The Closing: David Lichtenstein

The billionaire CEO on his rabbi father, soul-crushing cynics and buying Chagalls

Sep.September 15, 2016 12:00 PM

From the New York September issue: David Lichtenstein is the CEO of the Lightstone Group, a Manhattan-based real estate firm with a $2 billion portfolio that includes 11,000 apartments and 3,200 hotel rooms nationwide. A Democratic donor and a self-made billionaire, Lichtenstein has had his share of ups and downs. In 2009, his Extended Stay hotel empire filed for bankruptcy and was ultimately overtaken by investors. But the firm — which Lichtenstein founded in 1988 — is currently developing Los Angeles’ biggest hotel that’s currently in the pipeline, the 1,000-unit Fig+Pico in DTLA, as well as several NYC hotels in partnership with Marriott International’s [TRDataCustom] Moxy Hotels, including a 300-key property in the East Village and a 16-story conversion near Times Square.

You’re one of seven kids. What was that like?

I had to talk loudly in the family to be heard. I grew up in Brooklyn, near Madison High, where both Chuck Schumer and Bernie Sanders went to school.

What did your parents do?

My father was a rabbi and an educator, which meant there was no real wealth at home.

What were you like as a kid?

I always had a lot of questions, and we didn’t have a TV. My father bought me a World Book Encyclopedia. By age 10, I had finished it — A all the way through Z.

What was your first job?

It was actually selling encyclopedias. I was 17 and I needed money to buy some nice suits and stuff. It was brutal. You had to memorize this whole spiel and … you got the door slammed on you time after time. It was a pretty good education in dealing with rejection.

Why did you get into real estate?

I got married young. I was supposed to be a rabbi. I still study the Talmud. But when I brought home my first check, my wife looked at it and said, “This is going to last to the seventh of the month.” I wanted to start my own business, and real estate is sort of like a brain-dead thing. You add up the rents, do the expenses. I thought I could figure it out.

What does success in real estate take, if not brains?

You have to be willing to take risk and to fail. You have to say, “I will fall and I will cry. I am human and humans fail.” If you’re willing to accept that, then you can succeed in real estate without a lot of brains.

What does your religion mean to you?

Was it Thomas Paine who said, “The World is my country, all mankind are my brethren, and to do good is my religion”?

What was it like to marry at 24, and how have you made it work?

One of the challenges people have today is too much choice. You go to a restaurant and the guy comes over and asks, “Do you want sparkling water or bottled water, tap water, Evian?” You get a headache. On some level, too much opportunity becomes like a deluge. I was 24, I didn’t know anything. Some people say you have to respect your spouse, but it’s about respecting the institution of marriage. It was the understanding beforehand that we were going to make this work that made it work.

What does your wife do?

She’s a successful NYU life and relationship coach.

You famously started by buying properties on your credit cards. Was that nerve-racking?

When you start with nothing, you have to live on your wits. The first thing I bought was a two-family house in Lakewood, New Jersey, where I was living at the time. I bought it for $92,000 in 1987, and I sold it for $650,000. I wish I had more deals like that. Until then, I had never so much as picked up a hammer. I learned to be a barber on my own head of hair.

Was the Extended Stay bankruptcy your lowest career moment?

There have been many hair-raising moments. … I have a whole book entitled “Stupid Stuff I Have Done.” It’s very thick.

Forbes pegs your net worth at $1.4 billion. How do you feel about money?

Money is an affirmation of hard work. But I know I’m not better than anyone else because I’ve made money.

What’s been your most extravagant purchase?

I grew up poor and my car is a Lexus from ’09 that I bought used. My only extravagance is that I buy art. I do have some Chagalls and things like that.

Tell me about your Times Square project.

It’s going to be a Millennial steroids experience. They’ll be drooling.

What’s your advice to someone 20 years younger?

Don’t become a square watermelon. Try to remember who you were when you were a child and your soul was given to you — before it was squashed by the haters and the cynics.

You donated $250,000 to Hillary Clinton’s presidential campaign. Do you know her personally?

I know her pretty well. She would have made a better president than Obama. Before fund-raisers, she memorizes everyone’s name and picture so she can say thank you. She’s not a fuzzy teddy-bear person, but the best CEO in real estate is not a fuzzy CEO.

Who’s that?

David Simon. He’s hard as nails. I’m one of his largest shareholders.

Is he more fuzzy in real life?

No. But it’s not about having a big smile. This is not a reality TV show.

I take it you’re not a fan of Trump …

It’s a sad day if he wins. His daughter said he’s a kind and compassionate person, but even a Tyrannosaurus Rex is nice to its kids.

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