Deal of the Era

I was reading about JMB Realty and how they had the defining/biggest deal of the 1980's real estate boom (Cadillac Fairview for $2.6 billion). It got me thinking, what has been the biggest or lost defining deal (or development) of this real estate cycle?

The book mentioned how deals in the 90's were less flashy because the degree to which leverage could be used was constrained because of bank losses from the previous decade. Do you feel this is the case in this cycle as well? Do you think that there has not really been a defining deal because of this?

 

Stuy town was huge. It was brokered by Darcy Stacom of CBRE. The book "Other People's Money" by Charles Bagali is a great read. Not sure if you'd include it in the last cycle or this one though..

Edit: should've scrolled down to Ozymandia 's comment before posting lol

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 
thhddd:
The most famous one of all time has to be stuyvesant town

I wouldn't say that is this era, though, and it certainly isn't the most famous deal of all time. If anything can be described as a clear demarcation point, it's the Great Recession. The way in which the landscape changed between 2007 and 2009 is enormous.

I think in NYC and maybe to a certain extent across the US, some of the Billionaire's Row towers might be good examples. Its tough to have one deal be emblematic of all markets and all asset classes, but one of the major trends from 2010-2017 was a ton of foreign money driving the pricing for ultra high end luxury condos through the roof.

 

They purchased 75% of the building in 2003 and the remaining 25% in 2011. The deal is still a home run anyway you slice, especially with well-timed financings, but if only that hold period would be

Robert Clayton Dean: What is happening? Brill: I blew up the building. Robert Clayton Dean: Why? Brill: Because you made a phone call.
 

Pretty much all of my family works outside of the high finance/commercial real estate sector, and the only deal mentioned here that I've heard any of them know about is Hudson Yards. It has people talking all across the East Coast.

 

That's where Barry Sternlicht got his start. They were the place to be in the 80's.

Agree with blank112 that Hilton has turned out to be a massive success. The BX/EOP deal was pretty solid as well.

Stuyvesant was massive but right after that Starwood bought a $5.3b multifamily portfolio as well so it wasn't completely out there by itself.

Biggest loser of this cycle was probably HNA Group.

In life, you sometimes do what you have to in order to do what you want.
 

I'd agree that Hudson Yards is probably the most iconic of this era. I'm a West Coast guy and I still think that's the case. There are probably 3-4 more that would be equally as important but that were lower profile since they were more M&A/portfolio deals. The KTR acquisition by Prologis comes to mind, that was massive. It wasn't as 'sexy' since it was industrial, but very big.

The stuy town deal was a single asset technically, which is the reason it's impressive. There are a lot of assemblages/portfolios that eclipse it $ wise, but more than one asset or entity level.

"Who am I? I'm the guy that does his job. You must be the other guy."
 

I'll go with the deal that Barry Sternlicht, Jon Gray, Tom Barrack, and Wayne Hughes each poured billions into: the institutionalization of US single family housing. The final chapter hasn't been written on this trade/business, but I expect that 20 years from now, this is what people will be talking about when they discuss RE investment in the post-crisis era.

 

In total institutional owners owned about 1% of all single family rentals, and 0.2% of all single family homes. Initially, these guys were trying to flip homes for quick profit but got stuck and forced to transition their business model to hold-and-rent.

Inventory for SFR owners dried up long time ago and they basically stopped buying after 2012-2013. Another bad news came last year when FHFA told Fannie and Freddie not to lend any more money to SFR portfolios. Fannie did one deal with invitation homes and Freddie recently did one deal with front yard.

Good news is if another recession comes, taxpayers are not on the hook to bail out these SFR owners because Fannie/Freddie only have less than $2B of SFR portfolios

 

Omnis voluptatem nostrum rem sequi aperiam ut placeat. Aut asperiores voluptas quis ipsa laboriosam est ducimus est. Et similique nihil enim in ullam error. Ut est a quidem et. Aspernatur quae totam quia excepturi.

A est aut occaecati consequatur enim veritatis. Dolore possimus ratione quo est porro et et. Sunt vel minus et esse. Ea minus dolores non nulla.

Excepturi aut enim aut cumque qui nulla laudantium. Quisquam neque quam vitae laboriosam asperiores dolorem et. Laudantium aut sed non ipsa et. Voluptatem praesentium molestias illum aut itaque suscipit labore. Dolore qui culpa alias laborum.

Modi assumenda odit id aut veritatis deserunt nihil. Rerum quo quasi magnam.

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 

Voluptate et sed aut labore. Pariatur amet eum quia alias quia. Quisquam autem officiis reiciendis vel odio aliquid suscipit. Quasi aperiam nesciunt fugiat beatae.

Est consequuntur amet atque quibusdam. Quasi inventore voluptatibus laboriosam hic nemo in quis modi. Voluptate eaque et et veniam quas impedit corrupti. Optio recusandae est doloribus maiores nobis.

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (87) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Secyh62's picture
Secyh62
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
GameTheory's picture
GameTheory
98.9
6
dosk17's picture
dosk17
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
Kenny_Powers_CFA's picture
Kenny_Powers_CFA
98.8
10
numi's picture
numi
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”