The Closing: Simon Ziff

Simon Ziff has been at the helm of Ackman-Ziff Real Estate Group since 1995. As one of the most prominent boutique real estate debt and equity brokerages in the country, the company closed more than $7 billion in deals last year and about $85 billion in total since Ziff became president. The advisory firm dates back to 1926, when Herman and Bert Ackman initially founded it as Ackman Brothers. It has since worked on financing deals ranging from the Milford Plaza Hotel in New York (now known as the Row NYC Hotel) to the Parkmerced project in San Francisco, the brokerage’s largest to date, totaling $1.75 billion in debt and preferred equity. Ackman-Ziff now employs 50 people and has offices in New York, Miami, Los Angeles and Boston. The company is active in other cities, including Philadelphia, Denver and Washington, D.C., where Ziff said he will likely open an additional office in the future. Ziff grew up in Philipsburg, Pennsylvania, attended Penn State University and remains a big fan of the school’s wrestling team. He earned his master’s degree in real estate from NYU and got his first job in the business after responding to a newspaper ad from Larry Ackman seeking someone to come join his firm in the late 1980s. Ziff has remained with the company ever since. He took over as president after deciding to stay on board rather than join Ackman’s partner and cousin Andy Singer when they parted ways in the mid-1990s. And Ziff continued to lead the brokerage after Ackman left in 2009 to join his son’s hedge fund. In a wide-ranging interview that The Real Deal conducted by video in a sign of the times, Ziff touched on topics ranging from the rapidly spreading coronavirus pandemic to turning down acquisition offers for Ackman-Ziff.

DOB: September 26, 1964
Lives in: Armonk, New York
Hometown: Philipsburg, Pennsylvania
Family: Married with three children

What is your full name? Simon Ziff. I have no middle name. I got gypped.

What was it like growing up in Philipsburg? I liked my childhood. I played baseball, rode bikes around town, walked to friends’ houses. It was a very simple, peaceful childhood, so much so that when I go to sleep at night, I [sometimes] go to sleep thinking about my hometown.

What were you like as a kid? I was not rambunctious. I was meticulous with hobbies. One of my biggest was electric football — little plastic players with little green bases that you could adjust to set up plays. There were actually electric football leagues.

What did your parents do when you were growing up? They had a men’s clothing store bordering the Penn State campus on College Avenue. They both worked there together.

Were you a good student? Is a 1.8 GPA your first semester of college good?

It’s all relative. Well, it may have been in the top 25 percent of my pledge class. I got better as a student as the years went on. Academics weren’t too important in Philipsburg.

What was your first job? My grandfather was a suit manufacturer. My first job was making boxes in his factory. You fold the cardboard, and you tape them, and then you give them to the next guy.

You live now in Armonk, New York, in Westchester County. Would you ever consider moving to the city? I hope to move to the city part-time when my son graduates from high school. My goal is to see live music at different places 20 to 25 times a month.

Do you have any other homes? We don’t.

How concerned are you about the ongoing coronavirus pandemic? We’re first making sure our people are safe and functioning. We’re also trying to close the deals that we have in house, whatever it takes. We have to make sure our borrowers understand that things can get worse, and if the deal on the table is attractive, they should close it. We’ll continue to be really selective on development, as I’m certain many of the equity sources will turn their attention to distressed opportunities.

For us, this could be an opportunity to try making some strategic partnerships and hires. I’ve already heard from other firms that want to join forces. It’s nice to have friendships in the business at times like these.

What’s your biggest worry about the pandemic? Aside from health issues, it’s that the capital markets shut down. Right now, we still have liquidity. If liquidity goes away, we’re all dead.

Are you worried about a credit crunch at all? We’re always worried about that. I don’t anticipate it, but we have to be prepared for it.

What would a credit crunch mean for Ackman-Ziff? We would ramp up our restructuring business, which we’re already looking into. The good news is our clients have become more and more the entrepreneurial funds, and they’re going to be really active if there’s a credit crunch.

What did you learn going through the 2008 financial crisis? Do any of those lessons apply to the one it looks like we’re heading for now? Sure. No. 1, we kept pretty significant reserves in the firm in 2008, which were incredibly useful. For this downturn, we’ve doubled those reserves. We were also very entrepreneurial in 2008, and we formed some strategic partnerships in loan sales, for example, that resulted in meaningful income for the firm. We’re already selling loans now and getting our distressed advisory personnel in place.

How did you first get involved in the real estate business? I got into it in 1989 when I answered a New York Times ad to join Larry Ackman at the predecessor firm Ackman Brothers & Singer. Ackman Brothers was a premier firm in the ‘80s and probably long before that.

