Do you have a sentimental favorite in the portfolio?
Well, let’s start by saying that it’s unavoidable to not think of the Empire State Building. But that, to me, is like hunting the great white whale. Making it successful is a giant, giant project, and I view it without sentiment.
But if I have a soft spot in my heart, it’s for 1359 Broadway because, when we took that building over, it was 40 percent occupied and one-quarter of that occupancy wasn’t even paying rent. It was a low-priced, ladies dresses textile showroom. There’s no low-priced ladies textile business in New York City, let alone in the United States. It’s all overseas. We took this building and we turned it into one of the finest boutique office buildings in New York City, with a fantastic tenant roster. We tore up the lobby, and while doing so we realized the vestiges of the original lobby ceiling underneath the ceiling that had been put in there in the 1960s. We re-created the original ceiling. You know, I look at that and to me that’s really an example of making something from nothing. It had no debt on it and it was losing money, and now it’s a fantastic success.
How close do you work with Helmsley-Spear these days?
We work closely and constructively with the Helmsley estate. Over time they will be selling all of their interests, and over time we will be the likely buyers. In most instances, we have the rights to be the first purchaser. I consider that one of our great accomplishments, which was to be able to sit down with them after years of litigation and hardship and to be able to demonstrate to them that our ideas were sound, our execution capacity was excellent and that we would be able to prove to them that we were not the evil bad people that Helmsley Spear had made us out to be. So we have a constructive relationship with them, but it’s necessarily short term. It’s not going to go on for a long time because they’re going to sell. But we look forward to buying their interests and moving forward.
At a recent real estate seminar, you were quoted as saying, ‘We are in a world of disruption of information.’ What does that mean?
Well, I was applying it to a real estate context in the current time. Without transactions taking place, there aren’t that many data points. Businesses are changing radically, while at the same time we’re going through an economic difficulty. So from my perspective, the most important thing is to understand what you know and do what you know. Focus on it and be good at it, and chart your own course because if you’re looking around for indications for where things are going, there’s total uncertainty out there.
jsederstrom@observer.com
