The Puzzle Solver
Jotham Sederstrom Feb. 22, 2010, 3:50 p.m.
When it was announced last week that the coveted Drake Hotel site had been sold for $305 million to the California-based investment firm CIM Group, mum, apparently, was the directive.
Indeed, neither a peep nor chirp emanated from CIM Group or seller Macklowe Properties, which had accrued $540 million in loans at the Park Avenue site before German lender Deutsche Bank filed for foreclosure back in August 2008.
But one day before word of the deal trickled down to The Wall Street Journal, the otherwise cool-as-a-cucumber Studley powerhouse Woody Heller was struggling to contain his glee for having brokered the deal on behalf of CIM. Indeed, reader, a faint smile seemed to cross his face while relaying the news to a reporter.
“I’m announcing that I was the sole broker involved in the transaction, but I’m not saying anything about the transaction itself,” said Mr. Heller, who during an hourlong interview with The Commercial Observer honored his word by not divulging details, but did let slip that he had bought his longtime girlfriend a substantial piece of jewelry as a closing present. “What I can say is that it was one of the more complicated transactions we’ve ever worked on.”
Combined with the Dec. 31 sale of 515 Madison Avenue-a deal that faced more than a dozen obstacles over two years of negotiations-Mr. Heller’s latest string of transactions has positioned the Studley executive managing director as a master at closing eyebrow-furrowing deals. Indeed, as a two-time recipient of the Real Estate Board of New York’s prized “Most Ingenious Deal” award, the New York City native has become a solver of complicated problems for real estate investment groups, including heavy hitters like Dai-ichi Life Investment Properties, Vornado Realty Trust and SL Green, among others.
During his tenure at Studley, which began in 2003 and has included the complicated sale of notes and a mortgage at the Chrysler Building, Mr. Heller has closed more than $6.5 billion of asset and note sales transactions, comprising an estimated 33 million feet, according to his bio.
“For some reason complicated deals seem to find me,” said Mr. Heller, 50. “It’s a good and a bad thing.”
With the sale of 515 Madison Avenue, in particular, Mr. Heller closed a deal that, by his own estimation, had nearly as many moving parts as it did tenants, chief among them a rapidly torpedoing economy and a leasehold with only 20 years remaining that was seen as a risk to potential lenders.
Mr. Heller said his work began when two large tenants at the 42-story building announced in January 2008 that they had outgrown their offices and intended to leave, a move that created 100,000 feet of vacant space.
The decision unearthed a number of challenges, including a need for major repairs and renovations that had gone unanswered, in part because each of the exiting tenants gobbled up space in the building as it became available over the years, Mr. Heller said. But because of the ownership structure, Mr. Heller added, the onus for all repair work was on the operating leaseholder alone, an agreement that must have looked more attractive to the other three entities involved than to the party actually stuck paying the bill.
“The ownership structure was effectively broken and had to be recast in order for the right thing to happen to the building,” recalled Mr. Heller, who said further complications arose when a silent partner lost his fortune as an investor with Bernie Madoff.
In the end, the ownership structure would be recast several more times before, in early 2009, entities led by the powerful Malloy and Sheffer families agreed to sell a majority interest of their fee and senior leasehold positions, thus finalizing one of Mr. Heller’s most complex deals.
“We didn’t close the deal until the end of December because we had to finish the improvements, we had to finish leasing and we had to get the financing in place,” said Mr. Heller of the rabbit hole of a real estate deal at 515 Madison. “So it was a long series of events and checkers that had to all fall into place before we could get it all done.”
AN ACCOMPLISHED MUSICIAN and composition writer who began playing the piano at age 6, Mr. Heller has a knack for creativity without the flakiness often associated with artists. A writer of ballads as a teenager, Mr. Heller had initially envisioned a career in composition before coming to terms with the financial hardship that typically looms for such musicians.
“I was worried that it might not result in a positive livelihood, so I thought I should pursue something where I had a better chance to be able to eat,” said Mr. Heller, a music major in college and the son of noted art dealer Ben Heller, who is known in artistic circles for his extensive collection of Jackson Pollock and Mark Rothko paintings.
His decision made, Mr. Heller began interviewing with brokerages and soon found work in 1981 at Jones Lang Wootton after his acquaintance, and one of the firm’s high-ranking executives at the time, Peter Sharp Jr., offered him a job. He departed in 2002-three years after the company merged with LaSalle-for a position at Insignia/ESG, the market leader at the time.
Upon leaving Insignia one year later, after its acquisition by CB Richard Ellis prompted a contractual overlap, Mr. Heller schlepped four blocks north to Studley, where he, a colleague, an assistant and his talented young protégé, Will Silverman, took over the firm’s Capital Investments Group.
“He’s my favorite human being, which my girlfriend doesn’t appreciate,” Mr. Heller said of Mr. Silverman, who entered the real estate industry in 2002 after a brief stint as an investment banker at JPMorgan Securities. “I believe he’s an unbelievably gifted human being-in so many ways. God bless having put him in my path. He’s the partner that I’ve always wanted to have.”
But where Mr. Heller describes his protégé as a naturally gifted extrovert who tends to light up a room, his assessment of his own personality is a bit more modest. While touting his integrity and presentation skills, he also acknowledged his tendency to be more introverted than Mr. Silverman.
“Everybody likes Will,” Mr. Heller said playfully, before adding, “I’m not sure everybody likes me. That’s just more his personality than it is mine.”
Mr. Heller also spoke highly of his entire team, in fact, saying that, not unlike with his clients, loyalty is key.
“Whatever you need, forever,” he said of former and current colleagues and by extension many of his clients. “I’m yours. And that’s always been the deal with everybody I work with. Period.”