Titans of New York Real Estate Panel
On Friday, May 6, the Center for Real Estate and Finance hosted the Titans of New York Real Estate panel in New York City. With Richard Baker '88, governor of Hudson’s Bay Company, moderating and serving as host, the panelists, William Mack, Harry Macklowe, and Larry Silverstein, provided insights into their dynamic careers and transformative projects. Each member of the panel has brought to market numerous projects over decades-long careers, which all began in brokerage. Throughout the exchange of ideas and visions for current and past projects, several overarching themes emerged: common personality traits, creative thinking, and a shared value of teamwork within marriage.
Through anecdotes and first-hand experiences, the panelists explored the characteristics that have enabled them to develop projects that have influenced the evolution of Manhattan’s skyline. Having a background in sales, overwhelming optimism, and strategic thinking were traits they attributed as being the most essential to their success. William Mack, founder and chairman of Mack Real Estate Group, discussed his strategic vision of diversifying his company’s portfolio from solely warehouses to office buildings. Although his knowledge of the office market was limited at the time, he saw two trends: first, the transition of the New York City area’s economy from manufacturing to service employment; and second, the development of suburban office buildings, which would allow more individuals to work and live in closer proximity. From this forward vision, the company began building office buildings on speculation, laying what would be its strategic path for growth several decades into the future.
Moderator Richard Baker discussed his vision of using his family’s perfected strategy of developing retail centers via option, and how he applied it to his purchases of the Saks Fifth Avenue and Lord & Taylor department store chains. This inspired the Titans to begin discussing their own innovative development strategies regarding the financing, design, and construction of real estate. Harry Macklowe, chairman of Macklowe Properties, shared the story of his current project at 432 Park Avenue. As the condo market in New York City shifted during 432 Park Avenue’s construction in 2013-14, the project began to suffer from slowing sales based on the price point requirements of potential buyers, along with a diminishing need for full-floor apartments. Rather than lowering the price per square foot, Macklowe saw an opportunity that would enable him and his partners of the CIM Group to maximize profit. Through Harry’s new strategy, the 91st through 95th floors of the building were each split into two units, one 4,400 square feet and the other 3,600 square feet.
The Titans also discussed how their spouses have assisted and provided essential feedback, support, and most of all a healthy drive for their projects and careers. Larry Silverstein, chairman of Silverstein Properties, successfully secured the management rights to the World Trade Center in July 2001. Eight weeks later, he witnessed the fateful day that terrorism touched American shores with the destruction of 9/11. Prior to that date, Silverstein had promised his wife that she could make the decisions regarding how they would spend the rest of their years. Prior to 9/11, Mrs. Silverstein had planned a lengthy yacht trip around the Mediterranean Sea, which was to take place shortly after that date. Silverstein, being a man of his word, decided to continue with the plan. However, Mrs. Silverstein was, like her husband, heartbroken over the destruction of human life and of the towers that her husband had finally acquired. She was determined to press forward with reconstruction, demanding that they undertake the task of rebuilding the World Trade Center for New York City and the world as a whole. Being equal partners in marriage and teammates in life, the Silversteins moved forward to remember the lives that were lost, and to bring the significance of the World Trade Centers back to the Manhattan skyline.
Aside from the personal and career insights previously mentioned, the Titans made sure to emphasize what they felt were essential aspects of each real estate transaction and project: financing should be non-recourse, and one should never use their own personal funds.
In closing, they impressed upon the audience that one’s personal passion can always enable them to overcome obstacles. It is in that passion, where a denial of failure surfaces, which enables one to get up off the proverbial mat when temporarily knocked down. Through the presence of these three real estate innovators, William Mack, Harry Macklowe, and Larry Silverstein, the Cornell real estate community received an exclusive and enlightening morning that is slated to become an annual event.
Among the over 200 attendees were students from the Cornell Real Estate Club and the Baker Program in Real Estate. The club incorporated the event into their annual New York City trek which is discussed in greater detail in another section of this newsletter. The Baker students attended the Titans event as the final presentation in the Distinguished Speaker Series class which welcomes guest speakers to the Cornell campus every week throughout the school year.
-Robert Latham, MPS RE '17