UPDATED, April 19, 3:00 p.m: Stanley I. Chera, who parlayed his father’s Brooklyn department store business into one of New York real estate’s biggest retail empires, reaped huge rewards from the city’s emergence as a global shopping destination and used his wealth and connections to play kingmaker for Donald Trump, has died from complications of the coronavirus, making him the most high-profile industry casualty of the global pandemic. He was 77.
Chera’s death on April 11 was confirmed to The Real Deal by sources who have worked closely with the firm he founded and ran, Crown Acquisitions.
Haim Chera, Stanley’s middle son and head of retail at Vornado Realty Trust, said his father was a “giant-hearted champion of the underprivileged and needy.”
“Compassion for all as equals,” he wrote in a text message to TRD Monday. “Captain of the team for the correct and just, not the popular.”
As the pandemic spread rapidly in New York, Trump had advised Chera to leave the city and decamp to his summer home near Deal, N.J., a popular vacation-home destination for many moguls hailing from Chera’s Syrian Jewish community, which dominates New York retail. Chera took his advice but fell ill anyway, and was admitted to New York Presbyterian/Weill Cornell Medical Center in late March. According to a source familiar with events, Chera’s wife, Frieda (Cookie) also contracted the virus, but recovered.
Chera’s savvy and willingness to chase big-ticket deals elevated him and Crown into the city’s retail pantheon, among the likes of Jeff Sutton of Wharton Properties, Joseph Sitt of Thor Equities and Bobby Cayre of Aurora Capital Associates. Crown holds interests in the most retail frontage along Upper Fifth Avenue, perennially among the world’s priciest shopping corridors. Those positions meant Crown benefited handsomely from New York’s retail boom in the mid 2010s, but is perhaps now among the firms most exposed to the city’s retail downturn.
Crown’s day-to-day operations are run by two of Chera’s sons, Isaac (Ike) and Richard Chera. Haim (Haimey) moved over to Vornado when Crown bought a 24 percent stake in the real estate investment trust’s prime Manhattan retail portfolio, a megadeal that valued the portfolio at $5.6 billion. Crown also has a brokerage arm, Crown Retail Services, which negotiated Apple’s first Brooklyn store, in Williamsburg.
According to data from real estate news and research site PincusCo, Crown’s Upper Fifth assets include at least nine properties with 635 feet of frontage, such as 640 Fifth Avenue, 655 Fifth Avenue, 689 Fifth Avenue and 697-703 Fifth Avenue.
The firm also has interests in the World Trade Center complex, the Olympic Tower on Fifth Avenue and the retail at 650 Madison Avenue. Some of Crown’s tenants include global luxury brands such as Cartier and Versace, but the firm also owns more modest properties in blue-collar neighborhoods of Brooklyn, Queens, the Bronx and Staten Island leased to the likes of Duane Reade, Sprint and Planet Fitness.
“Stanley loved the chase,” Steve Witkoff, a prominent New York real estate investor and developer, said in an interview Saturday. “He knew what the trend lines looked like before anybody else. It’s not dissimilar from being a great hedge fund manager — someone who can see through a particular environment, a particular marketplace, and see how a customer is going to buy.”
“The secret is to stay underleveraged and you can own something forever,” Chera told the New York Times in 2010. “I have 100 pieces of property, say, but I could have 1,000 leveraged.”
The store, the block, and then the neighborhood
Born in Brooklyn in 1942, Chera went to work with his father, Isaac Sr., who owned a children’s department store on Fulton Street in Downtown Brooklyn. Isaac, who took over the space from a hat store named Suzette Millinery Shop, didn’t have the funds to replace the banner, according to the Commercial Observer, so he merely tweaked it and called his business Suzette Kiddie Store. Only after expanding the business across several stores did the family change the name to Young World.
In the Times interview — among the few that the gregarious but press-shy Chera gave in his career — he explained how the family’s emphasis shifted from operating retail to owning it.
“I was paying $2,000 a month rent and I was doing business up to the sky,” Chera recalled. “I said, ‘What am I doing?’ The building next door came up for sale, so I purchased it and started accumulating properties in the city.”
