Real estate investors are always thinking about leverage. The right amount can juice returns, while too much can wipe out investors’ equity.
For Jeffrey Epstein, real estate offered a kind of leverage that extended beyond financial returns. The properties he poured millions into also delivered insider access, drawing on connections he spent years cultivating. Physical space mattered, too: He sought out places where he could move freely, and where women in his orbit could be housed or employed at a distance from his name. His project partners became part of the machinery, helping to sustain a network built on relationships. In some cases, Epstein avoided putting up his own capital, instead using projects to build loyalty by positioning himself as a mentor and advisor.
The Epstein story — of his rise to the top of New York City’s proverbial food chain while orchestrating a sprawling sex trafficking operation — has always been a beguiling one. His real estate dealings offer a window into how he managed both people and money, the two tools he deftly wielded in his ascent, according to emails and documents released by the Department of Justice. Epstein’s emails, which tend to have typos, misspellings and grammatical errors, have been quoted without edits throughout this story.
Epstein operated with a consistent investment strategy across his deals: minimal capital, maximum upside. In condo projects, he secured some of the most lucrative returns, despite taking on little to no development risk. In other deals, he inserted himself into operating teams’ inner circles while limiting his own financial exposure.
His portfolio spanned Core Club, a marina in the Virgin Islands and boutique condo developments in Nomad and Brooklyn and on the Upper East Side. He also extended $2 million in loans to developer and friend David Mitchell, including about $70,000 tied to Mitchell’s Life Hotel in Herald Square.
The results were uneven. At the Nomad project, Epstein notched an 80 percent return on his initial investment. But in an Upper East Side condo project with Mitchell, Epstein lost his entire $3.48 million stake, emails suggest.
“I just wanted to tell you how much I appreciate all that you have done.”
At Core Club, Epstein contributed just $100,000 as a founding member, but his role extended beyond capital. He advised founder Jennie Enterprise on potential investments, and in return, Epstein sought favors, including asking her to hire an acquaintance. (A Core Club spokesperson said, “No one referred by this individual was ever hired to work at the club or at the skincare institute. The Enterprises were not part of this individual’s social world.”)
For most of these deals, Epstein relied on a key connector: New York developer David Mitchell.
Mitchell, whose father revived New York institutions Lüchow’s and Longchamps, had deep ties across the city, sources said. Epstein saw Mitchell as a trusted partner and a fellow aspirant to elite circles. In 2010, Epstein sent Mitchell to Dubai to meet his friend and Emirati billionaire, Sultan Ahmed bin Sulayem, and later hosted him at his townhouse for a meeting with Peter Mandelson, a former member of British parliament.
Mitchell also opened the door to insider opportunities. In at least two cases — including the Nomad and Upper East Side condo projects — Epstein took stakes in the development entities themselves, effectively investing as a developer without assuming the typical risk or workload. When the penthouse at 21 East 26th Street sold to Jennifer Lopez for $20 million in 2014, Epstein netted about $750,000, an 80 percent return.
Mitchell could not repeat his success.
His deals ranged from delis to rare coins to home retailers. He pitched Epstein on investments tied to Alberta’s oil boom and a marijuana venture in the Virgin Islands. Their real estate partnership began to unravel around 2015, when Mitchell took on a hotel redevelopment in Herald Square. As Epstein loaned Mitchell money to keep the project afloat, the pair also pursued an Upper East Side condo that eventually went bust.
Real estate accounted for only a small portion of Epstein’s more than half-billion-dollar fortune. But his real estate investments gave him something else: influence.
The Real Deal examined Epstein’s major real estate ventures in New York City, the players involved and how he leveraged each deal to his advantage.
The People
The key player
David Mitchell
A longtime friend and frequent deal source for Epstein, Mitchell came from a blue-blood New York family and had a knack for finding opportunities — from rare coins to the Carnegie Deli to condo developments. He pitched many of these ideas to Epstein, who invested in several of his real estate projects. Some of the early deals seemed to pay out, while later ventures — including an Upper East Side development known as the Park Mansion — fell apart. Epstein steered clear of investing in Mitchell’s most ambitious project, a Herald Square hotel, but remained closely involved in its operations and finances. He placed considerable trust in Mitchell, sending him to meet foreign dignitaries and prospective investors. In 2019, Mitchell and Epstein’s brother, Mark, were the only two people to put up collateral for Epstein’s bail bond.
