Not too long ago, New York City real estate was defined by the likes of the Astors and the Rockefellers. Not so anymore. While those original real estate families — from European countries like Germany and France — have made their lasting mark on the city, today’s big players are just as likely to be Jewish immigrants from Syria or Iran, or hotel developers from Taiwan or India, as they are to be from old-money European families.
And while it’s impossible to broad-brush these groups because all real estate players (regardless of where they’re from) make business decisions that lead them in different directions on a daily basis, there are still some discernible fiefdoms.
This month, The Real Deal looked at some of the groups (whether linked by their heritage or by some other factor) that share a common thread when it comes to going after the same kinds of properties.
The groups we identified are just the latest in the ever-evolving universe of New York City real estate players.
Two hundred years ago, German-born immigrant John Jacob Astor began buying up Manhattan land, using profits from his international fur trade. He was followed by descendants of Philip Jacob Rhinelander, also a German, who built the Rhinelander Mansion on Madison Avenue and amassed a portfolio second only to Astor’s. There were also other, smaller German investors, such as the Steinway family, which bought 400 acres in Astoria in the 19th century.
Like those who came before them, many of today’s real estate investors, even those whose families have been here for more than a generation, still self-identify with their country of origin and have carved out special real estate niches.
What follows is an unscientific look at how immigration patterns and economic cycles have led certain groups to focus on certain asset classes.
Colloquially known as the “SYs,” the Syrian Jewish community anchored along Ocean Parkway in central Brooklyn is most known in real estate circles for its strong affinity for retail, owning significant properties in Soho and along 34th Street and Fifth Avenue.
“We were retailers before we went into real estate,” said Joe Nakash, whose company Jordache Enterprises owns pieces of dozens of retail properties in the city as well as major commercial holdings in the United States and Israel.
Indeed, some say that the SYs “never look beyond the first or second floor of a building [when they're shopping for a property], because that is where the retail is,” said investment sales broker David Schechtman, a principal at Eastern Consolidated.
Nakash, whose parents were from Syria, was born in Israel and moved to New York in 1962. In the 1970s, he and his brothers started chains such as VIM Jeans in Brooklyn, and then began buying the properties the stores were located in.
“We were in the best locations,” he said, pointing to 34th Street in Midtown and Fordham Road in the Bronx. “Some of the buildings we occupied, we bought. And we continued to buy retail locations, not only for our retail use, but [to lease out].”
While the SYs also invest in a broad spectrum of other real estate assets, their retail roots can be traced back to their arrival in New York in the early 20th century.
Like the Nakash brothers, a number of Syrian Jews founded retail businesses in the decades after World War II. They followed the same pattern of buying the buildings that housed those stores, and then ultimately diversifying into the more lucrative real estate world.
For example, Joseph Sitt of Thor Equities, best known for his plans to redevelop Coney Island, founded the plus-size clothing store Ashley Stewart, which has 16 stores in the city and more than 100 nationwide. Meanwhile, Stanley Chera of Crown Acquisitions, whose portfolio includes investments in retail portions of 666 Fifth Avenue and the St. Regis Hotel, formerly operated children’s retailer Young World. And the influential but quiet Gindi family, which now owns substantial interests in properties including 490 Fulton Street in Downtown Brooklyn (acquired in partnership with the Cheras), founded popular discount retailer Century 21.
In addition, Joseph Cayre, chairman of Midtown Equities, owns interests in dozens of retail properties, including stores on Fifth Avenue and in the outer boroughs. He’s also a co-owner of the residential brokerage Core. Other members of the Syrian community entered the real estate industry through brokerage, such as Jeff Sutton, one of the city’s major retail investors.
Some caution that not all those who are part of the social and religious network of the SY community have families that are actually from Syria. Some are from Egypt or Israel, but are now de facto members of the community.
Owning a modest-size apartment building is a bit like running a shop in a bustling Middle Eastern shopping district, said Thomas Elghanayan, chairman of the real estate firm TF Cornerstone. And some property owners like that.
Several of the Persian Jewish families that rose to prominence in residential real estate in the 1970s — such as the Elghanayans, the Kalimians and Manocherians — started by rehabilitating smaller structures. “It is an easy little business with a low entry cost, and it sort of has some of the characteristics of the bazaar,” he said.
