Bank OZK gets a double downgrade; Trump guilty in felony trial... and more

The best national real estate stories from The Real Deal Jun 01, 2024 [View in Browser]( | [$1 for 1 Month]( [The Real Deal Logo](   [The National Logo](   In this week’s newsletter, the Arkansas-based lender that funded a construction boom sees a double downgrade from analysts at Citi. Plus, [WeWork]( drops a Miami location, [Trump is guilty](on 34 counts, and we go inside celeb-broker [Josh Flagg’s exit]( from Douglas Elliman.   Citi analyst slams Bank OZK with double downgrade In 1979, then-25-year-old George Gleason bought the Bank of the Ozarks with $10K in cash and a $3.6 million loan. Today Bank OZK, as it's now known, has more than $30 billion in assets. And since 2003, when it founded the real estate group that focuses on construction lending, it’s lent a hand to a nationwide building boom. Bank OZK has [a unique strategy](. It built its business around construction lending, which has traditionally been viewed as the riskiest type of real estate lending, The bank, however, says it only loans on low leverage points and is always the sole senior secured lender. And that’s been a good bet for a long time. But earlier this week, analysts at Citi signaled that some of its loans had become a little trickier. “We have newfound, but substantial concerns with what we believe to be OZK’s largest individual loan, a multi-use project in Atlanta, and Life Science construction lending in general,” Citigroup analyst Benjamin Gerlinger said in a client note. He downgraded his recommendation on the Bank OZK stock from buy to sell, skipping the hold option. Gerlinger looked at two projects specifically – the Atlanta mixed-use development and a research and development district in San Diego that’s struggled with leasing. Gerlinger said this was “indicative of a difficult Life Science construction lending market.” Life sciences were a [bright spot]( for developers and investors post-Covid. But now the venture capitalist funders who made the startup boom happen are looking to [greener pastures, like AI.]( That could create a glut, with [more than 20 million square feet]( in the construction pipeline. On Tuesday evening, the bank’s stock closed at $46.19. It opened Wednesday at $41.36 and dropped by as much as nearly 14 percent by midday – the largest drop within a day for the company since March 2020. It had recovered a bit by Friday, hovering around $41.60. In a tight lending market, Bank OZK is among the few lenders actively making large CRE loans. We’ll keep following the story. For now, check out our [deep-dive into the bank’s strategy]( from 2019, and top news from last week below.   Together with Leyster Capital Flexible Financing For Real Estate and Beyond [Leyster Capital]( Leyster Capital meets the global liquidity needs of families, private individuals, and other substantial asset owners. We creatively and efficiently leverage multiple classes of real estate, collectibles, and financial assets. Our expertise and global resources give our borrowers the advantage of timeliness, certainty and flexibility.   [I'm an image]( [Jury convicts Trump on all 34 counts in hush money trial]( A Manhattan jury convicted Donald Trump in the criminal hush money trial related to payments made to Stormy Daniels. [I'm an image]( [WeWork out: Co-working giant closing outpost in Miami Beach in bankruptcy restructuring]( Co-working firm wants to close the location as part of its nationwide bankruptcy restructuring plan. [I'm an image]( [Inside Josh Flagg’s exit from Douglas Elliman]( Inside the “Million Dollar Listing: Los Angeles” star’s jump from Douglas Elliman to Compass earlier this year.   Advertisement   [I'm an image]( [Brand Studio This Nashville Condo Hotel is Also Home to The City’s Most Luxurious And Well Amenitized Office Space]( [I'm an image]( [Stephen Schwarzman announces he is backing Trump for 2024Â]( The Blackstone chair was one of Trump’s top donors in 2020, but supported Chris Christie during the GOP primary. [I'm an image]( [What Dade Phelan’s primary win means for Texas casino development]( Sands Casino magnate Miriam Adelson fueled Texas speaker of the house Dade Phelan’s primary victory, with casino legalization on horizon. [I'm an image]( [PBC lands $385M financing from Israeli bond market for Bryant Park office tower]( Property & Building Corporation tapped into the Tel Aviv Stock Exchange to pay off its $385 million loan from JP Morgan Chase on its Bryant Park office tower [I'm an image]( [Brand Studio Download Now: Unlocking Your Property’s Full Potential with Amazon Key](     [The Real Deal Logo]( [Facebook]( [Twitter]( [Instagram]( [LinkedIn]( [YouTube]( [Manage Newsletters]( | [Unsubscribe]( | [Privacy Policy]( | [Subscribe]( | [Advertise]( The Real Deal 450 West 31st Street, New York, NY 10001 ©2024 TheRealDeal. All rights reserved. [View Online](