Rise48 denies distress; Blackstone looks to sell NYC properties ... and more

The best national real estate stories from The Real Deal. Jul 16, 2023 [Share]( | [View in Browser]( | [$1 for 1 Month](     In today’s newsletter, we look at Rise48. The data says the multifamily investor is struggling to make debt payments, but [the firm’s CEO says otherwise](. Plus, Blackstone looks to [unload industrial properties](, David Martin’s Terra [steps into some Miami Beach drama](, and a developer is found guilty of [two separate murder-for-hire plots]( (among other charges). These and more stories below.   [“We are not distressed:” Rise48 disputes red flags on loans]( Multifamily syndicators are in trouble. In recent weeks, The Real Deal detailed a handful of investors — Tides Equities chief among them — that are [facing cash flow issues thanks to higher debt costs](. One of those syndicators is Rise48. Rise48 employs a textbook fix-and-flip strategy, but that business model is now being threatened by rising rents and delayed renovations. The firm is struggling to make debt payments on its properties throughout the Sun Belt, according to data from Morningstar, and it may not be able to refinance or extend loans coming due. The proof is in the data. But the company’s CEO, Zach Haptonstall, disagrees. Haptonstall posted a 16-minute rebuttal video claiming seven times “we are not distressed.” Still, he admitted later in the video that the debt service coverage ratio (DSCR) at one Phoenix property could be as high as 0.73 in December, as opposed to the 0.67 reported in the earlier story. A DSCR below one is a sign of negative cash flow — and a potential death sentence for investors. While Haptonstall claimed his firm can be cash flow positive by early 2024, Morningstar projected otherwise. Rise48 is facing other issues, too. The firm currently has a 6.6 percent interest rate cap, but it is at risk of losing that protection if cash flows remain low. Haptonstall also claimed Rise48 has “always taken out lower leverage loans,” but, again, ratings agencies say otherwise. This doesn’t mean the end for Rise48. Multifamily valuations may have fallen by as much as 20 percent, but none of the firm’s loans are delinquent. With a little help from Fed Chair Jerome Powell, the syndicator could be in better shape a year from now. More likely, Haptonstall, like many of his fellow multifamily investors, will have some tough decisions to make.     [I'm an image]( [Blackstone lists NYC, Long Island industrial properties]( Blackstone is selling six NYC-area industrial properties just weeks after selling a $3 billion industrial portfolio to Prologis. But the sale won’t end the investment giant’s dominance in the sector: It still holds a $175 billion industrial portfolio. [I'm an image]( [Plot twist: Terra steps into oceanfront Miami Beach condo building drama]( David Martin’s Terra has entered a years-long buyout battle on Miami Beach. Mast Capital has long been working on a buyout at the Amethyst building, but Terra could swoop in and take the cake. [I'm an image]( [LA developer found guilty in murder-for-hire and arson plots]( LA developer Arthur Aslanian was found guilty by a federal jury of plotting a failed contract killing and committing arson, among other charges. Aslanian allegedly sought to kill two former business partners, both of whom either sued or threatened to sue him.   Advertisement   [I'm an image]( [Brand Studio Hilco: Transforming industrial sites into opportunities of economic growth]( [I'm an image]( [Mary Trump loses inheritance suit revival effort]( In 2020, former president Donald Trump’s niece sued her family for allegedly ruining her inheritance by, among other things, colluding with an appraiser to undervalue her holdings. Now, it appears that the lawsuit has failed. [I'm an image]( [Tides’ largest investor made a $300M+ bet on the firm]( As Tides Equities faces mounting problems with its troubled real estate portfolio, the firm’s investors could be on the hook. That’s especially bad news for AMC Investments, which poured $322 million into the syndicators deals. [I'm an image]( [Mapping Ashford REIT’s troubled hotel portfolio]( Monty Bennett’s [Ashford REIT is expected to hand 19 hotels]( — [including four in the Bay Area]( — back to lenders to save hundreds of millions in debt payments. Bennett’s remaining portfolio — which he saved by making a $129 million payment — is spread across the country. [I'm an image]( [Brand Studio Demand for C-PACE rises as liquidity tightens]( [I'm an image]( [Commercial players lead charge against transfer tax hike]( Progressives across the country have been pushing for increased transfer taxes. In Chicago, the commercial industry is leading the fight against Mayor Brandon Johnson’s proposed transfer tax, which would add a 2.65 percent charge on any commercial or residential deal over $1 million. [I'm an image]( [Latch shows 60% of staff the door]( The smart-lock startup Latch announced plans to reduce its workforce by 59 percent to save millions of dollars. The company, backed by Tishman Speyer, has faced a challenging year with the resignation of its co-founder, Luke Schoenfelder, and reporting inaccuracies in its financial statements.   [Facebook]( [Twitter]( [Instagram]( [LinkedIn]( [YouTube]( [Manage Newsletters]( | [Unsubscribe]( | [Privacy Policy]( | [Subscribe]( | [Advertise]( The Real Deal 450 West 31st Street, New York, NY 10001 ©2023 TheRealDeal. All rights reserved. [View Online](