The group of emigrants from Iran was also a tight community, and remains so today. Elghanayan’s father, a leading Iranian businessman, emigrated to the United States in 1949, later bringing his family from Tehran to New York City. And he was close to a number of other Persians here, including Manouchehr Manocherian, whose family founded Pan Am Equities.
While there are plenty of Persian real estate investors in New York that focus on other sectors of the market (Tamir Sapir, for one, on the office side), a collection of them have zeroed in on owning and developing residential rentals and condos. The Elghanayans, who started Rockrose and TF Cornerstone, and the Manocherians with Pan Am Equities (both among the first wave of immigrants), are just two influential families.
“The Manocherians and the Kalimians sort of specialized in the Upper East Side, on First Avenue and Second Avenue tenement houses. And we were all over the place — the West Side, down in the Village,” said Elghanayan, whose firm has about 8 million square feet of property, including 4,500 apartments.
The second major influx of Iranians followed the 1979 Islamic revolution, when a large number of citizens, including many Jews, fled and settled in New York and California.
The more recent arrivals concentrated in the Great Neck enclave of Kings Point, with many entering the clothing manufacturing business in Midtown, commonly referred to by its Yiddish nickname, “the schmatta business.” Whether from that industry or other businesses, including rug merchandising, several families entered real estate.
David Zar, a partner with landlord Zar Property, whose family hails from Mashhad in northern Iran, said Persians tend to focus on properties that need to be fixed up or transformed. “Anything value-added,” he said.
Indeed, Joseph Moinian, who founded the Moinian Group in 1980, is one of the city’s prominent Persian converters of offices to residential properties.
Another major developer with Iranian roots is the Hakimian Organization, founded by brothers Ben and Joe Hakimian. The firm built residential properties such as the condo Club at Turtle Bay on East 47th Street and the conversion of the former office tower at 75 Wall Street to residential use.
And, there’s Kamran Hakim, who is said to own more than $1 billion of New York real estate.
While Israelis have been buying property in New York City for years, there’s a small cadre of the most prominent players who have focused on residential acquisitions and development.
The boldfaced names include Manhattan multifamily veteran Ofer Yardeni, a managing partner with Stonehenge Partners, which owns 19 properties with 2,700 units, and Miki Naftali, CEO of El Ad Group, which developed the Plaza Hotel.
Other high-profile members of the residential development and acquisition community include Yair Levy of YL Development, which invested in troubled conversions like Park Columbus, and Shaya Boymelgreen, who was a partner on the development of the former Financial District office tower 20 Pine Street into luxury condos.
Meanwhile, Lev Leviev, a diamond trader and billionaire who controls development firm Africa-Israel, was born in Uzbekistan when it was part of the Soviet Union, but moved to Israel in 1971 at the age of 15. He was a major purchaser of residential properties in the city during the boom, acquiring former office buildings the Clock Tower at Madison Square Park and, in partnership with Boymelgreen, 20 Pine Street. Africa-Israel also bought the Apthorp on the Upper West Side.
Starting out as building superintendents, some of today’s major Albanian landlords took over rental apartments in the 1970s in the dark days of the Bronx, said Henry Djonbalaj, a broker and property owner whose father arrived in 1970 from Montenegro, in what was then Yugoslavia.
Djonbalaj said the weak economy and the opening of Co-op City in the Bronx in 1973 hurt the value of apartment buildings. That prompted many landlords to give the buildings to the supers for just $5,000 to $20,000 more than the mortgage, brokers said.
The first wave of ethnic Albanians from Montenegro arrived in the 1960s, while a second group came in the late 1980s as ethnic Albanians were persecuted in Kosovo.
Members of the Albanian community have amassed hundreds of properties in recent decades, owning by some estimates a third of the apartment buildings in the Bronx. And many raise money, which is often used to fund acquisitions, from within the tight community.
Even today, Albanians still keep a sharp eye on available properties.
“In the Bronx, like on Pelham Parkway, most of the buildings, if they come on the market, [the Albanians] are the first to buy it,” said Djonbalaj, who owns several properties in the Bronx and Westchester.
