Tides Equities?

Just curious if anyone knows much about how these guys.  Guessing that they originally met through the Benedict Canyon/TruAmerica prior jobs (same office, same principal).  


Given the volume they are doing (I have heard a few brokers that have sold them deals refer to them as "ultra aggressive"), I am just curious if they have some secret HNW investor backing them, or some other creative way of acquiring north of $2B in asset value the past 5 years.  


 

Commenting because I'm interested as well.

I'm pretty sure they had a few Co-GP partners to get off the ground and help qualify for financing and raise capital, but I imagine the two principals are now able to carry that torch (both experience-wise & financially) on their own. 

Regarding the comments from brokers - not at all surprised to hear that folks who bought a swath of multi in Phoenix over the last 3 years have hot hands and are remaining aggressive. The debt fund/bridge lending market is insane right now - you can get 70-80% LTC financing at 315-325 over. That strategy depends on interest rates remaining low for their buyer's takeout, so it isn't without risk, but they seem to know how to get in & out of properties pretty damn quickly.  It will be interesting to see if they have longevity, or are simply a product of this never-ending "9th inning" business cycle we're in. 

 
Jmrunk

Commenting because I'm interested as well.

I'm pretty sure they had a few Co-GP partners to get off the ground and help qualify for financing and raise capital, but I imagine the two principals are now able to carry that torch (both experience-wise & financially) on their own. 

Regarding the comments from brokers - not at all surprised to hear that folks who bought a swath of multi in Phoenix over the last 3 years have hot hands and are remaining aggressive. The debt fund/bridge lending market is insane right now - you can get 70-80% LTC financing at 315-325 over. That strategy depends on interest rates remaining low for their buyer's takeout, so it isn't without risk, but they seem to know how to get in & out of properties pretty damn quickly.  It will be interesting to see if they have longevity, or are simply a product of this never-ending "9th inning" business cycle we're in. 

I am in this shit-mix currently and everything you said is spot on

 

Shit-mix being the bridge debt side or this sponsor in particular? I can't imagine what the guts of their operation look like, but their AM's must be worked to the bone.

A quick google search shows me that The Robinson Group manages a lot of their AZ properties. I've never heard of "The Robinson Group", but their website's "Team" page almost looks fake. 

https://robinsongroupre.com/team

 

Any specifics? Because based on just our pipeline (bridge lender), they are looking at a recap and bringing in CIM for a $100MM deal in Phoenix, a $100MM acquisition in NV, a $50MM acquisition in TX. LP's including institutional ones after doing their due diligence appear to be on onboard. And note we are just one lender and may not see every deal of theirs, so they appear to be not just be busy but also actually executing on deals. 

 

Maybe I am being a bit naive or ignorant, but both of the principals were probably late 20s/early 30s prior to them jumping ship from TruAmerica & Benedict Canyon (where they were likely being overworked and abused like most Acquisition Director-types at firms such as those types of shops).

Granted, I am showing that when they started buying under the Tides banner in 2017, their first 5-10 purchases were all Phoenix sub $10M, but then they almost overnight starting closing on $25MM+ transactions.  

Do either or both of these guys come from money?  Have an in with some uber high net worth LA guy who likes throwing money at real estate?  

Similarly, a couple of ex Benedict Canyon acq guys (operating under the APRA Capital) jumped ship and saw that they just closed on a $55M deal in Tucson AZ.  Again, WTF?!?  Is it as simple as pitching the shit out of any capital source until you find someone with enough liquidity and net worth to be a sugar daddy for a few deals and then just scale from there?

 

It was an aunt. I've met with them for potential JVs, but they overpay for everything.

 

Believe they also have a lot of junior underwriting staff incl offshore that helps them understand the market quicker and better than your typical value add shop with one or two analysts who handle all the grunt work. I can see if you're a broker with a seller who wants a pretty penny you go them them first and get an offer within 24 hours.

I also know they put up huge nonrefundable deposits on day one

 

Know some guys here. They run a cookie cutter (boring) model for every single deal they do that has worked relatively well. Not sure how they will fair over the coming months/years, but have crushed it with their phoenix holdings. They have rich family, can confirm. 

Also - they really don't get worked to the bone. I think they outsource work quite a bit (which seems to work so far). One of my friends who works there works relatively normal hours.

