The 24-7 Deal-Maker: RXR Realty Leasing Director Willam Elder Can’t Stop, Won’t Stop
Al Barbarino Feb. 19, 2013, 10 a.m.
Following RXR Realty’s $700 million acquisition of 450 Lexington Avenue last year, six of the firm’s top executives met with sellers Daniel Saliba and Mark Troy of Istithmar World Capital for a closing dinner at Lavo, the Italian restaurant on Manhattan’s East Side.
A round of toasts that evening, most agreed, was in stark contrast to the prolonged rent dispute that had characterized Isthimar’s relationship with Davis Polk & Wardwell LLP, a clash that had extended for the better part of a year.
Mr. Elder, also director of leasing at the firm, took the lead in the leasing of 870,000 square feet of office space across RXR’s New York City portfolio in the fourth quarter of 2012, led by the 643,000-square-foot, 15-year Davis Polk lease.
The firm signed the contract to purchase 450 Lexington on a Thursday morning, and round-the-clock negotiations had sealed the lease with the law firm by 10 p.m. that Sunday, said Scott Rechler, RXR’s chairman and chief executive officer.
“It was one of those intense in-the-trenches negotiations,” Mr. Rechler said, recalling Mr. Elder’s grit and determination during the negotiations. “Bill is a 24/7 guy, and he brings that level of energy and focus. He has a constant pulse as to what’s happening in New York City, and I see that in the emails I get from him every morning at 5:30 a.m.”
Mr. Elder’s hobbies include squash, skiing, “a little bit of hunting”—and real estate. He probably lists real estate as a hobby because he tells the tales of his firm’s acquisitions like he’s flipping through the pages of a Choose Your Own Adventure real estate book.
“Every building has a unique story, and they all are great stories,” he said. “But not every piece of real estate in New York is for us. It’s got to have the right story.”
The story at 450 Lexington Avenue was two years in the making, with RXR taking a roughly $300 million mezzanine position in the building in the early part of 2011, and reaching a verbal agreement with Mr. Saliba and Mr. Troy in the spring of last year, culminating in the early-summer signing of the contract.
“We’d always liked the asset, and little by little we were trying to get Istithmar to sell to us,” Mr. Elder said.
Now, RXR, which has scooped up office properties aggressively since New York City began to crawl back from the so-called Great Recession, is buying the 21-story, 1.2-million-square-foot 237 Park Avenue for a reported $800 million.
The deal comes on the heels of the firm’s signing last month of a 99-year triple-net lease at British department store tycoon Mohamed Al Fayed’s 75 Rockefeller Plaza, where RXR plans to undertake a roughly $100 million capital improvement project to reposition and redesign the building after Time Warner moves out in 2014.
The renovations, which are being overseen by Kohn Pedersen Fox Associates, will include a new lobby and a restoration of its landmarked classic limestone façade and is expected to be completed by the third quarter of 2015.
“To have the opportunity in a lifetime to buy that is rare and exciting,” Mr. Elder said. “We have from today through the summer of 2014 to really thoughtfully plan out all the different elements of the renovation.”
RXR’s post-recession buying spree is nearly unmatched in recent memory—one bold statement after another, starting with the $920 million acquisition of the 19-story, roughly 2.5-million-square-foot Starrett-Lehigh Building at 601 West 26th Street in 2011.
One of Manhattan’s 10 largest office buildings, it occupies the entire square block bounded by West 26th and West 27th Streets and 11th and 12th Avenues in West Chelsea.
The building houses roughly 6,000 employees, with Tommy Hilfiger, Martha Stewart-Omnimedia, advertising firm Dentsu McGarry Bowen, Hugo Boss and Ralph Lauren/Polo among its tenants.
Mr. Elder called it “one of the most interesting pieces of real estate on the planet.”
“It’s a city unto itself,” he said. “Every day there is a prominent person who comes into the building, whether it’s a fashion model, a politician or the CEO of JCPenney—it’s all very interesting.”
Mr. Elder’s three daughters range in age from 12 to 15, and in a few days he will drive his oldest to get her learner’s permit at the DMV near his family’s home in Bronxville, N.Y. “Stay off the roads,” he joked.
The freedom afforded by a driver’s license is among the many issues swirling in the mind of the modern teenager, but it seems that Mr. Elder’s daughters aren’t spared regular passionate pep talks on the upsides of a career in real estate.
“I love to talk about work at home,” he said. “I’d love for them to at least experience the different aspects of a real estate investment and operating company. If they like it, great. If they don’t, that’s fine too. But it’s a great career.”
A graduate of Wagner College, Mr. Elder held executive positions at Reckson Realty Associates, Ruben Co., SL Green Realty Corp., Shorenstein Co. and Cushman & Wakefield before teaming up with Mr. Rechler and RXR in January 2011.
“He’s a great leader and a great face for this company in New York City,” Mr. Rechler said.
The two had previously worked hand in hand in expanding and managing Reckson Associates Realty Corp.’s six-building, 5.5-million-square-foot NYC portfolio before the firm was sold to SL Green in 2007.
“When we sold the business to SL Green, I knew I was really going to miss the daily interaction with Scott and the entire team, so I was hoping it would only be a matter of time,” he said. “I wouldn’t have left for just anybody … but Scott gave me the ability to broaden my horizons and focus on one city—New York City.”
The firm signed new and returning tenants to leases that account for more than 2 million square feet of office space in the fourth quarter of 2012, with the Davis Polk deal leading the way in the 870,000 square feet signed across its New York City properties.
In addition to Davis Polk, the firm signed Spotify to 63,000 square feet at 620 Avenue of the Americas, Dentsu McGarry Bowen to 47,000 square feet at the Starrett-Lehigh Building and Knoll Inc. to 47,000 square feet at 1330 Avenue of the Americas.
“I enjoy the leasing part of the equation the most, and that’s where I tend to spend a lot of my time,” Mr. Elder said. “It’s not just figuring out the economics and executing a deal.” It’s also spending time with tenants and brokers, Mr. Elder explained—and understanding the market, and lending, and financing underwriting and compliance issues, and allocating amenities, and problem solving. To be sure, the list went on.
“That’s just scratching the surface,” he said.
- Reckson Realty Associates
- William Elder
- Ralph Lauren
- Ruben Co.
- Shorenstein Co.
- Scott Rechler
- 237 park avenue
- Hugo Boss
- 1330 Avenue of the Americas
- Davis Polk & Wardwell LLP
- Starrett-Lehigh Building
- Daniel Saliba
- Martha Stewart-Omnimedia
- 75 Rockefeller Plaza
- advertising firm Dentsu McGarry Bowen
- Cushman & Wakefield
- Kohn Pedersen Fox Associates
- RXR Realty
- 601 West 26th Street
- Tommy Hilfiger
- SL Green Realty Corp.
- Istithmar World Capital
- Mark Troy