Monday, April 11, 2016

New York Real Estate: Before the Trumps, There Were the Wendels

Last week Forbes did a story on the current state of play and the usual suspects, Richard LeFrak, Leonard Stern, Stephen Ross, Sheldon Solow et. al. are doing-well-thanks-for-asking*:
Here's Why New York Real Estate Developers Are Richer Than Ever
And here's a bit of history from Economic Policy Journal:
The most well-known developer in New York today may be a man with national aspirations and a propensity to talk off the top of his extravagantly coifed head, but a century ago, the headlines were commanded by a real estate family with an aversion to publicity and the trappings of wealth.

In the early 20th century, the Wendels were perhaps the most powerful landlords in New York City, a dynasty with more than 150 properties in Manhattan worth over $1 billion in today’s dollars. The Wendels were the delight of the local papers, for, rich as they were, the family — six sisters and a brother, all unmarried — lived together in a shuttered mansion without electricity on the northwest corner of Fifth Avenue and 39th Street, and dressed in grim Victorian garb that had gone out of style half a century earlier. Tour buses regularly pulled up in front of “the House of Mystery.”

Douglas Durst may be one of the very few New Yorkers who remembers the Wendel name.

“I remember my father telling me about them,” said Mr. Durst, a member of the third generation of one of today’s most powerful real estate families, referring to his father, Seymour Durst. “It was very hard to do business with them because they didn’t have a telephone.”

In their day, they were known as “the Weird Wendels.” John G. Wendel II, the brother, was alternately referred to as “the hermit” and “the recluse” of Fifth Avenue.

“Of all the families floated to affluence by rising waves of Manhattan real estate values, the Wendels were the quietest and the queerest,” wrote Arthur Pound in his 1935 book, “The Golden Earth: The Story of Manhattan’s Landed Wealth.” “They lived simply on the most expensive residential site in New York City,” he continued, and “drew less fun from their fortune than a bricklayer gets out of his weekly wage.”

This account is based on articles in contemporary newspapers and magazines. Many periodicals indulged in at least a little bit of surmise, for the Wendels believed that “publicity was as demeaning as luxury,” according to The New York Times.

But unlike their personal lives, their investment strategy was an open book: Never mortgage a property; never sell anything; never pay for repairs; and never forget that Broadway moves uptown at a rate of 10 blocks a decade. Their rules for success worked: When the last Wendel, Ella, died in 1931, the family’s portfolio stretched from the Bowery to Fifth Avenue, and from Wall Street to the Upper West Side, according to her front-page obituary in The Times....MORE
*One of the bigs, Leon Charney, is not doing so well, he passed away on March 21.