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Starwood Capital CEO Barry Sternlicht leads a company thatoutbid its competitors by 25% to buy Corus Bank's portfolio of 12,000condo units (plus some apartments, office, and land) for $2.7B in '09. And Starwood has already realized a $2.2B cash return. (If you ever need to buy something at auction... bring Barry.)
Barry Stenlicht, The Waldorf-Astoria on Nov. 17, 2011
At last week's NYU Schack Capital Markets conference, we snapped Starwood's star investor, who said his firm borrowed $1.3B from the government interest free for the deal and has already sold 5,000 units. The investment is now earning $100M a month. At that rate, he says, he's actually trying to convince LeFrak to slow down its sales pace. He'd also like to leverage up, saying he could borrow $400M at 40% and deliver a $240M dividend to the government, but the feds say, "No way." He does regret the missed opportunity to acquire Extended Stay Hotels, he says, but his funds just weren't big enough. As for competition of a different kind, he says China's scale of growth is unbelievable, making market studies on demand a moot point.
Mike Fascitelli and Marc Holliday at The Waldorf-Astoria on Nov. 17, 2011
We also snapped Vornado CEO Mike Fascitelli and SL Green CEOMarc Holliday. Mike says the best way to keep the Big Apple from rotting is to elect another business-friendly mayor. Marc adds that an official who spends city and state money wisely to create ataxable base is key. His firm concentrates on redevelopment playssince building new without subsidies requires $125/SF leases, which simply don't exist right now. Vornado and SL Green's renovation of280 Park, for instance, will create a world-class property at a lower basis than if they started from scratch. A sign of the city's resilient tenant base, Marc says, is the fact that five of 10 SL Green tenants are both renewing and expanding, three are renewing, and only two are shrinking.
Bill Rudin and Thomas Braziel at The Waldorf-Astoria on Nov. 17, 2011
Rudin Management CEO Bill Rudin (with Columbia University'sThomas Braziel) says this is a city of immigrants and should build on that advantage, finding a way to hold on to the students who come to college here, paraphrasing Thomas Friedman: "We should have a tall fence but a wide gate."
Larry Silverstein at The Waldorf-Astoria on Nov. 17, 2011
Silverstein Properties CEO Larry Silverstein says yes, taxes and construction costs are too high, but whatever this city is doing, it's doing pretty well, considering global leaders all want to invest in America, specifically NYC. Larry says the lease-up at 7 WTC was interesting to watch. Sure, 850k SF of the 1.7M went to financial services (most of it to Moody's), but the rest of the tenancy is diverse, from science companies to law firms, even a company from Youngstown. When asked what keeps him up at night, Mike said he wished there was something that would. Related CEO Steve Rosshas been sleeping quite well following a trip to Southeast Asia. And Larry said that at 80-years-old, there are multiple causes. (If onlyEstelle Getty were still around—we'd love to see a battle of wits between Larry and Sophia.)
Bill Mack, Steve Ross, and Jimmy Kuhn at The Waldorf-Astoria on Nov. 17, 2011
AREA Property Partners Bill Mack, Steve, and Newmark Knight Frank prez Jimmy Kuhn. Bill wants the city to concentrate on education, healthcare, publishing, and communications as growth centers (psst: That translates to jobs and cubicles and office space). Steve says there's opportunity in the city's expansive stock ofobsolete buildings (Larry calls it "antiquity"). Corporations are looking for large blocks of space into which they can consolidate. He means places like Downtown and, of course, Related's Hudson Yards, two rare large blank slates of land.
Warren Fink and Joe Moinian at The Waldorf-Astoria on Nov. 17, 2011
We also snapped Carlyle Development Group COO Warren Fink andJoe Moinian.
Rob Blumenthal, Jeff Barclay, and Robert Ivanhoe
And here's Deutsche Bank Securities managing director and NYU Schack prof Rob Blumenthal, Goldman Sachs managing directorJeff Barclay, and Greenberg Traurig global real estate chair Robert Ivanhoe. Robert just happens to be speaking at Bisnow's New York Post-Recession Projects event on Dec. 8 at the NY Bar Association, along with Gibson Dunn's Andrew Lance, Gotham Organization'sMelissa Planko, and LePatner & Associates' Barry LePatner. Sign up now!