Welcome to The Real Estate Venturist. Every other week, this newsletter will give you a behind-the-scenes look at what it’s like to be a real estate entrepreneur. As always, this is not investment advice and merely my opinion.

Real estate cycles hit everyone, but smaller firms shoulder it differently

Since the pandemic, real estate has been on a roller coaster ride. If you timed it perfectly—bought in 2020 and sold in 2022—you did extremely well. But if you still own office or apartment buildings purchased during that period, then, like most owners, your property’s value is down, operations are suffering, or both. It’s inescapable.

Some markets are recovering quickly, like New York City. San Francisco appears to be following a similar trajectory. Urban areas across the rest of the country? Not so much. Suburban areas of high-growth markets? They were hit with the most new apartment supply, and operations—and values—are now lagging. Meanwhile, steady Midwest markets that didn’t see hyper rent growth or the resulting surge in new apartment supply have held up just fine.

It must be just the syndicators experiencing pain, right? Some critics will claim syndicators didn’t know how to underwrite, ignored new supply, or didn’t see rising interest rates coming. Nope. It’s not just them—it’s also the big firms. Blackstone, Stockbridge, UDR, Veritas, Hines & Oaktree, and Starwood are all taking losses. Let’s take a look at some headlines:

Blackstone is offloading a flopped $1.8 billion investment in senior housing. [WSJ] [The] investment giant is selling off a portfolio of about 90 properties, in some cases at over 70% below their purchase price.

Stockbridge offloads San Jose apartments at loss from 2019 price. [Silicon Valley Business Journal] They paid approximately $104 million in 2019 for the 230-unit LINQ apartment complex and sold it for $97.6 million in 2025.

UDR takes loss on $128M Williamsburg sale. [The Real Deal] UDR paid $132M in 2019 for the 188-unit apartment building in Brooklyn.

Veritas surrenders 300-unit San Francisco residential portfolio. [San Francisco Business Times] Veritas Investments, the biggest residential landlord in San Francisco, stands to lose control of more than a third of its apartment portfolio in San Francisco as its lenders seek to sell $1 billion in delinquent loans tied to its properties.

Hines, Oaktree sell Walnut Creek office complex at loss. [The Real Deal] The pair purchased the Ygnacio Center office building in 2018 for $210 million and sold it for $110 million in 2025.

Wells Fargo Center sold for $85 million, a 73% discount. [MSP Business Journal] Starwood paid $314M in 2019 for the downtown Minneapolis tower. It was sold to a joint venture group in 2024 for $85M.

In this group you have arguably the most successful investment company of all time, Blackstone. You also have a well-regarded public apartment REIT, UDR. There are deep-pocketed private equity funds like Starwood, Oaktree, and Stockbridge. Then there’s Hines, a name-brand developer. And finally, Veritas, a once-small operator that went institutional by attracting elite hedge funds (Baupost) and pension funds (Ivanhoe Cambridge). These groups are sophisticated. They couldn’t have predicted how the pandemic and its aftershocks would reshape their investments. Could they?

Yet smaller companies seem to be held to a different standard. I could easily produce a similar list of deals that went south for syndicators. Here are just a couple of high profile cases:

Tides faces foreclosure on $30M Austin apartments. [The Real Deal] The property is the latest in a slew of Tides properties to face a forced sale, as the syndicator has weathered well-documented troubles keeping up with debt payments.

GVA’s defaulted debts top $600 million, with two more foreclosures. [The Real Deal] Sunbelt syndicators, such as [GVA], have struggled under the weight of rising interest rates. Many leaned on floating-rate loans to buy properties when prices were at or near peak and planned to renovate units, raise rents and then sell.

Across both large and small players, the same macro themes show up again and again:

• Too much leverage (Veritas, GVA, Tides)

• Urban office, not in New York or San Francisco, though plenty of big name groups lost properties there (Starwood)

• Suburban office (Hines/Oaktree)

• Poor timing; they couldn’t hold long enough to sell (Stockbridge, UDR)

• Bad business plan (Blackstone)

• Buying at the peak (All of them)

• Buying in the Sunbelt (GVA, Tides)

• Buying in heavily Covid-impacted markets (Stockbridge, Hines/Oaktree)

I will never understand why the big guys get a pass from investors while the smaller ones don’t. During the Great Financial Crisis (GFC), institutions famously lost billions and then turned around and kept raising money for their next act. The big firms are entrenched with large pensions and endowments. Replacing a Blackstone or Oaktree is simply too much work. The people are still smart, they just made a bad investment.

Smaller investors have more on the line: income, reputation, and the trust of their investors. They typically don’t have entrenched capital sources, so keeping investors happy stays front of mind. I guarantee that any smaller firm facing challenges in their portfolio is trying much harder to find a solution than a big firm that will just write off the investment. Institutional investors see the macro headwinds and rationally move on. Individual investors often assume the syndicator isn’t doing enough, as if they’re not already thinking about it night and day.

So, in the spirit of Thanksgiving next week, I’d like to give thanks to our investors. We have a great group of intelligent, thoughtful people who know when to give us grace and when to offer feedback. Real estate has always moved in cycles, and this environment, like every one before it, will eventually give way to a stronger market.