Generally, when a billionaire swaggers into New York City, his pockets overflowing with bullion and his eyes bulging with real estate fever, he ends up buying some very large, very glamorous testament to his grandiose sense of self. Perhaps a crash pad at 15 Central Park West. Or a penthouse at the Plaza. He doesn’t, however, tend to make seemingly responsible, non-egomaniacal investments in vanilla office buildings in the less fashionable far reaches of midtown.
Unless, that is, he’s Carlos Slim Helú.
Mr. Slim may well be the richest person on earth—Forbes estimates the telecom magnate’s wealth at a staggering $53.5 billion—but his real estate interests seem surprisingly grounded.
Last week, Observer.com broke the news that Mr. Slim is in contract to purchase 417 Fifth Avenue, an 11-story office building between 38th and 39th streets, for $140 million. That’s a steep discount from the $250 million that Joseph Moinian and Goldman Sachs dropped on it during the real estate boom.
While $140 million may seem like a lot of dough, it actually represents a conservative investment for a grotesquely loaded non–New Yorker with little apparent experience in New York real estate (aside from owning a note backing the former New York Times headquarters). Were he to follow in the steps of his fellow foreign gazillionaires, he might simply drop $37 million on a pad in the Time Warner Center like Russian oligarch Andrei Vavilov; or $18 million for a condo at 15 Central Park West like the South African Kerzner clan; or $846 million in 1989 cash for control of Rockefeller Center and Radio City Music Hall, among other midtown trophies, like the Mitsubishi Estate Company of Tokyo.
Mr. Slim’s pending acquisition stands out precisely because it doesn’t seem quite so rapaciously obsessed with status. Rather, it seems to bespeak an actual interest in real estate.
“At the end of the day, why would you want to go into a high-profile asset in a bidding war?” asked Roxana Girand of Murray Hill Properties, which once owned the same building. “This is a long-term hold. There’s no reason why he wouldn’t do such a thing. I think he’s a very wise businessman. He knows what he’s doing.”
“Just because you have the money doesn’t mean you want to piss it away,” agreed Brian Ezratty, a sales broker at Eastern Consolidated. “It’s not so glamorous, but you know what, not every investment has to be glamorous.”
What is it, then?
It’s an 11-story Sullivan-esque Greek Revival that stretches from 38th to 39th streets, with extensive frontage along Fifth Avenue and three corresponding lobbies. Its ground-floor retail is mostly empty, but desirable, with 14-foot ceilings and proximity to Lord & Taylor. And its office space is well leased, with occupancy at a solid 97 percent, according to real estate database CoStar. If Mr. Slim closes the deal, he will be landlord to, among others, Atari, Marvel Comics and BLDG Management owner Lloyd Goldman, perhaps the city’s largest private individual landlord.
In short, it’s a responsible, vanilla investment by a very, very wealthy man. Which may well explain how he got so wealthy. And why he might get even richer over time. Maybe even in New York real estate. According to a source familiar with Mr. Slim’s strategy, he is scouring the Manhattan market in search of similarly advantageous real estate opportunities.
“If you’re buying in at the right price and you can see a return, why not diversify and own some real estate?” asked Mr. Ezratty.
Good question.
drubinstein@observer.com
