A few weeks before Mort Zuckerman wrangled a deal for one of the most iconic buildings in New York City, he told me that if another bidder won the General Motors Building, he would buy a full-page ad in this magazine with a picture of the winning bidder lounging on a sunny beach with a Daiquiri in hand. Zuckerman would cover all costs, a decidedly lower sum than the $2.9 billion he ultimately paid to own the GM building.
It’s ironic how Zuckerman, head of Boston Properties and publisher of the Daily News, is all over television and newspapers talking about the end of the bull market and the plunge into recession when he shelled out the highest price ever paid for a U.S. office building.
Could it be that he is shooing the flies away while he feasts on a timid market? Well, it’s no secret that lending is tight. Banks are being demanding for even cautious deals, which the GM transaction was definitely not.
So naturally, Zuckerman turned to Middle Eastern investors from Qatar and Kuwait. This sort of financing is not available for everyone, but Zuckerman is not just anyone. A New Yorker profile once described him as a quiet-yet-alluring globetrotting real estate billionaire who advises heads of state and knows his way around both fine art and a good joke. Clearly, the man knows how to make a deal.
Someone else who has continued to manage making deals is Kent Swig. This month we bring you a long-overdue profile on Swig that you won’t see anywhere else. He’s Harry Macklowe’s son-in-law, and the 46-year-old is rising fast in the real estate world, though he still has a long way to go before he sits at the head of Macklowe’s table. He’s been on a steady buying binge over the last several years, picking up office buildings in Lower Manhattan, where he has been particularly active, and scooping up companies such as Helmsley-Spear. His $418 million purchase of the Sheffield, the West 57th Street apartment building he’s converting to condos, set a 2005 record. He also forked over $260 million for a residential building at 25 Broad Street, setting a Downtown record. You’ll learn a lot more about him in our piece.
We’ve always taken great pride in knowing what’s going on in the market and having the time and resources to delve deeper than other news outlets into the topics that are affecting our industry. One of our great assets is regular conversations with industry leaders. On a weekly basis, we invite sources, including investors, analysts, developers, brokers and company heads to come to our office and give us their perspective on the market.
Prolific hotel developer Sam Chang was one recent guest. He said he’s continuing to buy development sites when he comes across opportunities, even as he sells other properties. And he’s still got plenty of hotels in the pipeline to finish, more than any other developer in the city. He’s also going to move a little bit more into the hotel operating business (as you’ll likely read about in an upcoming issue).
It’s important for us to know these industry leaders in order to bring you stories that get at what they are really thinking.
These conversations also spark research and reporting like what you’ll find in a package of stories that looks at price changes at new condo developments in Manhattan and Brooklyn over the past three months.
We found prices are decreasing on the whole. While much of Manhattan remained strong — particularly Downtown and the Upper East Side — Harlem was weak and saw a lot of price decreases with few price increases. Brooklyn fared worse than Manhattan overall. Williamsburg saw the most total price decreases as was somewhat expected, as a result of what many see as an oversupply of new development there.
Finally, with summer here, we know readers will want some fun beach reading. Check out the first-ever New York City real estate crossword puzzle on page 162 and a review of Barbara Corcoran’s book, Nextville.
Enjoy the issue,
Amir Korangy