John Kenneth Galbraith, the Keynesian economist, defined power as “the possibility of imposing one’s will upon the behavior of other persons.”
From Stephen Ross and The Related Companies’ successful development of a new neighborhood along the Far West Side to Jeff Sutton of Wharton Properties setting records for retail in Times Square, power is an ingredient served boldly in real estate circles.
Since 2008, when The New York Observer launched its annual Power 100 rankings, influence has shifted from Mr. Ross, who earned the coveted top position that year, to Douglas and Jody Durst, who earned the title in 2011, as much for their roles in shaping sustainable building practices as for wresting control of 1 World Trade and later luring Condé Nast to the building, which helped lend a fashionable sheen to lower Manhattan. It has included the Russian fertilizer magnate, Dmitry Rybolovlev, as well as politicians no less influential than President Barack Obama and Mayor Michael Bloomberg, for whom power is inarguably a way of life.
Of the 167 names on this year’s list—down just a single individual from last year’s rankings—squarely 40 percent come from the ownership and development sectors, an indication not only that real estate titans are on a buying spree, but that the value of land is bouncing back into vogue, as some, like Edward Minskoff, noted early on in the economic cycle. Elsewhere, brokerage firms like Avison Young and Newmark Grubb Knight Frank, which took home the Real Estate Board of New York’s coveted “Ingenious Deal of the Year” award last month, were firing on all cylinders, inking deals for powerhouse clients in an otherwise frenetic 2012.
For Extell Development President Gary Barnett, who was born Gershon Swiatycki in an Orthodox Jewish enclave on the Lower East Side far removed from the luster and glitz of One57, power has taken many forms, not least of all his success in creating a new plateau for luxury.
Since transitioning into real estate from a career as a diamond trader, Mr. Barnett has displayed an unwavering willingness to butt heads, going to war with Bruce Ratner twice—first for control of the land under The New York Times’s Eighth Avenue headquarters and then with a last-minute bid for the rights to the Metropolitan Transportation Authority-owned Atlantic Rail Yards in Brooklyn.
Along the way, he’s drawn the ire of Donald Trump and The Related Companies, not to mention countless other real estate titans who he has refused to play nicely with.
“He has a real strong stomach,” Corcoran Chief Executive Officer Pamela Liebman said of Mr. Barnett in a 2010 profile of the developer. “He shows no fear.”
But as in any conversation about intangibles, the question always dissolves into a chicken-or-egg debate. Is it Mr. Barnett wielding the power, what with his considerable ability to shoulder out the competition and lure in foreign investors for his $95 million palaces in the sky, or is it rather the foreign buyers themselves?
To wit: since March of last year, Massey Knakal Realty brokers have sealed high-profile deals with 14 buyers from China alone, including the $54 million sale of a 400,000-buildable-square-foot development site in Williamsburg to that country’s government. Meanwhile, brokers at the investment sales firm closed transactions with investors from Mexico, Japan, Germany, the United Kingdom, South Korea, Brazil, France, Taiwan, the Netherlands, India, Singapore and Venezuela, to name a few.
In other words, whose will is being imposed upon whose?
“We’re still in this global credit crunch, and according to the Federal Reserve, credit, as far as residential mortgage lending is concerned, has not materially changed since Lehman fell,” said Jonathan Miller, president of the appraisal company Miller Samuel Inc. “So international consumers are paying cash, and while that isn’t a new concept for the high end of the market, it does give them significant buying power. They’re dictating more favorable terms than almost everybody else.
“So, yeah,” he continued, “the foreign buyer has a lot of power in this city right now.”
With that in mind, take stock and enjoy this year’s list, a purely subjective accounting of relative power and those New York City real estate brokers, architects, developers, attorneys, politicos, landlords and financiers who wield it oh so well.