The most eye-popping news this morning is word that Goldman Sachs and Ballast Investments are surrendering 82 apartment buildings totaling 1,200 units to their lender. The JV defaulted on $688M in loans from RBC Real Estate Capital and is expected to turn over the properties in a deed-in-lieu-of-foreclosure in the next few weeks, the San Francisco Business Times reports.

Defaults and foreclosures have been on the rise across the industry, but it isn’t often you see Goldman’s name behind one. Ballast has been an active multifamily investor of late, picking up 2,100 units of Veritas’ portfolio with Brookfield at the beginning of the year.

Beyond that, we have a few of the usual suspects doing their usual things. Fed execs are again saying they are worried about CRE’s impact on bank balance sheets, and Adam Neumann is insisting he’s still got a shot at buying WeWork back. He has until May 30 to make his case.

And Amazon is back, baby, signing a slew of large industrial leases in Q1 after stepping back and reducing its footprint two years ago. It has signed at least six leases larger than 1M SF each, which is as many as it did all of last year, according to CoStar.

— Catie Dixon, Mark F. Bonner, Jay Rickey and Kayla Carmicheal

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On Our Radar

• The assets of upscale convenience store retailer Foxtrot will be sold on a Microsoft Teams videoconference at 1 p.m. ET. Inventory, furniture and fixtures are all included — except, perhaps, for the products store employees were reportedly giving away when Foxtrot's abrupt closure was announced last month. As Bisnow's Ryan Wangman reported this week, Foxtrot's closure means a bunch of premium real estate is suddenly available.

• Today is National Public Gardens Day: Mark was in London this week, so he's going to shout out the lushness of Hyde Park, where Bisnow hosted a nearby healthcare event on Wednesday. 

• Weezer's Weezer (“The Blue Album”) turns 30 today. Bisnow Chief Copy Editor Tim Carroll: “It's an excellent album, and with it producer Ric Ocasek immediately accomplished something more interesting than anything he did with the Cars.” A Cars diss? Say it ain't sooooo …

• Mother’s Day is Sunday. Oh, yeah, say hi to your mother for us. 

This Morning’s News

Vacasa Restructures, Lays Off 800 Employees (OPB and Yahoo Finance): Vacation rental management company Vacasa unveils a restructuring plan, resulting in the dismissal of 800 employees. The company said bookings are down and the price per night is below expectations. It doesn’t expect to be profitable this year. Explore the details of Vacasa's restructuring efforts and the impact on its workforce and business operations.

Vici Originates $250M Mezz Loan For Great Wolf (VICI): Vici Properties, a hospitality REIT, sealed a $250M mezzanine loan agreement with Great Wolf Resorts backed by nine resort properties. THe portfolio nears 700K SF of indoor and outdoor waterpark space plus 4,000 rooms, 59 restaurants and 80K SF of meeting space. As part of the deal, Great Wolf repaid an $80M mezz loan to Vici for Great Wolf Lodge Maryland. Learn more about the origination.

Today’s Featured Story: Short Seller Says Arbor Realty Committed Fraud To Avoid Reporting Deeper Losses

Arbor Realty Trust is yet again the subject of a short seller report, this time alleging it has hidden losses by funding another Arbor-owned entity to purchase assets from its foreclosures and keeping it all off the books. The fraud accusation sent the mortgage REIT’s shares down 5% Thursday, but Arbor told Bisnow everything is above board and it just hasn’t disclosed the sale yet because it happened in Q2. 

“We will not respond to short seller reports and are very comfortable with our audited financial statements, public comments and detailed disclosures,” Arbor Chief Financial Officer Paul Elenio said.

Arbor has had a lot of opportunities not to respond to short seller reports. Ningi Research and Viceroy Research have been targeting the firm for more than a year, and much of their commentary focused on the volume of delinquencies in its loans.

Read the full story here. 

