Josh Zegen

What’s been the biggest highlight and biggest challenge of 2025 for your team thus far? 

Our biggest highlight was financing the conversion of Pfizer’s former Manhattan headquarters into residential use — a $720 million loan we closed in May. This was one of the first large-scale office-to-residential projects to take advantage of the new 467m tax abatement, delivering 1,600 much-needed rental units and 30,000 square feet of retail with a 75 percent market-rate, 25 percent affordable split. The scale, prime location steps from Grand Central, and strength of our experienced sponsors — Nathan Berman and David Werner — made it one of a kind. We executed the full $720 million on balance sheet within 90 days without syndication risk — providing speed, certainty and a highly customized solution. 

Our biggest challenge was navigating the tariff-driven market volatility early in the year. While we expected some policy shifts post-election, the extreme levels of global tariff threats created real dislocation. In hindsight, we could have been more aggressive capturing opportunities during that turbulence when spreads were wider and floors were higher.

Which lending opportunities that didn’t exist last year are you seizing today?

2025 has been a year of increased transaction activity, driven by tightening spreads that supported more recapitalizations and investment sales compared to 2024. With the continued expansion of our platform, we’ve capitalized on opportunities to broaden our product mix — most notably lending to other lenders through A note and note-on-note financing, and originating very senior construction and transitional loans that compete with banks and insurance companies rather than traditional debt funds.

The growth of subordinate capital markets has created a unique environment where we can offer slightly higher proceeds than banks, while partnering with others providing B notes, mezzanine debt, or preferred equity behind us to fill the equity gap. This allows us to compete across the entire capital stack and engage with both direct borrowers and peers in real estate private credit — many might have been considered competitors in the past. Throughout 2025, we’ve focused on educating the market about our ability to price and execute competitively at every level of risk.

You’ve financed a number of office-to-resi conversions this year, including the former Pfizer building. Why is this a good fit for MRC?

Office-to-residential conversions are a natural fit for Madison given our deep experience in transitional and construction lending, our ability to underwrite complexity, and our willingness to provide large-scale balance sheet financing with speed and certainty. The former Pfizer headquarters — a $720 million loan we closed earlier this year — is a great example of one of the first major conversions taking advantage of New York City’s 467m tax abatement. Projects like this require structuring creativity and confidence in execution, both of which align closely with our platform’s strengths.

We see this conversion trend continuing over the next several years, driven by outdated office stock and an ongoing housing shortage in major urban markets. While not every office building is suitable for conversion, the right assets in the right locations — paired with experienced sponsors and supportive policy — will continue to create compelling opportunities. For Madison, this space remains a core area of focus where we can bring scale, flexibility and real execution certainty to transformative projects.

What do you wish you knew coming into 2025 that you know now?

As we entered 2025 fresh off Trump’s re-election, the market was euphoric about the prospects of a second Trump presidency, though there was cautious anticipation around potential inflationary policy changes. While tariffs were expected, few anticipated that global tariff threats would be pushed to the extreme levels we ultimately saw.

While 2025 is shaping up to be our biggest origination year since 2021 — projecting roughly $20 billion in real estate credit across all product lines, including direct CRE loans, lender finance, and residential credit — I wish we had locked in even more transactions in the first half of the year. The early turbulence and dislocation created opportunities with wider spreads and higher floors that, in hindsight, we could have captured more aggressively.

Lighting Round:

“The Summer I Turned Pretty” or “The Morning Show”?

“The Morning Show.”

Where will rates be one year from now?

Most likely lower. 

Most significant moment of 2025: Taylor Swift’s engagement or Fed rate cuts?

Fed rate cuts.

How do you shake off market stress?

Play tennis.

NFL or college football?

NFL.

What song would be the theme tune of your life?

“Uptown Funk” by Bruno Mars.

Ultimate dinner party: Pick three guests?

Steve Jobs, Henry Kravis, The Weeknd.

Thanksgiving: Chef or spectator/taster?

I like to cook, so chef.