 

Checked out their case studies below due to this thread and there seem to be insane returns (without construction costs) in a year or two and very active on the sale side. In some cases 20%+ IRR based on simple purchase/sale price timeline without cashflow (if any in some of these cases) and obviously I don't know renovation costs on each.

https://www.tidesequities.com/casestudies

 

Yeah and they are still getting 75% LTC non recourse debt. Institutional groups like CIM and Investcorp will be 95 or 97% of the equity on some of their deals but apparently according to the outsiders looking in, they are going to implode lol. Sure, Investorcorp, CIM and literally every bank is wrong, the smart ones here have it all figured out..... Especially during this time, the investment committees are putting everyone through the wringer and killing deals left and right. The fact that LP's and banks have signed off their deals must count for something. Dont get me wrong, deals can still go south (as it did for even some of the biggest names in the business in 09, that is par for the course) but given how deals are structured, it wont be Tides that is getting burnt lol there is a bigger fish to fry. 

 

The banks are fine.  People seem to equate rising rates to automatic deal implosions, this is only the case if these sponsors get caught in refinance squeezes.  I would imagine that most of them have been taking 10 year paper for the last 5 years so they should be able to ride the storm out even if it means their equity investors have to stay in longer than they were promised.  Paper losses in real estate are different than they are in the stock market.  Real estate generates income. 

 

Can confirm they have been taking expensive, short-term bridge debt.

 

i'd be curious to see the breakdown of debt maturities as my guess would have been 5-7 year maturities.

I disagree on the only problem being refinance squeezes. If you bought at a 3 cap and interest rates are now 5, you better have executed on that business plan because otherwise you're in the red and probably broke a few debt covenants along the way.

 

Most of their projects bank on appreciation more than cash flow, so with rates raising the way they have, they are having problems covering debt service. At least that's what i've heard.

 

Can confirm with some of these folks. They were extremely risk-on past two years. They bought total ~$2B worth of assets… from my understanding, they were the largest buyer in Texas from 2019-2022. 95% of their SREO is with bridge lenders. They are insanely over-levered.

If no one can come to rescue, I’d imagine they will be fucked…

Maybe it’s time for those seasoned blue-blazer sponsors to eat them up within a year or two… As majority of their bridge loans are set to mature….

 

Here's to 2023, the year Tides loans start to mature.

Word around town is they have a personally secured line of rescue capital to help them with debt service while trying to sell off deals everywhere. Northmarq alone has 1,000+ units in Phoenix and Texas trying to sell for Tides.

They are facing a wave of maturities, record supply deliveries, massive vacancies, falling rents, rising debt service, and a seemingly ignorant staff, yet they're maintaining this social media presence as if they are on top of the world. As soon as they lose one of the properties, the whole charade will be over.

 

So much of what happened with these people is just this:

biggest number

 

I have heard they are in deep water as well with the way rates have gone.. but crazy enough, it looks like they are hiring for multiple positions? Not sure what's going on there...

 

As I said above they are listing a bunch of deals at the end of the year in this market... Only a truly desperate seller does that. I bet someone big is definitely not happy and forcing their hand to sell now. Or maybe on the debt side, they are starting to break a bunch of covenants (though I doubt anyone at tides would be able to preemptively figure that out, the lenders probably just holding everything back). 

2023 is going to be a challenging year for them, but a great year for all their "friendly" brokers who will start selling their notes.

There is an article out saying they have $7.5B of assets - sounds like the next FTX.

 

I've kept quiet on this for a few years, but I'm increasingly confused by their decision making.  They closed on a portfolio of Class C assets in Dallas over the last 30 days as well as well above market prices.  No idea what their capital stack looks like on those deals or what capital partners are being told or thinking in those partnerships.  Would be very interesting to get an inside look.

 

https://www.entrepreneur.com/business-news/how-a-31-year-old-built-a-75…

This article in a non-real estate publication makes it sound like Tides invented multifamily value-add investing. As someone in the industry, the success of the company appears to be from a combination of luck, market selection, obscene risk appetite, and near perfect timing.

The thing about snowballing your money is that one bad deal wipes you out. I am extremely curious to watch this play out.

No matter how hot someone gets at a craps table, if they keep playing they eventually lose.

 

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I just re-reviewed the massive portfolio that’s been on the market (for a year?) and clearly made its way around too many times. What a joke.

