As the media becomes more eager to report on real estate — a reflection of the importance of the industry to the New York economy — the players are becoming more adept at working with, and sometimes spinning, the press.
“When I started out in the field, the print media would not even do a story unless the deal had closed,” said Steve Solomon, executive vice president and head of the real estate group at Rubenstein Associates, the public relations firm. “Now if someone is seen in a restaurant talking with somebody, there is a story about a deal the next day.”
Sometimes public information is released a bit early for better effect. Other gambits are releasing confidential information to scare off an unwanted deal, or leaking news of a pending sale to attract other suitors and a higher price.
In other cases, a reporter stumbles on a story long before it’s become public, yielding a tremendous scoop, like the time Charles V. Bagli of the New York Times overheard a mention of the pending sale of the MetLife Building. The deal set a then-record for the priciest office building sale ever when it was sold for $1.72 billion two years ago.
“Early on I got the sale book — you often don’t get a hold of those things,” Bagli said. Though the story was leaked before the buyers and sellers were ready, it worked nevertheless to publicize it. “Positive or negative, a big story about a sale does a lot of the brokers’ work,” said Bagli.
Leaked information is often the source of bad information, but the opportunity to present it to the client for clarification can be a journalistic foot in the door. Bagli said that sometimes when he receives leaked information, he’ll go to the source and ask which he or she would prefer — that he publish part of the story, with the possibility that some of it is incorrect, or that he confirm the story and fill in the blanks.
The kingmakers
The writers and publications that move and shake — according to several brokers, developers and property owners interviewed — include Bagli of the Times, Steve Cuozzo of the New York Post and James R. Hagerty of the Wall Street Journal.
Those are some of the go-tos for real estate executives who want to release information about deals both commercial and residential to a select media audience that they can trust, and who they feel will provide them with the necessary number of eyeballs.
In turn, the reporters follow up on tips, because convincing a publicist, owner or broker to fess up about the details of a deal is easier when the reporter has one or several nuggets of information about an upcoming sale, major deal or celebrity client.
To get coverage from prestigious media outlets, publicists have to present an interesting angle, noted Solomon. But that doesn’t always work out the way the source hopes.
“I am not interested in just recording deals; I am interested in the context,” said Bagli.
Add the Internet and the speed with which reporting can take place to the mix, and you have a stepped-up level of the game for press agents and writers alike.
“When you have a situation where you have the principals, the brokers, the lawyers, the consultants, there is a very good likelihood that someone with a relationship with someone in the media will slip and talk about it, and it starts a whole progression, and in these days of the Internet, that gets around very, very fast,” said Solomon.
His firm represented Macklowe Properties, which in early February purchased several of the Blackstone Group’s properties for $7 billion.
“We used to do a press release in the mail, and it took three days for the client to get back to us with changes,” Solomon said.
In the case of Macklowe Properties, he only knew 24 hours beforehand that the deal had been signed. Because Blackstone and Equity Office Properties, a REIT that was the initial seller to Blackstone, are public companies, Solomon issued a “vanilla” press release announcing the sale. But when it came to running the story, he went selectively to the Times to offer a more in-depth article.
Leaking info for better deals?
None of the brokers or developers this reporter spoke to admitted they ever leaked information about a pending deal to influence its outcome — whether to get a higher price, attract other suitors or even alienate a buyer who had become problematic.
But many said the number of people involved in today’s complex deals often provides a great opportunity for a leak to surface. “Part of the problem is you never know who leaked,” said Eric Anton, executive director of Eastern Consolidated, which handles many commercial property sales.
Anton agreed that some brokers have a reputation for leaking deals in order to get a higher commission. But more often, down the line is where the information gets out.
Controlling the leak is often as impossible as detecting where it came from, said others. Possible leakers include doormen, friends of brokers, boyfriends, girlfriends and even spouses who talk to their friends.
On the flip side, a big problem for many brokers is their fiduciary responsibility to the client often bars them from speaking with the press, even if doing so would bring positive results.
Two major transactions that Anton says he left unreported are his Barclay Street development site and the Sutton Hotel, even though they are listed on Eastern Consolidated’s Web site as projects the firm is handling, he said.
The 10 Barclay Street land deal encompassed 324,000 square feet and sold for $26 million. The site is being developed into a 56-story residential rental building by Glenwood Management and is expected to be completed in the late spring. The Sutton Hotel sold for $52.5 million in 2005. Originally intended for a condo conversion, the new owner, Kenneth S. Horn, who is the developer and president of Alchemy Properties, changed his mind and resold the building to Korman Communities, an operator of extended-stay hotels, for $88 million in October 2006. The hotel has been renamed AKA: Sutton Place.
On the residential side, “we have a number of clients who do not want any publicity, and we do not want to violate that,” said Hall Willkie, president of Brown Harris Stevens.
The firm is handling the sale of a $70 million penthouse at the Pierre Hotel. Aside from carrying the listing on the BHS site, the firm has been asked not to publicize the property. That’s in sharp contrast to 1996, when the previous owner of the property, Lady Fairfax, welcomed the press, and Willkie appeared in more than 40 television segments showing the property, he said.
Digging down
It’s not always the broker or seller that counts; the newspaper reporter also wants a scoop. “In the last five to eight years, there really are investigative reporters,” said Willkie. “And that never happened before.” For a paper like the New York Observer (now under the ownership of Jared Kushner, son of developer Charles Kushner), real estate often surpasses in page count other topics once central to the paper, such as gossip and politics.
Yet getting info isn’t always easy. On major deals, such as the sale of Starrett City to Clipper Equities, Darcy Stacom and her team at CB Richard Ellis representing the client put up a fortress against the release of information, while the seller, Starrett Associates, and the buyer, Clipper Equities, led by David Bistricer, were perfectly willing to talk to the press through their publicists.
Experts agreed that the involvement of the government in any way is usually a wild card as to whether a deal comes out smelling like a rose in the press.
Bistricer’s attempts to buy Starrett City without negative press have been difficult, according to observers, because the $1.3 billion sale of 5,881 apartments in 46 towers on Jamaica Bay in Brooklyn must be approved by two government entities: the secretary of Housing and Urban Development, Alphonso Jackson, and New York State Housing Commissioner Deborah Van Amerongen.
Fears that the building would no longer be affordable for long-term residents raised the issue’s profile in the public arena.
Bistricer hired public relations firm Linden, Alschuler and Kaplan, whose principals have government backgrounds. The firm has been orchestrating news about the Clipper Equities purchase through daily news-making events. They may even have been pivotal in helping assemble influential personalities to assist the troubled sale of the public complex: On March 23, the Rev. Calvin O. Butts III, leader of the Abyssinian Baptist Church in Harlem, and the Rev. A. R. Bernard, founder of a large evangelical congregation, accompanied Bistricer to a meeting with Jackson in Washington, D.C.
But it’s not always easy to keep the press out when dealing with large groups of people. Bagli is very proud of a letter tacked to his bulletin board. It is a copy of a letter sent by Real Estate Board of New York president Steve Spinola to its members who attended a private dinner. News of what was discussed at the dinner was leaked to Bagli — not just by one, but by several, people who e-mailed the Times reporter with the information.
“I was appalled to read a detailed account of our dinner at the Four Seasons,” wrote Spinola, according to Bagli. “I would appreciate if anyone unwilling to retain the confidentiality … would refrain from coming to future [events],” continued the memo, which had been distributed to the REBNY members who attended.
“And I had the memo 15 minutes after it was sent,” said Bagli. “The wonderful thing about the real estate world, they don’t necessarily want to tell you what they’re doing, but they’re willing to talk about what other people are doing,” he added.