Some of the prominent Albanian owners include Douglas Celaj, Deda Gjonaj and Anthony Gazivoda, many with hundreds of apartment units in their portfolios.
Marco Lala, an investment broker with Marcus & Milli-chap, said his father, who owned a seven-unit property in the Bronx, escaped from communist Albania, and felt obliged to help others buy buildings.
Lala tells the story that his father heard about an Albanian super who was sent to jail after killing an intruder. Once he was released, he could not find a job.
“My father thought this was preposterous,” Lala said. “He led a group to raise about $40,000 so that this guy could actually buy his own building and give himself a job!”
One prominent real estate attorney, who asked not to be named due to the sensitive nature of ethnic ownership, said Albanians followed a well-worn pattern of buying property in less expensive areas when they were still new to the country.
“The longer that the group’s been in town, the better [the] areas [that] they are going to buy in. That is rule number one,” the lawyer said.
While Orthodox Jewish investors have made their mark on all sectors of New York real estate, a number have concentrated on rent-regulated, outer-borough apartments.
For example, David Bistricer of Clipper Equity and Berkshire Capital owns Flatbush Gardens in Brooklyn (and recently acquired the high-profile 752 West End Avenue in Manhattan). He also had a failed bid in 2007 to acquire Starrett City in Brooklyn for $1.3 billion.
Other prominent Orthodox players include Baruch Singer, a landlord and developer with dozens of properties; Rubin Schron, who owns thousands of apartment units in Brooklyn, Queens and Staten Island, some purchased from Donald Trump’s family; Moshe Piller, with large holdings in Brooklyn; and Irving Langer, who recently partnered to buy an interest in a portfolio of Bronx properties owned by CBRE chairman of global brokerage Stephen Siegel’s SG2 Properties.
Indians are known for owning and operating hotels all over the country. Although the New York market is considered more competitive than the rest of the nation, a high concentration of Indians own hotels here as well.
Indeed, one of the biggest hotel owners in the city, Hersha Hospitality Trust, was founded by an immigrant from India, Hasu Shah. Although he lives in Pennsylvania, his company owns 18 hotels in New York and the surrounding suburbs, including many midmarket brands such as Holiday Inn Express and Hampton Inn.
Like many other ethnic groups, a number of these investors fled to escape violence. In this case, those with roots in the western state of Gujarat in India had moved to the African nation of Uganda. But they then fled that country after the brutal dictator Idi Amin took over in 1972. Many came to the United States in the 1980s and entered the hospitality industry.
Vijay Dandapani, president and COO of Apple Core Hotels, a chain of five hotels in Manhattan, said many Indians arrived with only the cash they could put together quickly.
“They started small hotels,” said Dandapani, who did not follow that pattern. (He grew up in southern India before moving to the U.S. as a student.)
Some other prominent ethnic Indians in New York broke the mold, too. For instance, Vikram Chatwal, a Sikh whose family is originally from the Indian state of Punjab, owns hotels in Midtown. His father Sant Chatwal’s firm, Hampshire Hotels & Resorts, owns properties such as the 369-room Hilton Garden Inn Times Square.
Asians (Far East)
The highest-profile Asian hotel owner and developer in New York City is Sam Chang, whose company the McSam Hotel Group has built more than 50 midmarket hotels since the 1990s in the city and has seven more underway.
While the Taiwan-born Chang has been slowed by the downturn, he has already made a huge impact on the city’s hotel sector. Chang first saw the hospitality business up close when he was a teenager living in Los Angeles and his mother bought a small motel.
“I helped her run the motel. And after that I just fell in love with the business. It is all I have done from 17 to now,” he said.
Chang is the largest of several Asian-born hotel owners and developers making a mark on New York hospitality. Others include Chang’s former partner John Lam of the Lam Group, who owns hotels such as the Four Points by Sheraton Manhattan Chelsea at 160 West 25th Street.
Before working in hospitality, Lam owned a factory in the Garment District. But with manufacturing drying up in Manhattan, he turned to real estate, and opened his first hotel in 2003.
Architect Peter Poon, who has worked with Asian developers including Lam, said Asians often focus on service sectors in the U.S., including hotels.