It feels like a lot of people keep asking themselves how are these guys still alive. If you’ve watched any documentary on financial scams/scandals/frauds, then you would see there is always this inflection point where there are a group of people asking how are they doing it, right before sh*t hits the fan. This is where we’re at!

In the next few months their loans will be pulled and sold to distressed investors, then those notes will go into default, then foreclosure, then litigation by the investor, then the fat lady sings. By the fat lady sings I mean a funny article on The Real Deal with a title like “How the Tides went out” and a picture of the principals with a huge foreclosure sign behind them on their portfolio, which oddly just shows pools or crumby wood planked balconies.

There is clearly something questionable going on for them to have grown that quickly with such little experience and man power. Not illegal to grow that fast but definitely short cuts had to be had, and to service it during a recession without those short cuts taking them down is where the line must get crossed. They got lucky, granted, but it’s not sustainable, they’re not too big to fail though they may think so.

The multi housing community should collectively tell them to F off. The brokers made there money on them but now it’s time for them to get out. When you’re a player and someone’s cheating, all you want is them to get kicked off the field.

 

In terms of a massive portfolio being on sale, I'd be keenly interested in seeing that pitch book. A friend of mine knows them somewhat well and he has worked with them a little. Some gossip follows for what it is worth.

They buy crumby C+/B- stuff, maybe some B/B+ too, and put lots of lipstick on it. They have a fondness for wood paneling, and they do nice - but expensive - interior unit work. As far as operational efficiency and ability to hit a capital budget...I have heard mixed things. While their lip service indicates that they view their properties as long term holds, they have apparently traded in and out of stuff very fast without typically fully completing their capital plans. 

In 2020/2021/2022, you could thoughtlessly dump a metric ass-load of cash into any class C or B property in the United States, get NOI up through rent increases, and make yourself look like a hero on the exit. I think that cap rate compression has been their very good friend. I assume that as young guys who believe themselves to be hot shit, they must be very good salesman on the capital trail.

Now that the times have changed, I assume they find themselves having overpaid for a chunk of their recent deals, perhaps in places where the rent roll growth that they hoped for is slowing. They devoured a lot of bridge debt, all of which was issued when their properties' values were peak. Those notes will come due soon and I am not sure whether they have been disciplined or strategic enough to increase their NOI enough to both pencil out to satisfactory long term debt or to actually pay the debt service on such debt if they were to qualify for it.

If you want to buy some perpetual value-add multi that has already had a couple of bites taken out of it, and you have the appetite to continue doing some unit renos knowing exactly what the premiums on Tides' vintage look like, it could be a good buy. It will depend on your horizon, as with anything - and how desperate they are....

 

There is clearly something questionable going on for them to have grown that quickly with such little experience and man power. Not illegal to grow that fast but definitely short cuts had to be had, and to service it during a recession without those short cuts taking them down is where the line must get crossed. They got lucky, granted, but it's not sustainable, they're not too big to fail though they may think so.

I mean, nothing shady.  Debt was dirt cheap and multifamily is a hot sector.  People on here saying things like "you can't deceive the credit committee at a non-recourse lender," which anyone who has ever gone through a credit committee knows is an absolute joke.

I know nothing specific about the firm or their assets, but any group that grows this fast, especially in the markets in which they're active (which are all overheated anyway) is probably just underwriting deals extremely loose and churning for fees.  I say this all the time, but underwriting a deal and buying it is super easy.  It takes almost no intelligence or skill, just confidence and connections with equity partners and lenders.  It's the execution that is tough, and from comments on this thread it sounds like Tides doesn't do much in the way of executing on a business plan. So yeah, I'm sure they made millions of dollars in fees... but there is no back end.  IRRs will always look great if you get lucky with a macro environment and get in and out of a deal in 9 months.

Success in real estate isn't about who does well when times are good, it's about how survives the downturns and comes out the other side with their reputation intact.  We've had a decade+ of boom times in which a ton of crappy operators probably got bailed out because the 10th person came along and said "hey, I'll install new countertops and appliances and bump rents by 25%, too!"  Well, none of those suckers are going to be around in a recession or tight capital market to hold the bag, so we're about to see whose success was "cheap debt" and whose was actual ability to execute.  Somehow, I don't think a ten man shop doing a dozen deals a year is the latter.

