Ruby Schron is not the type of real estate mogul who has racks of shiny suits spilling out of his closet.
Associates of the septuagenarian investor describe him as “the opposite of pretentious” and “anything but glitzy” — a man so careful with his money that he still lives in the same single-family home in Brooklyn where he raised his eight children, even as his fortune has swelled into the hundreds of millions of dollars.
In fact, Schron was floored when he walked into luxury department store Barney’s several years back with David Lichtenstein, CEO of the Lightstone Group. The two were considering buying the building, at 660 Madison Avenue.
“We’re walking through there, and Ruby looked at the price of one of the suits — and he almost died,” recalled Lichtenstein, who has collaborated with Schron on several “nine-figure” deals. “He said, ‘David, I would never pay this much for a suit!’ ”
Schron didn’t buy the building either. But the anecdote speaks to the character of the man who has grown Cammeby’s International Group into a real estate empire. The firm has tens of thousands of apartments across the city, a piece of one of the city’s most iconic skyscrapers (the Woolworth Building) and a roster of assets in 14 states in the residential, office and industrial sectors.
Despite his bulging portfolio, Schron “doesn’t spend a lot of money” in his personal life, said Steve Witkoff, who has partnered with Schron on 12 deals, including the Woolworth Building. “It’s not his thing. He takes the money that he’s got and buys real estate with it. He doesn’t buy stocks, he doesn’t buy fancy vacation homes.
“He is a humble, self-effacing guy who doesn’t ever talk about himself, doesn’t brag, doesn’t extol his own virtues,” said Witkoff. “He just quietly amasses real estate like a lot of the old-line owners.”
It’s that attitude, Witkoff and other associates insist, that accounts for Schron’s reputation in the media as mysterious. Dubbed “one of the city’s most secretive landlords” by the New York Observer, Schron actively ducks the spotlight and is never available for interviews. (In keeping with that reputation, Schron declined to be interviewed for this article.)
Even so, it’s been hard not to notice the latest activities of the low-profile mogul.
Hard to ignore
Schron is currently pushing to win city approval for a controversial 25-story hotel and residential complex on Chrystie Street on the Lower East Side. It’s one of the last undeveloped properties in the Cooper Square Urban Renewal Area (the 11 blocks between Bowery, Second Avenue, Stanton and East Fourth streets) and one that some residents believe is out of context with the neighborhood.
In order to gain community board approval, Schron agreed in September to extend rent regulations by 20 years at 10 Stanton Street, a building he owns next door to the site. Still, the owners of the nearby Sperone Westwater Gallery have now hired an environmental lawyer to fight the project, according to the Wall Street Journal.
Meanwhile, Schron and partner Abraham Fruchthandler are in the process of renovating and rebranding a 6.5 million-square-foot, 16-building complex in Sunset Park now known as Industry City. Schron also owns and is actively leasing a portfolio of 3.5 million square feet of industrial properties scattered across Long Island.
But the deal that has earned Schron more headlines than any other took place this summer, when he and Witkoff inked a $68 million deal to sell the top 30 floors of the Woolworth Building. The buyer, an investment group led by developer Alchemy Properties, plans to transform the space into 40 luxury condos.
Witkoff and Schron — who bought the building in 1998 for $137.5 million — will continue to own and lease the bottom 28 floors as offices.
In light of that deal, Forbes editor Luisa Kroll told The Real Deal this fall that Schron would likely be the next New York City real estate mogul to crack Forbes’s list of the 400 richest Americans. (The cutoff to make the list this year was $1.2 billion, and Kroll said Forbes pegged Schron’s net worth at around $900 million after the Woolworth deal.)
But Schron’s upside from the Woolworth deal is dwarfed by another recent victory, which has little to do with real estate (and which Kroll said Forbes had not even considered when estimating his wealth).
In September, a New York State Supreme Court ruled that Schron has the right to take control of a nursing home company called SavaSeniorCare that operates more than 183 facilities in 27 states, with annual revenues that have been estimated at upwards of $1.4 billion.
A quiet life
A devout orthodox Jew who reportedly has eight children and some 50 grandchildren, Schron started out in real estate on the Lower East Side in the years after World War II, according to the Wall Street Journal.
Reportedly, after one of his brothers died of war-related injuries, the family used a $5,000 government payment to buy a small apartment building on Delancey Street.
The first sizable properties Schron himself purchased were a “building or two in the Bronx,” Lichtenstein said. “He managed and was careful and he took care of his tenants and refinanced the buildings, and it was inch by inch.”
Schron founded Cammeby’s in 1967. By 2007, he was managing real estate assets of about $1 billion on behalf of himself and investment groups and partnerships. A list of transactions from just the past eight years provided by the real estate research firm Real Capital Analytics runs to some 10 pages with close to 200 transactions (including sales, purchases and refinancings).