The facilitators
Richard Kahn
Epstein’s in-house accountant since 2005, Kahn reviewed and tracked his financials and investments, keeping close tabs on the real estate ventures tied to Mitchell. Over time, he appeared to grow skeptical of Mitchell, writing in a 2019 email that “jeffrey trusts you yet you give me bad info every day.” Still, Kahn played a key role in sustaining the relationship, signing off on loans Epstein extended to Mitchell as the Life Hotel struggled.
Lesley Groff
Epstein’s longtime assistant, Groff served as the connective tissue between his investments and his network-building. She coordinated meetings between Epstein, Mitchell and potential investors. At the Life Hotel, she also arranged VIP rooms for individuals she referred to as Epstein’s “friends” — women visiting from out of town for short stays. A statement from Groff’s attorney stated that she was part of Epstein’s extensive professional staff and made “thousands of appointments for Mr. Epstein as directed by him, taking his messages, booking flights, and setting up high-level meetings with CEOs, business executives, scientists, politicians, celebrities, charitable organizations, and universities. She was unaware of Mr. Epstein’s criminal conduct and is heartbroken for the women he victimized.”
Friends & partners
Steve Hanson
One of New York City’s top restaurateurs, Hanson built BR Guest into a sprawling hospitality group behind spots like Blue Water Grill, Strip House and Dos Caminos, before selling a 50 percent stake to Barry Sternlicht’s Starwood Capital for $150 million. But his plans for a massive expansion faltered and by 2013 he was looking for a way out — turning to Jeffrey Epstein for guidance on structuring his separation. In 2017, Epstein again inserted himself into Hanson’s orbit when the restaurant mogul sought to develop the chic Life Hotel in Herald Square with Mitchell. The venture unraveled, with Epstein attempting to mediate the dispute. Hanson, in turn, offered favors: Epstein’s assistant asked to use Hanson’s Hamptons house to host “the girls” for a weekend, Hanson helped find Epstein’s friend, Julia,
a job at the hotel.
Andrew Farkas
A scion of the family behind the Alexander’s department store chain, Farkas founded merchant bank Island Capital Group and maintained both social and business ties with Epstein. The two partnered on the American Yacht Harbor, a marina in St. Thomas in the U.S. Virgin Islands in 2007 near Epstein’s expansive residence, eventually splitting ownership 50-50. Their relationship extended beyond the deal itself.
In a statement, Farkas said: “I deeply regret ever having met this individual, but at no time have I conducted myself inappropriately. Over more than 15 years, there were exchanges that, when taken out of context or without understanding my broader communication style, can be mischaracterized. However, as even press reporting has acknowledged, there has been no evidence of any wrongdoing or impropriety. That is because there has been none — ever.”
Jennie Enterprise
Founder of the members-only Core Club, Enterprise leaned on Epstein for financing and tax advice. Epstein was one of Core’s 150 founding members and remained closely tied to the club even after he swapped his founding member stake for a standard membership, continuing to visit for services like skin-care treatments. Enterprise regularly sought his input on potential investments, including discussions with former Microsoft exec Nathan Myhrvold, sharing deal structures and even draft term sheets for feedback. Epstein, in return, sought favors from Enterprise, at one point asking her to hire a “girl” for a hostess or spa role, offering to cover her salary himself. A Core Club spokesperson said “No one referred by this individual was ever hired to work at the club or at the skincare institute. The Enterprises were not part of this individual’s social world.”
The Projects
Whitman
Mitchell pitched Epstein a NoMad condoproject at 21 East 26th in 2011. Mitchell and his partners would convert a former fabric showroom into a four-unit luxury condo building known as the Whitman.
Mitchell became the sole developer and offered Epstein a chance to invest in his development entity. He offered Epstein a 30 percent stake in the project’s development company, known as AdvanceStar. Epstein put in a total of $920,000 into the condo development. By investing in AdvanceStar, Epstein got the ultimate insider deal because he could make the returns of an investor without taking on any of the risk or work.
Epstein even asked Mitchell for a better deal — if he could forgo profits and take the penthouse.
“Tough to do as the deal closed in February,” Mitchell said in an email in 2011. Mitchell mentioned that Howard Lorber, then CEO of Prudential Douglas Elliman, was an investor.
Epstein told Mitchell to send details anyway, noting, “I could always ask Howard [Lorber], i like him.”
Epstein’s returns were contingent on the penthouse, a 6,000-square-foot duplex with two staircases. Listed for $25 million, it sat on the market for a year until a mystery buyer emerged. In October 2014, Mitchell told Epstein in an email that someone offered $19.8 million for the penthouse. The buyer, not named in the email, was later revealed to be pop icon Jennifer Lopez.