The world of high-stakes Manhattan property, where the competition, risk and rewards are all outsized, beckoned. When Chera entered that scene in the mid-1980s, he was typically a junior partner to players such as Morris Bailey or the Feil Organization.
Chera, Bailey and developer Martin Raynes were involved in perhaps one of the city’s hairiest real estate transactions when they struck a deal to buy four properties from the government of the Philippines, then led by the extravagant and corrupt Ferdinand Marcos, for $396 million. The acquisition was structured as a commitment to bid on each property if and when they went up for auction. The portfolio included the two trophies — the Crown Building at 730 Fifth Avenue and a Lower Manhattan office skyscraper at 40 Wall Street — as well as the ugly duckling Herald Center and an office and retail building at 200 Madison Avenue.
But the deal was embroiled in years of litigation that elicited a global cast of characters, including Saudi arms dealer Adnan Khashoggi, representatives of the Philippines government that ousted Marcos in 1986, and brothers Joseph and Ralph Bernstein, allegedly frontmen for Marcos.
“Every time you think you get to the last nuance, someone calls and says, ‘You’ll never believe what happened,’” attorney Jonathan Mechanic of Fried, Frank, Harris, Shriver and Jacobson, who was representing Chera and his partners, told the Times about the saga in 1989. (When the dust cleared, Bernard Spitzer would end up acquiring the Crown Building in a bankruptcy sale, while Bailey and his group took control of Herald Center.)
A quarter-century later, Chera would make another run at the Crown Building but lose out to Sutton’s record-setting $1.7 billion bid in partnership with General Growth Properties. The leasehold for 40 Wall would bounce around among several owners before being snapped up in 1995 by one Donald Trump.
Taking the Fifth
By the turn of the century, Chera’s appetite and access to capital had grown substantially. In 2001 he teamed up with Lloyd Goldman, head of BLDG Management and the nephew of his mentor Sol Goldman, to make a play for a piece of the real-estate portfolio of insurance giant MetLife.
“The deal was, ‘I buy the buildings and Stanley buys lunch,’” Lloyd said in a tribute video created for Chera when he was the honoree at the American Friends of Rabin Medical Center’s 2014 gala.
At the time, MetLife’s portfolio included Stuyvesant Town, the most coveted multifamily asset in New York. The partners learned that MetLife’s then-chairman Robert Benmosche was partial to Prime, a Midtown kosher steakhouse, according to “Other People’s Money,” Charles Bagli’s book about Stuy Town. They got a table near Benmosche and struck up a conversation. Though the MetLife boss passed on the offer, a year later the duo bought two MetLife properties: the Fred French Building at 551 Fifth Avenue and the Otis Building in Chicago.
In 2008, Crown partnered with the Carlyle Group in a $525 million deal to acquire and reposition the retail at Kushner Companies’ 666 Fifth Avenue. (The skyscraper was Jared Kushner’s entree to the high-stakes world of New York real estate and would later become his albatross.)
“When you buy a building on Fifth Avenue, the first or second phone call you’re probably going to get is from Stanley,” Jared said in the tribute video.
Over four years, the partners transformed it into two commercial condominium units they then sold for more than $1 billion to Vornado and Zara parent company Inditex. Although Crown had owned only a small equity stake, insiders credited it with being a driving force behind the deal, bringing in the main capital partner Carlyle and anchor tenant Uniqlo. It walked away with between $25 million and $50 million in profit in the form of a “promote” as well as brokerage and other fees.
Chera teamed up with Joseph Chetrit on a 2009 bid to buy Filene’s Basement out of bankruptcy. They lost out to Syms — which itself filed for bankruptcy in 2011.
In 2012, Chera, Feil, Goldman and other partners sold the retail at the St. Regis Hotel at 2 East 55th Street for $380.6 million, just three years after buying it for $117 million. In 2014, Crown would take on the property again, teaming up with Vornado to buy it for $700 million.