 

They are simply liars who will do whatever it takes to close a deal.  Young guys who are going to get CRUSHED under the weight of a bunch of bad deals 

Now they will be personally fine as they did not sign recourse loans but going to be tough reputation wise to come back from this as the losses will be so great

Lying to investors is never a great look

 

The recently published TRD article mentioned they did sign "personal recourse" loans

Together, Kia and Andrade had a combined net worth of $69 million in 2021, according to a DBRS Morningstar report for a loan Tides scored on a property in Irving that the two personally guaranteed. 

 

One of the founders just bought a $15m house.. so must not be too concerned lol

 

How do you know this? Is there an article? I'm super interested.

 

Can’t imagine a lender allowing a borrower to be rate capless, even in the frenzy from last few yrs. 
 

That said, even if they have a rate cap they’re likely to be underwater if a) NOI is getting crushed after underwriting a 9-case and b) expensive debt restructuring costs likely to push them to hand the keys back. 

 

They've got a few more months left on their corporate credit line, when that dries up no more loan payments. Unless the lenders figure out that the capex draws have also been servicing their debt. The word of the day is "misappropriation of funds."

Someone on my team point blank asked a guy on their acq team if they are running a ponzi scheme they said no it's called a recap. lmfao

 

So close yet so far, I can't out myself yet but I can confirm the credit line drying up this is true....

From what I know a few different things are about to happen which are all going to be very interesting. I'll let someone else spill the beans if this info is more public than I am currently aware.

what are some "hypothetical" things that might happen

 

Fall back? Bro that's the main point of this entire scheme lol, especially considering they had very little of their equity at stake in the most recent deals. The promote became gravy at some point in the last two years while the meat was all the fees they were earning. Equity can be wiped out, earned fees can't. Food for thought. When in doubt, zoom out. 

 
brosephstalin

Fall back? Bro that's the main point of this entire scheme lol, especially considering they had very little of their equity at stake in the most recent deals. The promote became gravy at some point in the last two years while the meat was all the fees they were earning. Equity can be wiped out, earned fees can't. Food for thought. When in doubt, zoom out. 

That depends on how the fees get structured.  Are they ploughing those into deals as implied equity?  How much were those fees?  50 bps?  100bps?  We can sit here all day and talk about how "fees are the meat" but some fees are like a ribeye and some are discount ground beef.  They claim to have $8b in AUM... how did they calculate that?  Does that mean they bought 8b of assets, or did they buy $34b of assets and then slap some crazy cap rates on there to get to a fun valuation?  Did they make a point on all that?  Half a point?  These are meaningful questions when you think about their "success".  $20mm in fees versus $80mm is obviously a huge discrepancy.  Do they have recourse on the bridge debt they've taken out?  Because it's easy to say "fees can't be wiped out" but they 100% can if the bank comes knocking and wants assets back that are 90% levered and the founders have guarantee risk.

Generally speaking, I find it hard to believe that these guys managed to buy a "real" $8b of real estate while charging enormous fees and taking no guarantee risk.  That just doesn't pass the sniff test, and while we'll never know the absolute truth (unless one of their investors is lurking around) it just defies all logic that a couple of complete unknowns managed to access billions of dollars of equity within the space of a few years without putting up guarantees and while taking enormous fees.  Their website claims that they've "transacted" on $9b of real estate and 45,000 units.  Maybe someone else here knows better, but does $200,000/unit make sense for Class B/C multifamily that needs real work make sense?  One of the projects mentioned in the Real Deal was bought for 125,000/unit; even if you assume those valuations were a little lower in summer 2022 than would have been the case in 2021, that's still a massive difference.

 
Most Helpful

Ozy why you always gotta get in the weeds...missing the forest for the trees. 

These guys were clearly savvy, knew what they were doing and hustled a ton of big players in the industry. You really think they were dumb enough to roll their fees into the deals cmon. All their debt is non-recourse for a reason. Obviously if bad boys come into play its a different story but I haven't seen any allegations of outright fraud and feel like they were smarter than that but we'll see. BS UW is not illegal. 

