’s in the mix, where the money’s coming from, and what pricing for the country’s alpha (until recently) real estate asset - a Manhattan skyscraper – looked like.

There’s the sale of the International Toy Center buildings for the Malkin family, the largest single-tower transaction of the time in the GM Building for Harry Macklowe; the record-breaking $5.4B (immediately disastrous) purchase of Stuy Town by Tishman Speyer (record was later bested at the same property); the record office condo sale of 30 Rock; the sale of 11 Madison for the Sapirs, the record psf pricing for the Park Lane development site, the $1K+ psf for the dirt at the XI, and on and on it goes. It has been a HoF career.

The key word here, though, may be “has.” Stacom is said to no longer be the force she once was in the market, with a pronounced drop in big-ticket activity. There’s been chatter that CBRE did not renew her contract when it came up last year, and a damaging report of bad behavior with staff. The departure email from CB’s top NY and I-sales brass seemed perfunctory – it actually contained the dreaded “wish her well with her new endeavor” 💀. Her longtime partner, Bill Shanahan, is staying and taking on a bigger role in workouts/special sits, while Eastdil alum Doug Middleton is running the I-sales show. Meanwhile, Stacom is starting her own boutique firm, telling the FT she’s going to work on the full spectrum of deals, from sales to restructurings and ground leases. She acknowledged she’s bowing out of the race for sales broker supremacy, in which she and Shanahan jousted for the top spot against Newmark’s Doug Harmon & Adam Spies (Batman & Batman) for so many years.

“For years I did that dance,” she said. “And I did it well.”

The internal dynamics at brokerage firms have been all over the place in the last three years, with myriad poachings and upheavals. Still, if I worked somewhere for 2+ decades, was the company's biggest cash 🐄 for half that time, set generational records, and was hit with a "wish you well in your endeavors" when I departed, I might throw something. Perhaps a stapler.

Mucho Plata for Miami Tower

Mast Capital scored a $600M construction loan for the Cipriani Residences condo in Brickell, said to be the largest ground-up financing of its kind in the region. 🇲🇽 Banco Inbursa kicked in $350M, while the rest came from Ascendant Capital Partners, an L.A.-based shop led by Dune alum Russell Gimelstob. Helps that the tower is 50% sold, and the brand affiliation with Cipriani can’t hurt, either - there’s been a lot of capital available for branded-tower projects, even in B/C markets- Madison did a $300M+ loan for the Four Seasons residences in NOLA 🎺 in ‘22. Per TRD, > 2 dozen branded condos are in the works in South Florida (Casa Tua, Bentley, Baccarat, Ritz-Carlton etc.)

Dirty Deeds 📄 

There’s something rotten in Midwood: Two major title cos., Riverside Abstract and Madison Title, are in the penalty box with some sellers and servicers, according to a memo from law firm Troutman Pepper that’s been doing the rounds. This comes weeks after the two popped up in a DoJ announcement 👩‍⚖️ of a guilty plea by real estate investor Boruch Drillman, who conspired to commit mortgage fraud involving closings at inflated prices. Riverside and Madison performed four of the closings mentioned in the investigation. I’m hearing that this is a BFD, though it’s still fuzzy how Fannie/Freddie are taking this. (Hit me up @hitsamty if you hear more- DMs open)

Unquotable Quotes 

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