Other Asians involved in hospitality include contractor James Wu, who has also partnered with Chang; and Sam Suzuki, whose parents are from Japan, who did hotel assemblages in the early part of the last decade. There are also other less-known developers, such as the Lou family from Staten Island, which owns the Wingate Inn at 235 West 35th Street and a Courtyard by Marriott on Varick Street.
While Chang acknowledged that there are a number of Indian hotel developers in New York, he said he doesn’t think there are enough East Asian hotel developers to constitute a solid group.
The first generation of many of today’s leading New York City real estate families arrived from Russia, pushed out in the late 19th and early 20th centuries by the anti-Semitic pogroms.
The Jewish immigrants arriving in New York at that time included the Tishmans, Rudins, Roses, Milsteins, Dursts and Urises. They became formative builders transforming Manhattan’s neighborhoods with both high-rise offices and residential towers. Tishman Construction started with multifamily apartment buildings on the Lower East Side. In 1947, it completed 445 Park Avenue, the first office building on Park Avenue north of Grand Central Terminal. The Uris brothers — Harold and Percy — built 18 properties with more than 13 million square feet of office space in Manhattan between the end of World War II and 1971, including 1290 Sixth Avenue and 55 Water Street.
Meanwhile, Morris Milstein came from Russia and founded Circle Floor, which installed flooring. His sons Paul and Seymour used the profits from that firm to build a real estate empire, constructing apartment buildings on the Upper East Side, such as Normandie Court and Windsor Court, and in Battery Park City, such as the Liberty buildings.
And Louis Rudinsky, the first generation of the Rudin family, left Poland to settle on the Lower East Side in 1883. His son Samuel founded Rudin Management in 1924, and the firm began putting up apartment buildings. In 1955, the firm built the first of many office towers, at 415 Madison Avenue. Today, their portfolio includes more than 30 commercial and residential buildings in Manhattan.
Finally, Joseph Durst arrived from Austria in 1902, and started in the garment business. During the Depression he bought leases and defaulted mortgages on the East Side; then, in the 1950s, his company built five office buildings on Third Avenue.
Prominent African American celebrities, including Magic Johnson, Mo Vaughn, Emmitt Smith and Jay-Z, have made major investments in real estate in New York City, mostly in emerging neighborhoods, and some with a philanthropic element to their developments.
Johnson, through Canyon-Johnson Urban Funds — a partnership between his Magic Johnson Enterprises and Canyon Capital Realty Advisors — has invested in projects such as the 39-unit 20 Henry Street in Brooklyn Heights and the 63-unit Isabella at 545 Washington Avenue in Clinton Hill. While the funds don’t claim to be philanthropic, Johnson’s website says its strategy includes “fostering opportunities for residents and consumers in urban communities.” Johnson’s investments in the city go back more than a decade. In 2000, he opened Harlem’s first multiplex theater as part of the $66 million Harlem USA development on 125th Street.
Meanwhile, former Mets ballplayer Vaughn, in partnership with co-managing director Eugene Schneur, formed Omni New York in 2004. The company was an active buyer of multifamily apartment buildings last year, making significant acquisitions, including a 14-building portfolio with 416 units in the South Bronx in which it plans to invest an additional $35 million to improve the apartments. It also bought two other Bronx buildings with a combined 524 units of rent-regulated properties in December. Unlike some other purchasers of distressed buildings, Omni uses tax-exempt bonds and proceeds from housing tax credits to finance its deals, and plans to keep the units affordable.
On the hotel front, Smith, a former running back with the Dallas Cowboys and a developer who has multiple projects in Texas with his ESmith Legacy, is building an $81 million Hyatt Place hotel and retail project in Harlem at 125th Street and Lenox Avenue. And, rapper and entrepreneur Jay-Z was a partner in a project to develop a Chelsea site at 511 West 21st Street, although last year the property was turned over to lenders. Jay-Z also had been an investor in Aqueduct Entertainment Group, which initially won a bid to redevelop the Aqueduct “racino,” the casino at the Aqueduct Racetrack in Queens. But in early 2010 the controversial deal was canceled, and in March he withdrew his 2 percent investment from the company.