I bet when they started out (at a very PERFECT time I might add) they did normal deals, absolutely smashed them outta the park, and used that success to secure big capital partners and tight relationships with brokers. At that time, they cared about returns and promote because that's what they were working for, and they got it. I read as time when on, they very astutely started putting less and less equity into deals - at this point I would imagine their business plan changed closer to the cardone playbook. They created a monster machine, the one guy literally prides himself on it and quotes it - at this point they didn't care about returns. They already made their nut, now they just wanted to create a fee printing press. Acquisition, development, asset management and whatever else they charged. You basically had two guys hoarding mountains of fees - you really think they gave a fuck about returns anymore? Literally everyone says their uw was an overly aggressive shitshow they were just selling the dream and definitely knew it. They took everyone to the cleaners and made a killing and I bet they dgaf if they're done after this they can probably retire. 

Just my 2 cents. Either way grabbing the popcorn to see how this all unfolds this year. 

 
Controversial

you can type super long paragraphs on here if you think this is a good use of your time and talk shit about a company that you only know via he said/she said information or you can actually try to create what they did which is be in the NMHC 2023 Top 50 List. Seriously, what a waste of time if you do not have loan documents, SREO, PFS, actual operations data, etc. So much is wrong on here, for starters- no, not all (a lot but not all ) of their loans are non recourse, there is some recourse with burn off tests on some loans, and it's laughable to think there were no caps or swaps in place lol, like wtf? You think they were getting debt from loan to own lenders or raising equity via realty mogul? Try convincing the investment committee at institutional  LP's like IVC (or institutional banks too for that matter) that interest rate risk management is not needed. In fact it will be shops like IVC running the show and even actually bringing the deal to banks to get financing. I could keep going but you get the point. 

 

Ryan? Sean? Clearly one of you wrote this, so hard to tell now because your emails sound exactly the same. (I’d guess Ryan on a Friday night)

Here’s a few items you should understand, I know you love that beloved NMHC top 50 list, and bring it up in all the calls you have, but that’s a death wish. Look at the guys at the top of the list, now follow a few steps, 1. download that list, 2. subtract their last years total apartments by the current year total apartments, 3. sort by largest to smallest. You see where all those guys from the top went, straight to the bottom, i.e. they were selling all their shit or didn’t buy nearly anything, look who’s at the top (spoiler Tides is top 3). You bought all your shitty assets at the top of the market, so no, not something most of the people want to try and create.

Sure your REO is impressive, when you’re the one valuing the assets, and throwing sub 4 caps on all those assets with fake NOIs, but go try and let an independent 3rd party audit that. That would be a big negative lol.

You think your non-recourse is safe? You have carry guarantees, completions guarantees, bad boy carve outs, etc etc. Those don’t just go away, especially the completions when you’re telling you entire AM team to notify you when you’ve completed 1/5th of your renovations and to call it quits because you will want to use that capex reserve to supplement your cash flow and debt service. Yes, those will trigger bad boys when the lenders find out.

I know you’ve never really been in an investment committee, since you were a low level AM analyst at a bottom tier company, but yes it’s pretty easy to get things through them. Also those rate caps will kill you when you have to buy them again to meet your extension covenants, some of which expire during the initial term, and the spreads alone are eating away at your 60% occupied sub 4 cap deals. Forget the extensions though, nothings getting you to those maturities, unless your pref money just enjoys burning cash.

Best outcome here is that you can end up sharing a cell with Sam Bankman-Fried, he seems like he’s a top though so idk. 

 

lmao, sure bud, I know I wish I had their wealth though! If I am Ryan or Sean, do you genuinely think think this is the best use of my time given as you can imagine what else I would have going on. Look, every SREO will have an implied cap rate that might appear to be low, but do you think institutional banks will just take that SREO and literally make no adjustments to it to calculate net worth, liquidity covenants, etc? Common sense will tell that you think cap rates will be stressed, things like net promote might be excluded, etc. And no response to my comment about IVC (Investcorp if you didnt know) running the show, they will be the ones showing the deals to banks, etc? If you think you are the smartest one in the room and every one else, (forget Tides for a second, they are just as shitty as other put lipstick on a pig middle market value add guys), including institutional LP's like Investcorp, CIM, etc is dumb, then you know what, knock yourself out, you have it all figured out, it is everyone else that is wrong.  And btw, OP's post is from Aug 2021, it is April 2023 now :) one day you will be right!