Sources active in the market said what set the likes of Chera and Sutton apart was their ability to scout a promising property, get an option on it at a reasonable price, find high-flying tenants willing to cough up top-dollar rents to occupy it, and then quickly line up the financing to buy the building and lock in the tenants.
Those familiar with Crown’s operations likened Chera’s role in later years as being akin to a counselor, advising his sons who ran different verticals and deals and leveraging the relationships he had built in business, finance and politics. (Sen. Chuck Schumer was spotted at the office, as was Israeli prime minister Benjamin Netanyahu.)
Perhaps Crown’s biggest bet on New York retail came last April when it bought a reported 24 percent stake in Vornado’s prime Manhattan retail portfolio. The deal valued the portfolio at $5.6 billion. The retail market has continued its slide since then, however, and it’s unclear what the portfolio will be worth following the coronavirus pandemic.
“It’s almost kind of poetic, in a Greek tragic way,” a source in the New York retail market who frequently worked with Chera said of his death. “Because you have the retail industry, which he was such a pillar of, the retail world as we have known it, crumbling all around us.”
Dressed in a cream suit and addressing a gathering that included Charlie and Jared Kushner, Joe Cayre and other industry bigwigs, Stanley Chera was triumphant.
“All the disbelievers in the last few months, we had our ups and downs,” he said at his Long Branch mansion. “And today, I’m happy to say today, his polls are ahead, and we’re just going to go forward.”
It was the summer of 2016, a few months before the presidential election, and Chera was hosting a fundraiser for Trump. Along with Witkoff, Cayre, Howard Lorber, Richard LeFrak and others, Chera was a key figure in Trump’s path to the White House, donating hundreds of thousands of dollars to his campaign before and after he was elected. As of August 2018, Chera and his wife Cookie had given $514,000 to the Trump Victory fund.
During a 2019 campaign rally in Grand Rapids, Michigan, Trump gave his friend and stalwart a big shout-out.
“A friend of mine — he’s very shy, but he’s very rich,” Trump told the crowd. “He shouldn’t be shy. He’s one of the biggest builders and real estate people in the world, one of the biggest owners of property. I shouldn’t introduce him because you guys won’t like him, because he’s a big owner of property. But you own property, he just owns more of it than you do. And he’s a great guy and he’s been with me from the beginning — Stanley Chera. Stanley!”
Witkoff, commenting on Chera’s support of Trump, said Saturday: “Stanley, like me, was a very good friend to the president. When you’re a very good friend to somebody, you support them, unequivocally. I don’t think it gets any more complicated than that.”
Witkoff recalled gatherings that brought multiple generations of Cheras together in Deal, N.J., and remarked that Chera had managed to maintain a large, powerful united family even as other dynasties had split in feuds. “The most compelling quality about him,” Witkoff said, “with all the deals, all the success, is how he held that incredible family together.”
According to Vanity Fair, word in late March of the gravity of Chera’s condition contributed to Trump taking the coronavirus more seriously and abandoning his call to get the country back to work by Easter.
“Boy, did that hit home,” prominent New York Trump donor Bill White told the publication. “Stan is like one of his best friends.” Prominent industry figures such as Silverstein Properties’ Marty Burger, Soho Properties’ Sharif El-Gamal and Nest Seekers International’s Eddie Shapiro have spoken about contracting the virus, but most have recovered. A fellow retail investor and member of Chera’s Syrian Jewish community, A&H Acquisitions’ Harry Adjmi, was reported in late March to be unwell.
Speaking to reporters at the end of the month, Trump made reference to a friend of his who was seriously ill from the virus, which is especially dangerous to people over 80.
“He’s sort of a tough guy. A little older, a little heavier than he’d like to be, frankly. And you call up the next day: ‘How’s he doing?’ And he’s in a coma,” Trump said. “This is not the flu.” On April 1, Trump again noted that the virus had taken a devastating toll on one of his friends.
“He sort of is central casting for what we’re talking about,” Trump said of Chera, “and it hit him very hard.”
Write to Hiten Samtani at [email protected]