What is the strangest deal you've ever worked on ?

DBisnolongerBB's picture
Rank: Monkey | 61

1st-year Analyst here, MD just asked me to underwrite a mixed-use property with a cricket stadium as one of many income streams within the property. Definitely one of the strangest deals I've come across.

What's yours ?

Comments (42)

Apr 30, 2019

Cannot say I've ever worked on a cricket stadium, so you win for the weirdest I think. I've done event centers, food production facilities, farms/ranches, swap meets, etc., but that one is bizarre.

Most Helpful
Apr 30, 2019

Strangest I've looked at was a Brothel in Vegas MSA while working for a family office. Looked at it through the lens of a hotel or resort, as some men or couples would stay overnight and you could equate the services provided to a spa. Operationally intensive real estate. Traded at very high cap rates because there's not much else the real estate could be used for.

Definitely some interesting metrics. Looked at "services provided" per day (essentially BJ per day) rather than occupancy, ADR fluctuated based on demand for higher cost services. Seller tried to justify that tax rates on their services would become more attractive over time, and that as American culture becomes more sexually liberal there would be higher demand for the kink services which charged a premium.

Also, strong economy ==> fewer women who want to work in sex work so they follow the same cycle as regular hotels

    • 26
May 1, 2019

This made my day and needs to be added to the covered land plays thread

May 1, 2019

It would be funnier if it it was true

    • 1
    • 3
Apr 30, 2019

Not weird in terms of product type but this deal blew up... Literally.

The night before closing day one of the tenants (an 83-year-old woman) went into the building and lit it on fire because the seller was forcing her to vacate upon the close of escrow.

Her business has been there for like 25 or 30 years and she was pissed. The whole thing was caught on camera from a neighbor's property and she was arrested.

    • 2
May 2, 2019

That's pretty crazy

Apr 30, 2019

This summer worked on the sale of a Museum.

May 1, 2019

The newseum?

    • 1
May 1, 2019

My first 3 deals were a pharma co that made diarrhea pills, a fertilizer company and a urine analysis company. I was the fecal analyst.

    • 4
May 21, 2019

Sounds like a real shit job.

    • 2
May 1, 2019

There are some funny ones, but cannot say without the risk of being outed.

"Work ethic, work ethic" - Vince Vaughn
    • 1
    • 4
May 3, 2019

booooo

May 3, 2019

Okay okay fine, I'll share. Sex toy manufacturer.

"Work ethic, work ethic" - Vince Vaughn
    • 1
May 1, 2019

Worked as an analyst on a CMBS loan for an old wholesale Jewelry exchange building in the ghetto (used to be a nice suburb when it was built 50+ years ago) in a major city. Building was ~99% occupied for 10+ years to about 300 tenants most on MTM leases that escalated annually with CPI. The refinance cash-out was probably 15x owner's basis in the property. Building was built like a bunker with enormous cement structural columns to bear the weight of all the metals with a gigantic vault on the ground floor. Armed security guards and cameras everywhere.

    • 1
May 1, 2019

The one at the top of my list is not as hilarious or weird as the others, but a great example of sheer stupidity. I once worked on a condo deal...wait for it....ON A GROUND LEASE. WTF. In concept it's possible to make it work with a well-structured ground lease and there are (very few) successful examples, but this thing was terrible. To give you an idea of bad this thing was, the common charges (on top of you know, the actual common charges) for the ground lease payments averaged ~$10k per/unit/mo. Imagine caring so little or being dumb enough to actually buy one of those units. lol.

    • 2
May 1, 2019

This is more common than you would imagine in NYC.

    • 1
May 1, 2019

Yep. I actually see this pretty often. Not a rule of thumb or anything, but saw two nearly identical condo buildings being built in close proximity (same size/amenities/finishes), the ground lease one sold units about 15-20% below the fee ownership building.

May 21, 2019

Sounds like the Excelsior on 57th, or at least one similar

May 1, 2019

Mixed use industrial

May 1, 2019

mixed with what?

Array

May 2, 2019

Multifamily

May 21, 2019

I've seen industrial/office or industrial/retail. Industrial/MF is a bit strange though.

May 2, 2019

Most jobs I've done tbh

May 2, 2019

Have had a handful of cases where I've had to update vacancy projections due to drug busts. Saw one go down once during a property tour and updated the pro forma when I got back to the office that afternoon. It actually works in your favor if it's a regulated apartment, as long as investors don't know the reason behind the vacancy or at least aren't skeeved by it.

May 5, 2019

We advised a biotech company that had run on limited funding for some time. We learned during the process that to avoid potential seizing of assets that the CEO had several commercial freezers containing biological materials moved to his garage and then had moved them back. During this time of course there was no temperature monitoring.

    • 1
May 5, 2019

When I was a junior banker I sat next to the latin coverage group. The CEO of one of their clients shot someone during the IPO quiet period. As the senior banker said, we'd probably would have been OK if he used a silencer.

    • 2
May 5, 2019

That took quite a turn...

May 21, 2019

Wait what?

May 22, 2019

I repped a potential buyer of Doral when this happened ...
https://www.bloomberg.com/features/2016-doral-bank...

May 21, 2019

I had a Tax Credit Rehab Project in the middle of SEC country. The property was a garden design and the weekend before work began on the 2nd building it burned down due to some geniuses trying to clean up a meth lab in their unit. The worst part at least for us was we lost money as the insurance proceeds paid for a new building and therefore we didn't earn the tax credits or our fees on that building. I don't miss affordable housing for a second.

"Capitalism: God's way of determining who is smart and who is poor." Ron Swanson

May 21, 2019

I once worked on a refi of a building where a porn studio was the largest tenant. Boy was that a fun site visit.

    • 1
May 21, 2019

Were the couches comfy?

    • 1
May 22, 2019

Sticky...

May 21, 2019

Purchased a gang infested multifamily building. We found 2 pounds of marijuana and large bag of cocaine in the basement when doing a final walk through.

May 23, 2019
Comment

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

    • 11
May 24, 2019