 

Try convincing the investment committee at institutional  LP's like IVC (or institutional banks too for that matter) that interest rate risk management is not needed. I

Tell me you've never been through an IC process without telling me you've never been through an IC process.  I mean, seriously, your entire post reeks of someone who has no clue what they're talking about.  In a cheap credit environment, there is nothing easier than convincing an investment committee to veer off of best practices.  That is why hugely sophisticated VC firms invested in obviously fraudulent companies like FTX - demanding oversight or diligence means losing a deal.  Same goes for real estate.

For example, "actual operations data".  You bring this up as if no one can understand how well a company manages its assets, but the truth is the opposite.  Most costs can be figured out fairly well, because the biggest line items like insurance, taxes, and utilities tend to be pretty tightly grouped and thus there is a fair bit of transparency there.  Maybe not exact... but if I'm out getting quotes for property and liability insurance at $1,000/unit, I guarantee you that no one is finding someone who is insuring their property for half that.  Sure, electricity usage can vary a bit... but not enough to make a major difference.  And guess what?  These guys are short term holders, they're doing a shit rehab and flipping the property in the hopes of cap rate compression or major rental growth.  Even if they could do all of this insanely cheaply, they're not holding the assets long enough for it to kick in - whoever buys the building(s) is going to sub in their own underwriting assumptions which are probably going to be more in line with the market.

Finally, the true tip off that you don't really know what you're talking about comes from your obsession with the NMHC Top 50 List.  Who cares?  Number of units owned isn't even a good proxy for deal size.  A firm that is buying 10,000 units in southwest Ohio with 80% leverage isn't putting up more equity than someone buying a 750 unit portfolio in Brooklyn for 65% leverage.  Beyond that, what is more impressive, owning 1% of 1,000 units or 10% of 500?  The point being, stop obsessing over the glitz of "xx thousand units" (which is what the Tides people care about, evidently) and start thinking about it in terms of what kind of returns can be earned, and why, and how.  These guys, like many others, seem to be playing a massive game of musical chairs, and churning fees all the while.  And great, for a while they'll make a little bit of money.  But when the music stops, they'll lose all of it, because they're not in these deals with zero risk so even the earned fees end up being at risk.

Also I strongly suspect a lot of these lists are influenced by self-reporting.  I can name at least three companies that should be on the 2021 list and aren't.  Which means there are probably many, many, many more that I have never heard of and which also choose not to be listed.

 
terra879

I think everyone on here is butt hurt that two 30 year old guys built one of the largest multi portfolios in the country in 2 years and they didn't. I'm sure there is plenty behind the curtain that we will find out, but its pretty damn impressive either way. 

Yeah, that's what naive people said to defend Rafael Toledano, too.  "Oh he's young and successful and you're just jealous."

I don't care what they've built.  I care what lasts.  The history of this industry is littered with people who made an impressive-seeming start and then collapsed because it was all bullshit.  Why aren't we as supportive of Grant Cardone, or Nate Paul?  Those guys also make huge claims for themselves which no one seems able to verify but which seem very suspicious.

If it turns out that they're taking small fees and guaranteeing all their loans, then no, it isn't impressive.  Sam Bankman Fried, was also really impressive, until it turned out he was a criminal.  When something seems suspicious, and too good to be true, it's not unreasonable to assume that something is off.  Maybe these guys aren't criminals... but access to cheap credit doesn't make one a genius, either.

 

Bro they didn't sign every loan full recourse....

Who is claiming they did?  Objectively speaking, they're more likely to have guaranteed higher LTV debt or riskier deals.  That's how banks work; when the collateral sucks, they demand guarantees.  So if valuations are well down, it means that they're likely underwater on a couple of their loans.  And this may come as a shock to you, but it takes a lot of fee revenue to make up for even a small number of defaults on guaranteed loans.

To reiterate: when something sounds too good to be true, it probably is.  Maybe these guys are the soul of caution, and are just geniuses at sourcing off market deals.  There is a low, but non-zero, chance that is true.  What is far more likely is that they're way out over their skis, that they've decided to bet it all on black and spin the wheel, that they took a lot of high leverage, risky loans to pay for their rapid expansion and were hoping that the music kept playing so they could keep finding new buyers at ever-increasing prices.  From a gut check perspective, what makes more sense?  That two complete newcomers to the industry unlocked some magical formula for unprecedentedly rapid success?  Or that two complete newcomers to the industry tapped into the same strategy that many before them had done, and offered extremely attractive terms to their equity investors to bring in capital and then went out and over-levered the shit out of their properties while putting in a bare minimal amount of effort into operations in order to deliver on those returns?