Hedge Fund Deer Park Raises $170M For Debut Mortgage Opportunity Fund (Bloomberg): Deer Park, spearheaded by Craig Scheckman, secured $170M for its inaugural mortgage opportunity fund. The money manager is known for savvily buying up deeply discounted assets in the Global Financial Crisis and this time is looking to buy up mortgage-backed securities originated in 2007 and earlier. Read further details about Deer Park's strategy.

Peloton Alleges Flexport Overcharged Millions (The Load Star): Peloton has filed a claim with the Federal Maritime Commission claiming Flexport erroneously imposed millions in detention and demurrage fees. The exercise equipment manufacturer said Flexport didn’t move its imports quickly enough and beyond being hit by “unfair” fees, it had to use a third-party logistics provider to transport its equipment. Dive deeper into the supply chain dispute.

Howard Hughes CEO Sees Strong 2024 After Posting Loss In Q1 (CoStar): Howard Hughes lost $52.5M in Q1 but posted its highest home sales volume in three years. CEO David O’Reilly said he expects demand for its Nevada and Texas master-planned communities to buoy its earnings for the rest of the year. Find out more about Howard Hughes' outlook.

BP Eyes Tesla's Supercharging Sites (Bloomberg): BP is exploring the acquisition of Tesla supercharging sites as part of its strategic expansion in the U.S. electric vehicle market. It is looking to “aggressively expand [its] real estate” and has pledged $1B over the next six years, part of it to add more than 3,000 chargers in the U.S., and has said it wants to hire Tesla’s laid-off employees. Learn about BP's plans to leverage Tesla supercharging sites for its U.S. growth strategy.

University of Michigan's Consumer Sentiment Gauge Records 6-Month Low (Morningstar): The University of Michigan’s consumer sentiment survey recorded its lowest reading in 6 months this morning — 67.4 in May vs. 77.2 in April — as Americans said they anticipate higher inflation to continue. Dive into the numbers.

New Efforts To Unlock The Potential Of D.C.'s 3,000 Vacant Properties (Bisnow): A concerted effort is underway to activate the approximately 3,300 vacant properties — 10% of which are blighted — scattered throughout Washington, D.C. These initiatives involve a collaborative approach between local government agencies, community organizations and developers to repurpose vacant spaces, revitalizing neighborhoods and spurring economic growth. Explore the strategies.

Student Housing Pre-Leasing Slows (Yardi Matrix): Thirty-five U.S. student housing markets saw double-digit rent growth last month, while 23 posted rent declines. State schools across the Sun Belt with growing enrollments have seen the biggest jumps in rents, according to Yardi Matrix. A total of 19 schools were at least 90% pre-leased as of April. Learn the details of Yardi Matrix's analysis.

CBRE Sees Emergence Of Distress, Opportunities (CBRE): CBRE expects many maturities to be pushed out to 2025 or beyond. But as sellers are increasingly dropping their prices to get deals done and loan maturities lead to foreclosures and distressed sales, more acquisitions and asset repositionings are on the horizon. Dig into the full report.

Aldi Pushes Suppliers To Slash Costs, Embrace Going Green (Reuters): Aldi is urging its suppliers to prioritize cost reductions and embrace sustainability as it ramps up expansion efforts across the U.S. Aldi said it will open 800 new stores in the next few years. Explore Aldi's initiatives.

China Vanke A ‘Litmus Test’ In Country’s Real Estate Crisis: (WSJ): China Vanke has thus far avoided defaulting on debt, but it's under pressure and may be the first in line if Beijing intervenes in the country's property crash. Gain insights into the implications of China's real estate woes on global markets.

Optimizing Workspaces For Talent Retention (JLL and Workplace Insight): JLL delves into leveraging workspaces as a strategic asset for talent attraction and retention. With data-driven strategies and case studies, the report highlights the correlation between optimized work environments and employee satisfaction, emphasizing the need for organizations to prioritize workplace design and amenities. Discover JLL's findings and stay ahead in the evolving landscape of workplace dynamics.

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The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from ChatGPT. We’d love your feedback! Email us at firstdraft@bisnow.com. 

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