From the November issue: The nine New York City real estate titans that earned ink on this year’s Forbes 400 list have a combined worth of nearly $21 billion, a sum surpassing the GDP of dozens of sovereign countries. Together, they control hundreds of millions of square feet of real estate the world over — and their collective portfolio includes several newspapers, magazines, at least one cable channel, an NFL franchise and a small fleet of private jets.
To be sure, all nine members of the Forbes list have shown extreme generosity over the years, and their names dot the city’s landscape, from the LeFrak Center at New York-Presbyterian Hospital to the Leonard Stern Business School and the Sheldon Solow Library at New York University.
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Steven Roth of Vornado, which just invested $116M in LNR

LNR Property, the commercial real estate company controlled by Cerberus Capital Management, has received a $417 million cash infusion from a group that includes Vornado Realty Trust, iStar Financial, Oaktree Capital Management and Cerberus, the company announced Friday. The new investments helped LNR, which is among the country’s largest servicers of commercial real estate loans, reduce its debt to $425 million from $1.3 billion. Steven Roth’s Vornado now has a 26.2 percent equity interest in LNR, which comes from a $116 million new cash investment, combined with a conversion of its $15 million mezzanine loan into equity, the New York-based REIT said. In a statement, LNR CEO Tom Hughes called the deal a “substantial new investment in LNR by our sponsor and four largest creditors” that will make LNR “well-positioned to capitalize on opportunities in the commercial real estate market.” TRD

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Vornado Realty Trust has submitted a bid to buy CW Financial Services, the parent company of CWCapital Asset Management, the country’s second-largest special servicer of loans on delinquent commercial properties, including Stuyvesant Town and Riverton Houses. The winner of the bid is expected to be announced next week, according to Bloomberg news. The owner of CW Financial’s controlling interest, Canadian pension fund manager Caisse de depot et placement du Quebec, announced in March that it would be selling its shares. The value of Vornado’s bid was not immediately clear. CWCapital is currently the special servicer on $144 billion worth of real estate loans, $18 billion of which is in delinquent loans. [Bloomberg]

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Vornado Realty Trust has submitted a bid to buy CW Financial Services, the parent company of CWCapital Asset Management, the country’s second-largest special servicer of loans on delinquent commercial properties, including Stuyvesant Town and Riverton Houses. The winner of the bid is expected to be announced next week, according to Bloomberg news. The owner of CW Financial’s controlling interest, Canadian pension fund manager Caisse de depot et placement du Quebec, announced in March that it would be selling its shares. The value of Vornado’s bid was not immediately clear. CWCapital is currently the special servicer on $144 billion worth of real estate loans, $18 billion of which is in delinquent loans. [Bloomberg]

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Vornado Realty Trust is “nervously bullish” on the city’s commercial real estate market, Steven Roth, the REIT’s chairman, told CNBC’s Squawk Box today. Roth said that while he believes the market bottom has already passed, and transaction volume is “ticking up a great deal,” he is still keeping some office space in his portfolio off the market until rents recover. Meanwhile, Richard LeFrak of the LeFrak Organization noted that the commercial leasing landscape has morphed over the past decade to accommodate the growth of large hedge funds.

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Madison Square Garden

Madison Square Garden, currently at the beginning stages of an $850 million renovation, would move one block west under a revived proposal by Vornado Realty Trust’s Steven Roth that is gaining traction amongst arena and city officials, the New York Times reported. MSG’s 5,600-square-foot theater is slated to close temporarily at the end of June for the first stage of construction. Roth, who controls much of the area, including 1 Penn Plaza and the Hotel Pennsylvania, reportedly told officials that the renovation would be more expensive and disruptive than building a new arena altogether. Furthermore, he contended, it won’t hold a candle to Brooklyn’s planned Barclays Center for the Nets even when the job is done. Roth’s plans call for MSG to move into the James A. Farley Post Office across the street, which would also become part of an expanded transit hub called Moynihan Station. The current arena would be demolished and rebuilt as a retail mall. [NYT]

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Some of the top 100, from left: Stephen Ross, Marc Holliday, Andrew Mathias, Mort Zuckerman, Dolly Lenz

The New York Observer has released its list of the 100 most powerful people in New York City real estate, with Stephen Ross, chairman of Related Companies, ousting last year’s number one ranked player, President Barack Obama from the top spot. The list is populated with many long-time real estate bigwigs. SL Green honchos Marc Holliday and Andrew Mathias jointly took the second place title, up from last year’s showing at number seven, while Boston Properties CEO Mort Zuckerman stayed in the third place position. [more]

Vornado Realty Trust posted a $200.3 million first-quarter net income, a significant increase over the net income from the same quarter a year earlier, which reached $125.8 million, according to a report from the company released today. The resulting funds from operations reached $1.87 per share to common shareholders. [more]

The city should help modernize its corporate offices by giving developers incentives to replace Park Avenue’s aging towers, Steven Roth, chairman of Vornado Realty Trust, said in his annual letter to investors, which was released yesterday in a regulatory filing. “To keep regenerating New York, why not upzone Park Avenue as an economic incentive to tear down old buildings and replace them with new-builds which may be, say, half again the size,” he said, noting that this strategy has already worked in London. In the letter, Roth, who stepped down as Vornado CEO last year as Michael Fascitelli took the helm, was otherwise optimistic about the direction the market is headed. He said Vornado is keeping many of its vacant New York office spaces off the market in anticipation of rising rents. But while that’s good news in many ways, it also means the best deals in real estate may already be behind us, Roth said. “All the money was made buying securities in the panic,” he wrote, describing the ongoing bidding war over bankrupt General Growth Properties. “Whoever the final acquirer turns out to be, they will be paying a fair, not distressed price.” [WSJ] and [NYO]

Vornado Realty Trust is said to be in talks to buy the landmarked, five-story building at 510 Fifth Avenue, at the corner of 43rd Street, according to the Post. The 61,159-foot property, designed by Skidmore, Owings & Merrill and completed in 1954 for Manufacturers Hanover Trust, now belongs to Tahl-Propp Equities, which purchased it for $22 million in 2000 from Chase. There is a current mortgage of $33 million on the property. Chase still has a small branch in the mezzanine and owns the 145,000 feet of excess air rights there. [Post]