I know which option my money is on.  I have no inside information except basic logic and a knowledge of the industry, and neither does anyone else on here, which is why I find it so incredible that the Tides guys have so many full-throated defenders.  If it walks like a duck and quacks like a duck, it's safe to assume it is a duck.  If it walks like a dangerously over leveraged company and talks like a dangerously over leveraged company, well...

 

Everyone in West Coast multi (Which probably makes up at least a dozen people here) knows people there has done deals with them, bought deals from them, or worked on their debt.

Lol.  You're argument is "I know people who have done deals with them"?  Unless you are one of the principals at Tides, you're just as far away from "first hand knowledge" as I am. 

Moreover, you are actively disproving your own objectively awful take, because if you read through this thread, it's person after person saying "I know a little bit about what is going on there and it's a giant shit show."  You have this idea that these two guys are geniuses, and you're defending them wholeheartedly, for no apparent reason.  The people who seem to have some direct interaction with Tides are saying that they're in a lot of trouble.  Common sense dictates they're in a lot of trouble.  What possible reason do you have to think they're doing well?  Because they own a lot of units?  I can name a number of prominent developer/owners off the top of my head who own a ton of units and who are in a ton of trouble because all of their underwriting assumptions have gotten blown out of the water.  Even the best operators in the business aren't immune to it.  You know what the difference is?  Most operators didn't buy tens of thousands of units with insanely cheap debt, in markets that were experiencing historic rent growth.  Tides had to outbid everyone else in order to win these deals; on its face that means they're at least somewhat stressed on most of them.  

The self-professed strategy is to buy with high leverage, high cost bridge debt, do the usual "replace countertops" rehab, jack rents and then sell.  The fact that they've grown so rapidly so recently with that strategy is exactly why I expect they're in trouble - they needed cheap credit and explosive rent growth in order to make their numbers work, both of those things are either long gone or on their way out the door.

So if you don't fall into one of those categories, you are pretty far out from the first hand knowledge and even further removed from the facts.

 

Yes, everyone has, some even have more knowledge than that. That's why we know their screwed.

Most of the lenders are trying to sell their notes already, some have already traded and at discount, so it's clearly happening. TBH it's pretty clear the only guys on here defending them are ones that work there or work with Eisendrath or in one of their funny money shops. Everyone else knows the score and isn't eating out of their hands. Time will tell is all, it's fine if you believe in them because you have something to gain if they pull a rabbit out of their hat, but I know they wont and already walking dead. 

 

Well if you like that opinion, I got another one for you.

I know you love throwing your institutional names around, especially CIM, who you've crushed it for right? Like this one: https://www.multihousingnews.com/tides-equities-closes-on-132m-recap-fo…

What a great deal, Costar says you bought it for $83M and sold it less than 2 years later for $132M! Wow! What value creation you must have done, definitely a home run. I wonder who would buy it for such a stupid price? Oh that was Tides again, you bought it from yourself when it couldn't sell on market and recaped with CIM. yikes. Well I'm sure you put on some long term agency money right? Oh wait nope the prospectus from MF1 suggests you put a 80% LTV loan at SOFR+460? Woah sure that 3% rate cap (7.60% current rate if my math is right) is saving you, because that $132M purchase price must have been at a 6 cap lol. Oh to make matters worse it looks like its a 2 year initial term, so really trying to give yourself a long horizon there, with all those guarantees.

Just another opinion.

That's just one deal and 10 min of digging on Costar and Trepp, keep talking on here and your going to get your team hurt more! Take the L.

 

This might be the funniest thread on WSO. Even the name of their shop is ironic.

The dictionary definition of Tides is literally “the rising and falling of the sea.”

To echo everything above; the bigger you are the harder you fall. Couple that with a lack of senior leadership experience, excessive short-term growth at the top of the market, and an ongoing recession - There is bound to be some dirt underneath the rug. 

 

One thing for sure these guys are getting a bunch of free press. But yea...seems like they're fucked with all those assets and the timing of acquisitions. I guess we shall wait and see.

 

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