Tides faces cash crunch; SL Green’s office breakthrough ... and other top stories from the week

The best national real estate stories from The Real Deal. Jul 01, 2023 [View in Browser]( | [$1 for 1 Month](     In today’s newsletter, we look at [Tides Equities’ growing cash flow issues]( and the [daunting “wall of maturities” facing multifamily lenders](. Plus, developer Rishi [Kapoor’s struggles keep getting bigger](, [AI’s growing impact on real estate](, and [SL Green makes a major office sale in Midtown Manhattan](. These and more stories below.   [Facing cash crunch, Tides may call investors for more money]( Tides Equities was once among the most aggressive multifamily buyers in the country. The LA-based firm spent $6.5 billion on apartments across the Sun Belt in 2021 and 2022. It [amassed 15,000 units in Texas alone](, one of the region’s hottest markets. Like so many multifamily investors, Tides made those purchases with floating-rate loans, and now they’re paying the price. As rising interest rates eat into the firm’s cash, Tides’ co-founders Sean Kia and Ryan Andrade have informed investors about the need for capital calls to bolster the portfolio. As many as nine of the company’s properties have negative cash flows. The clock is ticking on the Tides’ debt. The investment firm has $1.5 billion across 47 loans maturing by the end of 2025, with a median loan size of $29.1 million The writing has been on the wall for some time for Kia and Andrade, not to mention the rest of the commercial industry. (The Real Deal published a profile on the firm in February [questioning whether Tides could survive the rising tide of interest rates](.) While much of the conversation around distress has (rightfully) surrounded the office sector, Tides’ struggles show how multifamily investors are fighting a similar battle. Blackstone has faced similar struggles with its Manhattan multifamily portfolio. In March, the investment giant’s $271 million loan secured by 11 Manhattan apartment buildings went to special servicing because the cash flow from the properties wouldn’t cover the debt service. The multifamily sector is facing an [$8 billion "wall of maturities" this fall](, thanks to the period of aggressive investment activity that Tides and so many other investors took advantage of. While some owners will find ways to sort things out with their lenders, others will have to make challenging decisions. To weather the storm, Tides is temporarily using its own funds to make mortgage payments. However, the co-founders noted the possibility of returning keys to lenders if the situation worsens.     [I'm an image]( [SL Green sells off 245 Park stake in breakthrough for office market]( SL Green sold a 50 percent stake in a Midtown office tower in a deal that values the tower at $2 billion. The sale is a breakthrough for the New York office sales market, which has been sluggish all year. [I'm an image]( [Rishi Kapoor’s Miami Beach co-living project shut down]( Miami Beach building officials halted construction at Rishi Kapoor’s co-living project due to a lack of permits. It’s the latest in a string of troubles for Kapoor, who came under fire for his questionable business relationship with Miami Mayor Francis Suarez, a presidential candidate. [I'm an image]( [Rise of the machines: How AI is a game changer for developers]( AI has been heralded as a groundbreaking tool for residential agents and proptech firms. But it could have the biggest impact for developers looking to streamline their most ambitious projects. Some firms have already found ways to use AI to slash project timelines by months while cutting costs on materials and utilities.   Advertisement   [I'm an image]( [Brand Studio Demand for C-PACE rises as liquidity tightens]( [I'm an image]( [Prologis pays $3.1B for Blackstone industrial portfolio]( Prologis, the world's largest industrial property company, is set to grow through a $3 billion deal with Blackstone. Prologis will acquire nearly 14 million square feet of industrial space spread across 70 properties in Dallas, South Florida, NYC and other markets. [I'm an image]( [DuPage downturn: Inside the decline of suburban Chicago offices]( Distress looms in Chicago's suburban office market as a new wave of office trouble looms. DuPage County is facing a daunting $270 million question, with seven significant debts tied to struggling office properties that failed to retain tenants amid post-pandemic real estate decline. [I'm an image]( [What Terra’s exit from record $1.2B Miami land deal signals for the market]( South Florida commercial brokers got a harsh reality check last week when developer David Martin's Terra pulled out of a $1.2 billion purchase of a Miami property. The deal was supposed to kick the region’s industry into gear. Instead, the market remains mostly unchanged. [I'm an image]( [Umpqua Bank halts multifamily lending on West Coast]( Umpqua Bank has billions of dollars of real estate loans on its books. But, the Tacoma, Washington-based lender is backing away from the business, halting all multifamily lending on the West Coast. Umpqua’s decision follows the collapse of San Francisco-based First Republic, creating a void in the West Coast’s multifamily space. [I'm an image]( [“Wolf of Airbnb” pleads guilty in rental scheme]( Konrad Bicher, the self-proclaimed "Wolf of Airbnb," once described himself as someone “who is hungry and ruthless enough to get on top of the financial ladder.” Bicher has fallen from that ladder, pleading guilty to wire fraud after his short-term rental scheme unraveled. Bicher’s scheme was primitive but effective: collect rents from subletters, but never pay the landlord.   [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](