Mark Kronman, a former real estate attorney who first met Schron in the 1980s and later invested with him, said Schron’s success is not dumb luck.
“He’s smart and he always had a lot of partners,” Kronman said. “He did not get big overnight. He worked hard and he understood the market. Lenders trust him. Investors trust him. He’s nice to do business with.”
According to Lichtenstein, Schron, is “the type of person who when you meet him, you think, ‘That is what it was like in the olden times.’ He drives a simple car. He doesn’t have a secretary with an English accent. He’s the kind of guy you would like to have as a father-in-law.”
Yet despite his unassuming demeanor, Schron has done plenty of big deals in recent years.
In 2003, an investment group led by Schron paid $600 million for a portfolio of about 6,000 outer-borough apartments from the family of Donald Trump.
He has also, over the decades, acquired a huge portfolio of Mitchell-Lama apartment buildings, which have exploded in value as the government affordable housing program has ended and the rents have reverted to market rates. In 2007, he sold almost 4,000 units of former Mitchell-Lama properties in five separate complexes scattered across Harlem and Roosevelt Island for $940 million in what was then the second-largest residential portfolio sale in Manhattan history. The buyers were residential landlord Urban American Management and its private equity partner, City Investment Fund.
More recently, in 2011, Schron sold the Lionel Hampton Houses in Harlem to real estate investor Israel Weinberger for $32.5 million.
Schron has also hit his share of speed bumps — some in recent months. Since April, at least 19 properties he’s affiliated with have been foreclosed on in Minnesota, Colorado, Michigan, Arizona, North Carolina, Georgia and elsewhere, according to RCA. However, a source said that Schron has only a small, noncontrolling minority stake in those projects, which are all part of one commercial mortgage-backed securities pool, and that the decision to walk away rather than refinance was made by the majority owners.
In New York, Schron appears to have been able to hold onto most of his apartments through the recession, refinancing at least 26 properties in the tri-state area since 2010 — including his Long Island industrial properties and Industry City.
A “toilet paper” agreement
In the 1980s, Schron began working with an attorney named Leonard Grunstein, who soon became a trusted real estate advisor. The two spoke almost every day and were close enough that Grunstein attended the weddings of some of Schron’s children, according to a lawsuit Schron later filed against Grunstein.
Starting in 2002, Grunstein convinced Schron to buy two large nursing home and health-care businesses.
The companies consisted of sprawling empires spread out across more than two dozen states. Schron saw an opportunity in the real estate, but had little interest in getting into the nursing home business.
He agreed to a plan that would split the companies into two new entities, one of which would hold the real estate and the other of which would hold the nursing homes.
According to the plan, Schron and his investors would own the property company and collect lease payments from the nursing home properties, which would be run by Grunstein and a banker named Murray Foreman.
Schron raised almost $1.4 billion to finance the transactions and ended up with a company that had more than 18,000 patients. After splitting off the real estate assets, he was soon collecting tens of millions of dollars in lease payments from the nursing homes each year.
The partnership soon soured, however. As part of the deal, Schron reportedly believed he had the ability to raise rents if interest rates rose and his financing costs spiked. But in 2007 when he told Grunstein he needed to do so, Grunstein said that he did not have the right, according to court documents.
Then in 2009, the Department of Justice filed a complaint accusing Schron, Forman, Grunstein and a number of others of arranging a $50 million kickback — in violation of Medicare laws — from a company that wanted to continue providing pharmacy services to the nursing homes. Eventually, Schron and his fellow defendants settled the complaint for $14 million, without admitting wrongdoing.
In the wake of that lawsuit, Schron attempted to buy Grunstein and his partners out of SavaSeniorCare, the nursing home business — a right he thought he could exercise for $100 million as part of the initial agreement. A bitter two-year court battle ensued. According to the litigation that soon followed, Grunstein told Schron that he could use the agreement as “toilet paper,” and that if the dispute went into litigation, he would make sure the company was worthless over time.
In court documents, Schron claimed Grunstein routinely “shouted at, cursed and threatened Schron.”
According to court transcripts, Grunstein’s lawyer, who estimated the company’s revenue at $1.4 billion in 2010, complained that Schron “got even richer off this transaction — $92 million in rent a year since 2004. This man hit a geyser. For him to come in and complain about Mr. Grunstein or Mr. Forman is simply an outrage.”
Attorneys for Grunstein did not return calls seeking comment.
Finally this fall, a judge ruled that Schron did indeed have the right to acquire the properties.
If Grunstein is unsuccessful in convincing an appellate court to grant an emergency stay, the deal could close as early as the first quarter of next year — and would make Schron, the real estate investor from Brooklyn, one of the largest nursing home operators in the nation.
But he won’t be buying expensive suits anytime soon.