The Man They Love in Chicago
Tom Acitelli Aug. 2, 2011, 8:54 a.m.
It was during the early mornings and late nights of cold, cold February that the black cars dispersed, hauling hefty stacks of leases through the Holland Tunnel, up the Henry Hudson Parkway, all the way across Interstate 495, to at least 12 insiders.
The drafts, updated three times and delivered in real time, were rushed with purpose to Bruce Mosler at his apartment building in Manhattan and to homes in Westchester, Long Island and New Jersey, where lawyers working for Vornado Realty Trust strained to keep eyelids from closing.
For Josh Kuriloff, a vice chairman with Cushman & Wakefield, the livery cars sped 30 miles east to his home in Port Washington, arriving at times as early as 4 a.m.
“We basically, for 20-some-odd days, worked around the clock—for the first time, I felt like an investment banker, almost like we were working on an M&A deal,” said Mr. Kuriloff, who later added in an email, “I would not want to know the black-car bill, as this was going on for three drafts of the lease.”
The sudden deadline—which, yes, Mr. Kuriloff met—was the culmination of nearly two years of lease negotiations between New York University and the owner of 1 Park Avenue, Murray Hill Properties, that eventually ballooned to include Vornado and more than 20 debt holders and servicers.
Before that final deal—which earned Vornado a 95 percent stake at 1 Park, Murray Hill the left-over 5 percent and N.Y.U.’s Langone Medical Center new offices—talks collapsed three times, even as N.Y.U. officials watched their office space grow from an initial 385,000 square feet to a notable 419,741 in only 18 months.
Some of the most frustrating hurdles came from the asset itself. Acquired by Murray Hill at the height of the market, 1 Park was still cash-flowing in 2009—but just barely. When a big tenant, Siegel & Company, announced its intentions to relocate, Mr. Kuriloff and his colleagues feared that special servicing was in the cards.
With the blessing of N.Y.U. officials, the Cushman team structured a new deal that would have ensured enough cash-flow to service all debt at the building. When that failed, they waltzed away, only to return to Murray Hill when the asset went into special servicing. The Cushman team briefly considered arranging the purchase of the mezzanine debt, but after N.Y.U. balked, they walked away once again.
Still, when an investor purchased the debt months later, the talks resumed, only to end in another false start. But when Vornado arrived in late 2010—with an investment offer that hinged on N.Y.U.’s cooperation—the Cushman group saw in those plans a possibility.
For the strategy to work, it all had to happen yesterday. If the ink didn’t dry within 30 days, Mr. Kuriloff said, Vornado would be in debt to as many as 26 players, ranging from debt investors to special servicers and even mezzanine and banking constituents.
“I can tell you that I’ve never closed a 400,000-square-foot lease in less than 30 days in my entire career,” Mr. Kuriloff, 52, said. “Nor, probably, has Bruce Mosler. And we’re going, ‘This might be impossible, but let’s try to do it.’”
Still, for Mr. Kuriloff, a seasoned real estate veteran who, among other major deals, brokered Citigroup’s 176,000-square-foot lease at Bloomberg Tower, perhaps the most worrisome aspect of the N.Y.U. negotiations, beside prioritizing the issues with rapid-fire dexterity, was protecting his clients.
“We were sitting there going, ‘What if we go through this lease negotiation, with these legal fees and engineering fees—and squeezing something that should take four or five months into 20 days—and, for whatever reason, Vornado doesn’t close the deal?’” Mr. Kuriloff recalled thinking at the time. “I mean, we’re going to look horrific.”
If ever there was an assignment that provoked horror, however, it was his work with Willis Group Holding that Time named among the top 10 worst building-name changes in U.S. history and that The Chicago Tribune distilled into the inspired front-page headline, “What You Talkin’ ’Bout, Willis?”
Yes, Mr. Kuriloff was the broker who successfully name-changed the Sears Tower—which, at 1,451 feet, remains the tallest asset in North America—on behalf of his client, the London-based insurance broker. Chicagoans, he said, have never really forgiven him.
As he describes the Willis deal, he and his colleagues initially had no interest in the iconic skyscraper, viewing it as less forward-thinking than what Willis had in mind. Yet, as a joke, Mr. Kuriloff suggested to a leasing agent that they would consider a transaction only if the asset’s owner, a group that includes the Chetrit Group and the Moinian Group, agreed to change the name to Willis. To his surprise, the agent didn’t balk.
“We looked at the agent—we were in the lobby—and we say, ‘I’m sorry, but we’re not going to look at the space,’” recalled Mr. Kuriloff, who continues to seek out naming rights for Willis, which he still represents on a national stage. “And jokingly, I say to him, ‘Unless, of course, you want to name the building Willis Tower,’” he added. “So he says, ‘I think you should look at the space. We’ve been talking with the landlord about maybe renaming the building or getting rid of the name Sears Tower.’”
In the end, the transaction involved the leasing of 140,000 square feet—in other words, a mere 3 percent of the 4.5-million-square-foot building. Nonetheless, the name change caused a furor in the Windy City.
But for the New York native behind deals for Alvin Ailey, Metropolitan Life Insurance Co. and Revlon, the uproar in Chicago hardly registered.
“Who is this Josh Kuriloff from New York coming to Chicago and ruining our icon, and who is this Willis and how do they have this audacity?” Mr. Kuriloff said. “I mean, the blogs were having a field day! It was hilarious.”