Bet against Blackstone reflects multifamily troubles; Signature loan winners announced ... and more

The best national real estate stories from The Real Deal. Dec 16, 2023 [Share]( | [View in Browser]( | [$1 for 1 Month](     In today’s newsletter, we look at the [trouble facing Blackstone Mortgage](, and how it may reflect broader trouble for multifamily lenders. Plus, a $2.5 billion megaproject [can’t get across the finish line](, developers and agents [woo clients at Art Basel Miami Beach](, and the FDIC announces [the winners]( for [Signature’s loan portfolios](. These and more stories below.   [Bet against Blackstone Mortgage reflects multifamily troubles]( Blackstone Mortgage Trust (BXMT) may be in trouble, and at least one vulture is starting to circle. In this case, the vulture, renowned short-seller Carson Block. declared what seemed like a death sentence for the firm. The founder of hedge fund Muddy Waters warned of an impending liquidity crisis for the real estate investment trust. It’s common for short sellers to bash the firm they're betting against. But, in this case, Block did the math and shared the numbers. According to his research, up to 75 percent of BXMT's borrowers were unable to cover interest expenses. Block also revealed that a significant portion of the firm’s collateralized loan obligations were underwater, with values around 20 percent below the loan values. The saving grace for borrowers have been rate swaps and rate caps, which provide protection against rising rates. But about $16 billion in those protections on the REIT's $23 billion loan book are set to expire next year, Block says. Borrowers can repurchase those protections when they expire, but the costs have skyrocketed over the past 18 months with interest rate hikes. For one multifamily firm, the [cost of rate caps jumped from $513,000 in 2021 to $18.6 million this year](. And why wouldn’t they? Borrowers are essentially looking to buy insurance when the house is already on fire. Blackstone pushed back, saying its loans are still performing, and that most of its borrowers have been able to repurchase rate caps over the past year. The rebuttal may hold weight. But Block’s analysis reflects similar trends among other multifamily players. If Block is right that most borrowers would struggle to refinance, Blackstone Mortgage may be forced to modify loans to mitigate heavy losses.     [I'm an image]( [Blackstone, Rialto’s $1.2B bid wins Signature CRE loan deal]( On Thursday, Blackstone and Rialto won Signature’s CRE loan book with a $1.2 billion bid. Then, one day later, the FDIC announced that a partnership between Related and the Community Preservation Corporation [won the failed bank’s rent-stabilized loans](. [I'm an image]( [Basking in the spotlight: South Florida developers capitalize on Art Basel Miami Beach]( Developers and brokers flocked to South Florida last weekend for Art Basel Miami Beach, where they wooed big names in entertainment, real estate and hospitality. [I'm an image]( [Atlantic Yards at 20: Unfinished and facing foreclosure]( The $2.5 billion Atlantic Yards project kicked off 20 years ago to loads of fanfare. Now, it’s unfinished, and the project’s lender is looking to foreclose.   Advertisement   [I'm an image]( [Brand Studio Dynamic Build takes construction management to the next level]( [I'm an image]( [Adam Neumann prepares to launch first Flow property]( It’s been more than four years since Adam Neumann was forced out of WeWork. Now, he’s preparing to launch his first property through his startup, Flow. [I'm an image]( [WATCH: How 220 Central Park South ended Billionaires’ Row]( In the realm of New York real estate, no skyscraper captures the essence of luxury [quite like 220 Central Park South](. TRD is [proud to present the story in a new documentary](. [I'm an image]( [Compass cuts more off the C-Suite, eliminates COO]( Compass is undergoing another leadership change, as the firm announced the elimination of the chief operating officer position and the departure of Greg Hart on Tuesday. The move follows a series of high-level leadership shuffles within Compass during 2022. [I'm an image]( [Brand Studio Prospect Acquisitions Hunt for Deals]( [I'm an image]( [Breneman pounces on Reinsdorf-backed firm’s Chicago multifamily sales]( Chicago Bulls and White Sox owner Jerry Reinsdorf is making moves near the United Center, where the Bulls play. But he’s playing his cards close to the vest, for now. [I'm an image]( [SF office trade could signal turning market]( A major downtown San Francisco office deal left the seller with a major loss. But, the details surrounding the sale suggest that the city’s office market may be emerging from its bottom.   [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](