“I think we take it Bottom line on your investment You put up 920,000 Out of this you will receive about 1,668,000,” Mitchell wrote to Epstein. “Of which 220,500 was returned in 2013.”
“Not amazing returns but ok,” Mitchell added.
Epstein’s stake in The Whitman was among his most lucrative real estate investments. Epstein made an 80 percent return on his initial investment, according to emails and projections.
Life Hotel
Epstein’s involvement with Mitchell and Hanson’s 2015 renovation of the Herald Square Hotel was the perfect encapsulation of his relationship with real estate. Epstein never invested in the hotel, but he used it to deepen both men’s reliance on him, doling out financial and operating advice to each of them while their project slowly unraveled from construction delays and cash shortages.
The partnership between Mitchell and Hanson, both longtime friends of Epstein, also quickly devolved, with each leveling harsh allegations against the other. Hanson once called Mitchell “a piece of shit” in an email while Mitchell referred to Hanson as “toxic” in another email. But the two never lost faith in Epstein or blamed him, instead thanking him profusely for his advice along the way.
Epstein took advantage of the hotel when he could, booking VIP rooms for women friends in from out of town and finding an admin job for another friend.
When Mitchell and Hanson were struggling to come to terms on a loan modification in July 2017, Epstein seemed to help them get the deal over the finish line by guaranteeing Mitchell’s side of the deal.
But Epstein only guaranteed up to $1 million on what was a $41 million loan. It was classic Epstein, building up more goodwill from both of his friends while risking very little to do so.
“Thank you so much for your supreme acts of friendship and spending the time to get this loan done,” Mitchell wrote Epstein after the loan was signed. “I just wanted to tell you how much I appreciate all that you have done.”
Core Club
When Jennie Enterprise founded Core Club in 2005, Jeffrey Epstein was among its earliest backers. Part of the appeal of Core Club was the same for any investor — proximity to other wealthy and influential New Yorkers. Fellow founding members included RFR’s Aby Rosen, Vornado’s Steven Roth, and Blackstone’s Stephen Schwarzman.
But Epstein turned his initial investment — $100,000 as a founding member — into a deeper relationship with Enterprise, taking on the role of advisor and mentor as the club ran into financial difficulties. When the club owed its landlord roughly $6.8 million in unpaid rent around 2015, Enterprise kept Epstein closely informed, sharing corporate tax returns and asking for guidance on deal structures. He introduced her to potential investors, including Nathan Myhrvold, and weighed in on term sheets. Enterprise referred to Epstein as her “guardian angel.”
Epstein also benefited, again, from having connections to another physical destination. Epstein booked numerous facials with Jennie’s wife, Dangene, and arranged for women in his orbit to attend Core’s spa.
“As it has already been clearly stated on the record that this individual did not put CORE: in biz,” a Core Club spokesperson said in a statement. “No business deal ever transpired between Nathan Myhrvold and the club. No one referred by this individual was ever hired to work at the club or at the skincare institute. The Enterprises were not part of this individual’s social world.”
Park Mansion
Epstein sought to replicate his success at The Whitman on David Mitchell’s next project on the Upper East Side. Mitchell acquired a historic building at 320 East 82nd Street for $23.2 million in 2015 with a goal of turning the project into six luxury condo units. Epstein invested $3.48 million into the project.
This time, Mitchell once again allowed Epstein to get a slice of the development profit. Epstein and Mitchell each had a 50 percent stake in Park Partners Manager, which appeared to be the sponsor entity. As part of the deal, Epstein would get a preferred return ahead of Mitchell. Mitchell would only get distributions after Epstein received a 20 percent return on his investment. After that, Mitchell would receive the rest of the distributions.
But Epstein and Mitchell never saw distributions. By 2018, the condo market had slowed and the condo’s high price point of over $2,000 per square foot concerned Epstein’s accountant Richard Kahn. Mitchell was also dealing with shortfalls and partnership disputes on his other project, the Life Hotel, a hotel in Herald Square.
“He missed the market due to hotel and other issues . bad,” Epstein’s accountant Richard Kahn said in one email to Epstein about Mitchell’s struggles. Kahn even privately told Epstein that Mitchell should consider handing over the keys to the project to the lender and “walk away” from it.
“[Mitchell] is clearly lost,” Kahn wrote to Epstein in May 2018. “It appears from sales scenario…we get back $0 on our $3,480,000 investment.”