The Real Deal New York

Meet Michael Shvo’s Turkish business partner, Serdar Bilgili

His firm BLG Capital has invested in a flurry of deals with SHVO
By David Jeans | September 07, 2018 07:00AM

Serdar Biligili and Michael Shvo (Credit: Facebook and Getty Images)

During a 2007 lecture to members of Hilton Hotels and Resorts’ advisory board, Michael Shvo, then a New York real estate megabroker, declared that the real estate market was about to collapse, due to an excess market without “sanity and logic.” The proclamations raised a few eyebrows, but one person in the room, Serdar Bilgili, the owner of a Turkish real estate private equity firm, was intrigued and reached out to Shvo to meet for lunch.

A decade later, Bilgili has gained a small foothold in the New York market by partnering with Shvo and his company SHVO on a string of luxury developments in the city. Last month, Biligili’s Istanbul-based firm BLG Capital announced a joint venture with Shvo in the “Gucci Building” at 685 Fifth Avenue. The deal involves two major German funds and Deutsche Finance Group, to secure 100,000 square feet of office space at the property long-sought by Shvo.

With Bayerische Versorgungskammer (BVK), the country’s largest manager of public pension funds and Versicherungskammer Bayern Group (VKB), the largest public insurer in Germany, the firms raised $155 million for the deal, including $135 million for the purchase of the space and $20 million in equity. They plan to add five stories to the building and with construction to start at the end of the year.

“Serdar has invested in most of my developments in New York,” Shvo said. “You can see there’s a lot of similarities to what we do, in the world of developing unique product.”

Shvo, who frequently refers to Bilgili as his “best friend,” (Bilgili introduced Shvo to his wife, Shvo introduced Bilgili to the mother of his child) said the pair are working on two additional deals together. He declined to state how much equity the partners had in their various New York projects.

Though teaming up with Shvo has given Bilgili an entry to the New York market, he also has a development track record of his own in Turkey.

Bilgili, a 55-year-old Istanbul native, owns one of the largest private equity real estate firms in Turkey, Bilgili Holdings, the parent company to BLG Capital. In the early 2000s, he gained notoriety as the president of one of Turkey’s most popular soccer teams, Beşiktaş Jimnastik Kulübü. Since then, Bilgili has become a major real estate developer in Turkey and brought international hotel brands to Istanbul, including the W Hotel, Radisson Blu and Soho House.

Recent turmoil in Turkey, including terrorist attacks and an increasingly autocratic leader, has placed immense pressure on the country’s economy and tourist trade. To build hype around a luxury development and to serve as a tourist attraction in Istanbul’s Nişantaşı neighborhood, an artist district, Bilgili erected a 200 foot high outdoor photography exhibit on the sides of the scaffolding, depicting portraits of artists and locals in the area.

“Turkey needs this right now,” Bilgili told the Economist in September 2017. “In Turkey right now, except for the Eastern part of Turkey, the Syrian border, or the eastern border, there is nowhere that’s problematic.” In addition to the tower, his firm is also developing a mile-long stretch of waterfront on Istanbul’s Bosphorus Strait for tourists and shoppers.

It’s unclear how much exposure Bilgili has if there is a significant downturn in Turkey’s real estate market. He declined to comment for this article.

By partnering with Shvo, the Turkish investor has bought into some of New York’s flashiest projects, including the conversion of the Crown building at 730 Fifth Avenue,  the Getty at 239 10th Avenue and 125 Greenwich Street (though Shvo has been sidelined at 125 Greenwich).  The Getty in particular has done well on the sales front — private equity baron Robert F. Smith scooped up the triplex penthouse for $59 million, a record in downtown.

Shvo said his partnership with Bilgili will continue. “He’s investing in New York, with me. It’s a relationship thing.”