NOT NEWS – Real Estate Dirt

Once you’ve been in a job for awhile, it’s like you’ve joined a secret society. There’s a particular lingo that you learn, a specific circle of colleagues and competitors you run into all the time. You’re in a group apart with special knowledge known only by other members of your group. And there are dozens of these specialized groups, hundreds, maybe thousands, intersecting with each other at strange arcs because anyone may be a member of more that one group. It’s a fantastic kaleidoscope bound together by commerce and social gravity. Me, I was born to be retired. All those years distracting myself with useless arcana are finally paying off. I became interesting. My work years were definitely warm-up for now. I do miss being a member of my group, the commercial real estate traders and lenders attorneys in New York City. I miss the gossip. I miss the belonging. In the latest issue of The Real Deal there’s an article entitled ‘Rentopoly: Who owns New York ( ). All New Yorkers like to talk real estate, right? The authors have tried to create a methodology for determining which entities are the largest residential landlords in the city. There are some surprises. Several entries which wouldn’t have been there 20 years ago. Some you might expect are not there. Some are entities I’ve done deals with or worked for [Understand that I had practice but I wasn’t Ed Breger or even Jonathan Mechanic or Andy Albstein but I was a member of the club]. So I thought I’d talk about some of them. First on the list is Related which is run by Steve Ross. 

He’s become so ubiquitous so quickly. I’ve only been at the table with him once. He was buying a nursing home from my client which Related was going to tear down and use for a development site. I liked him. He’s a former lawyer, a little geeky but he’s got those problem-solving skills that good lawyers have and which clients rarely do. A couple of weeks after the closing, which was when the Time Warner Center was still brand new and hot, my father called him up and asked if Steve could get a reservation at Per Se for him that weekend (honestly, I don’t think my father knew what he was asking for). Steve was friendly, unruffled and graciously took care of it like he was the maitre d’. On a different matter, I personally am not a believer in the myth of Maurice LeFrak, French developer and bon vivant. I believe in Sam Lefrak, the ambitious dynamo who developed the buildings that bore his capital-less name. 

I’ve only done one deal that involved Richard. I was representing a potential purchaser of a package of buildings in Brooklyn and Queens. Most of the contract was done with some third-generation Lefrak who kept saying,”I want to hear all of your comments before I respond,” but made disapproving noises after everything I said. It ended up that our mortgage broker couldn’t guarantee us the last $10m so we chose to walk. That’s a bad feeling. It feels like a failure of nerve and often is. If Ed was on the deal would we have taken the risk? In any case, Richard came out after everything, very distinguished, sat with us for a few minutes, we all shook hands and that was that.  The wild performance of the evening came from the broker, D’arcy Stacom, who shrieked out a third rate Sue Mengers impersonation with, “You’re never going to get deals again!” Shook me up. Man, I could just go on and on but there are two more items I’d like to cover for sure. Down towards the bottom of the list is Solil Management where I worked as a managing agent before law school. The principals are the heirs of the late great Sol Goldman, the closest thing to a mentor I ever had. 

Based on the methodology described in the article, I don’t think the authors included rental units in buildings subject to net leases. Mr. G liked to buy those fee positions so I think Solil is probably underrepresented on the list. Finally, a blind item: which of the listed entities has a single principal who is the most arrogant, nasty and unpleasant person alive. He started off with his charming then-partner buying crappy Bronx buildings with wraparound mortgages and he was a jerk then. When I would get paid by him (as I was lender’s counsel) he’d cut my bills and then complain to my client to cut me even more. He and a couple of friends/colleagues were going to buy a house to develop and live in on the upper east side but it went nowhere because they each realized what a dick he is. Gotta hand it to him, he made it all himself. And lost most of it too. Only in New York, kiddies, only in New York.  

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