Stuart ElliottBy now, it seems like most New Yorkers in the business world have read Walter Isaacson’s biography of the late Apple founder Steve Jobs or know someone who is reading it. I just finished it up.
Jobs was a mercurial genius, and also, frankly, could be an ass. Notorious for thinking the rules didn’t apply to him, he would park in handicap spots at the company’s headquarters. Most ideas presented to him at Apple got a standard reaction from him: “It’s shit.”
But with the Macintosh computer, and later the iPod, iPhone and iPad, Jobs revolutionized personal computing, as well as the music, phone, tablet computing and digital publishing industries. He also made significant innovations in the world of retail real estate.
The big debate that has emanated from the biography is: could Jobs have been as successful without being such a jerk?
Whether radical innovation goes hand-in-hand with ruffling feathers is an important question, and it’s as pertinent for the real estate industry as it is for the technology sector.
One contentious player who is looking to revolutionize commercial real estate is Howard Lutnick, who we write about in this issue. Check out the story, “Lutnick’s big hedge,” by reporter Adam Pincus.
Lutnick announced last month that his firm BGC Partners — a spin-off of Cantor Fitzgerald —would buy distressed brokerage Grubb & Ellis, four months after closing on a deal to buy brokerage Newmark Knight Frank. Lutnick recently boasted on Bloomberg Television that he hoped to eventually capture “25 percent of the [commercial real estate] market share.”
But it’s a plan to create a property derivatives market that could change the industry. Property derivatives are something of a holy grail in the commercial real estate world, enabling tenants and landlords to hedge against swings in rent.
There are many skeptics who doubt whether such a market can thrive, but Lutnick has proved in the past that he can come up with innovative new financial products. Following Sept. 11, which famously devastated Cantor — three out of every four people who worked in New York for Lutnick that day died, 658 people in all, including his brother Gary — he rebuilt a shattered bond brokerage into an electronic trading powerhouse. In doing so, he revolutionized the bond business by replacing human brokers with computers.
He’s also expanded his firm into credit derivatives, future trading, running sports-betting operations and other ventures.
A ruthless competitor who has made many enemies, Lutnick has, at the same time, been reviled for cutting off paychecks to the families of his employees just four days after the Sept. 11 attacks.
And he’s been involved in brutal battles for control of his company. As his mentor, Bernie Cantor, lay dying in the mid-1990s, Lutnick reportedly fought with Cantor’s wife, Iris, over control of the company and was accused of moving to get his former boss declared incapacitated. He was later barred from the funeral, according to a profile in the New York Times.
But — and maybe this is a key for innovators — Lutnick has kept his eyes on the long-term prize, despite the collateral damage, including to those he cared about. (At the time he cut pay following Sept. 11, for example, he promised Cantor would give employees’ families 25 percent of its profits over the next five years, a pledge he carried out, with many spouses later saying Lutnick did right by them.)
With such a rough-and-tumble history, Lutnick may be well poised for his foray into a real estate derivatives market. It pays to think big, or as the famous Apple campaign said, “Think Different.”
Of course, every temperamental visionary needs a right-hand man or woman to help them execute their ideas — think of the unflappable Apple CEO Tim Cook to Steve Jobs.
In our main cover story this month, “Power behind the throne,” we look at the key players behind the throne at some of the biggest real estate companies in the city. From Bob Sanna at Forest City Ratner to Dov Hertz at Extell, these are name you might not know —but if you consider yourself a real estate insider — you should.