Did you consider any other careers? If you look at my high school yearbook, my ambition was to go to Silicon Valley and win a golf championship. But I burned out at golf when I was 17. I also thought technology would be a good field for me, but I didn’t pursue it.

Larry Ackman and Andy Singer split in 1994. Why did you decide to stick with Larry instead of go with Andy? My overall comfort level was greater with Larry at the time. His son Bill was also establishing himself in private equity, and those relationships would ultimately become very important to Ackman-Ziff as we moved more from a local developer clientele to a fund clientele.

What are some of the most important lessons you learned from Larry? I tried to be a lot more inclusive in decision-making with the team than I had experienced at the old firm. I truly view everybody in the firm as partners.

Why did Larry decide to leave Ackman-Ziff? I think he realized that he wasn’t enjoying advisory work as much, and he had an opportunity to go work every day with his son, which is pretty exciting.

You told us back in 2014 that you’ve turned down offers from CBRE and Cushman to buy Ackman-Ziff. Did those talks get to the point where they gave you a price tag? No. We got the price tag on a few acquisition offers, and on others, we didn’t get that far. There have been many conversations over the years. It’s never really been about price as much as about what life would be like after the acquisition.

Is that why you’ve turned down all the offers you’ve received so far? Yeah, pretty much. In one case, a major brokerage firm told us that their coverage model is “the Code of the West.” Anybody can call anybody at any time. That wasn’t going to work for us. It would be very challenging to keep a good cultural environment and team orientation with “the Code of the West” as the operative for finding new business. I never want to jeopardize the culture of the firm.

Have you received more recent offers to buy Ackman-Ziff? Sure. We had one in 2019 that we didn’t move forward on. It was a major national public company.

Would you ever consider selling the firm? We would absolutely consider selling or joint-venturing with a firm with a lot of talented people and a like-minded culture.

How have Ackman-Ziff’s expansions into the West Coast and Florida been going? They’ve been very complementary to our business. Clients in New York are doing business elsewhere, and we can service them a little better by having key colleagues in other areas. Last year, we did more than 35 percent of our volume on the West Coast.

Do you feel like New York has become a harder place to do real estate deals in recent years? I think there’s been a price discovery issue for a while. I wouldn’t say it’s harder to do deals in New York. There are some investors outside of New York that have paused because of the political landscape, but there are still plenty of investors interested in New York.

Do you think any of the criticism the real estate industry has been facing recently is fair? I don’t have a strong view there. I haven’t thought it through.

What’s the biggest mistake you’ve made in your career? The mistakes are on the hiring side. I have very few regrets, but there’s a breed of real estate broker that cares more about their contracts than their production. We’ve tried to avoid that animal as much as possible, but you can’t 100 percent of the time.

What do you like to do to unwind? I like to meditate. I like to garden and prune my trees. I like to exercise.

Do you still exercise in your suit pants? Yup.

Are you still close with Larry and Bill Ackman these days? I am. They’re two of our bigger clients. I speak to Larry pretty regularly.

Bill has faced criticism over his aggressive investment style at Pershing Square Capital Management. Do you have any thoughts on how he’s run the business? I think he’s doing great right now. The guy is super talented and always figures out a way.

Any thoughts on his Herbalife short? I think he had it right.

What’s the best professional advice you’ve ever received? I don’t remember who told me to play the long game, but that’s the best advice I’ve ever received.

How did you and your wife, Hope, meet? I met her at a dinner party with fellow graduates of the NYU master’s in real estate program. That was 30 years ago.

She’s called you a hillbilly at heart. Any comment on that? She calls me that less often now. I think she says it because I connect so deeply to my childhood, which was out in the country.

You wrote on LinkedIn in 2017 that you had never tried a recreational drug in your life. Is that still the case? It’s still the case. I think that I may one day. It would have to be the right moment.

What was your last big purchase for yourself? I bought a $1,500 leaf mulcher from Home Depot less than a year ago, but it won’t start.

What’s your favorite place to eat in New York? The Red Rooster [in Harlem].

It seems like your “fro” is a big part of your brand these days. Would you ever change your hairstyle? I might try it. It’s unfortunately too much a part of my brand these days. It was zero part of my brand before I grew it out.

Any fears of balding? I have a ceding hairline, not a receding hairline.

What do you want your legacy to be? That I helped the people around me whenever I could, and hopefully those people will check in on my kids when I’m no longer around.

— Edited and condensed for clarity.

CORRECTION: A previous version of this interview identified Ziff’s grandfather as a boot manufacturer. He was a suit manufacturer.