Editor’s note: From larger-than-life to an empty sack

“It’s a sad day when a duke of bombast tumbles to the reality that at day’s end, he’s nothing but an empty sack.” 

That’s a character’s verdict on smooth-talking Atlanta real estate mogul Charlie Croker, who is in the midst of defending his empire from those wanting to capitalize on his sudden bankruptcy and fall from grace. Lenders who have shelled out millions are ready to pounce to take back his properties, after many years of being appalled by Croker’s hubris and ego — and a little jealous of his wealth and larger-than-life image, too.  

This is the premise of “A Man in Full,” a new Netflix series starring Jeff Daniels, based on the Tom Wolfe book from the 1990s. While fictional, it could be ripped from today’s headlines, given the amount of distress happening in commercial real estate. It’s worth a watch for that reason alone. 

Our cover story this month could almost be an episode.

The story involves billionaire developer and film producer Charles Cohen, who could see the largest debt auction yet for the troubled office sector. 

Cohen, a New York real estate scion who channeled his wealth into an indie film empire, is being pursued by his lender Fortress after an alleged $534 million default in late March. It’s a battle between a rich aesthete stretched too thin and a cutthroat firm seen as a “lender of last resort.” 

As senior reporters Suzannah Cavanaugh and Keith Larsen write, the commercial real estate market “has been waiting for a fallout like this. It was anyone’s guess it would play out so publicly.”

With banks finally clamping down on properties hammered by low occupancy, remote work and the pandemic, more fallout is expected soon, and some commercial brokerages are expecting a surge in properties trading hands in the coming years.  

Billionaire Howard Lutnick, chairman of Newmark, is spending aggressively to lure top broker talent from around the country, with a bid to try to surpass CBRE and Cushman & Wakefield, the biggest firms.

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In his latest profile, senior reporter Rich Bockmann sketches out those ambitions. Lutnick, who took the stage last month at TRD’s annual New York forum, amazingly expects that another 500 to 1,000 banks — about a quarter of the country’s banking institutions — could go under. There are $2 trillion of commercial real estate loans maturing over the next three years, many of which will be in trouble. Not a good time to own real estate, but a good time to be a broker (and a buyer).

“The business of services of real estate are going to be FIRE!” Lutnick declared onstage. “This is the opportunity: ‘25 to ‘26! The greatest opportunity to buy real estate correctly that you will get in your generation.” 

It’s not much better on the other side of the aisle, in the residential market. Our special Hamptons section (which will also run in July and August) details the lull that the market has seen and the challenges brokers face there today — including agents from places like Palm Beach and Aspen swooping in and trying to steal their lunch.

Not that it excuses bad behavior. In a stellar investigative piece, senior reporter Katherine Kallergis lays out how brokers’ misdeeds rarely get punished by state licensing agencies or trade groups, part of a monthslong project. 

In Florida, more than 18,000 real estate complaints were submitted to the state in the past three years. Around 9,700 were found to be legally sufficient — meaning that the alleged problems would violate state law. From this group, just 47 agents had their licenses suspended and 407 had them revoked. This creates a black box: Agents may have been convicted in court of wrongdoing, but you would never know that by looking at the state licensing database. 

“Buyers and sellers, some making the most important financial decisions of their lives, lack crucial information, [and] agents outside the whisper network are also left vulnerable,” Kallergis writes. The important story — which left me feeling outraged and feeling that reform is necessary — is here for you to read. 

Finally, if you’ve finished with the issue and are looking for some beach reading, check out my wife, Julie Satow’s, new book, “When Women Ran Fifth Avenue.” 

It’s a look back at the heyday of department stores and the women who ran them. Think “Mad Men,” but if women ran Don Draper’s firm. The Wall Street Journal said it’s nonfiction that reads “like a novel.” 

Enjoy the summer!