Summary of Billionaires' Row by Katherine Clarke: E-Book

SUMMARY GP

• Herausgeber: BookRix
• Kategorie: Geisteswissenschaft
• Sprache: Englisch

Veröffentlichungsjahr: 2023

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This book does not in any capacity mean to replace the original book but to serve as a vast summary of the original book.

Summary of Billionaires' Row by Katherine Clarke: Tycoons, High Rollers, and the Epic Race to Build the World's Most Exclusive Skyscrapers

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Billionaires' Row, a series of soaring Manhattan megatowers, has transformed New York City's skyline with developer-friendly policies and a gush of cash from tech, finance, and foreign oligarchs. Katherine Clarke's book tells the captivating story of how these ruthless real-estate impresarios turned a run-down strip of Midtown into the most exclusive street on Earth. The book provides insight into the world's most cutthroat industries, showing how ambition and relentless salesmanship have created a new market of $100 million apartments for the world's one-percenters. The book is filled with eye-popping stories that bring the new era of extreme wealth inequality into vivid relief.

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GP SUMMARY

Summary of Billionaires' Row by Katherine Clarke:

Tycoons, High Rollers, and the Epic Race to Build the World's Most Exclusive Skyscrapers

Billionaires' Row, a series of Manhattan megatowers, transformed New York City's skyline with developer-friendly policies and funding from tech, finance, and foreign oligarchs. Katherine Clarke's book explores the world's cutthroat industries, revealing ambition and salesmanship leading to a $100 million apartment market for one-percenters.BookRix GmbH & Co. KG81371 Munich

Title page

Summary of

Billionaires' Row

A

Summary of Katherine Clarke’s book

Tycoons, High Rollers, and the Epic Race to Build the World's Most Exclusive Skyscrapers

GP SUMMARY

Summary of Billionaires' Row by Katherine Clarke: Tycoons, High Rollers, and the Epic Race to Build the World's Most Exclusive Skyscrapers

By GP SUMMARY© 2023, GP SUMMARY.

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NOTE TO READERS

This is an unofficial summary & analysis of Katherine Clarke’s “Billionaires' Row: Tycoons, High Rollers, and the Epic Race to Build the World's Most Exclusive Skyscrapers” designed to enrich your reading experience.

DISCLAIMER

The contents of the summary are not intended to replace the original book. It is meant as a supplement to enhance the reader's understanding. The contents within can neither be stored electronically, transferred, nor kept in a database. Neither part nor full can the document be copied, scanned, faxed, or retained without the approval from the publisher or creator.

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Copyright 2023. All rights reserved.

Note

New York City's Central Park is now home to a series of supertall, ultra-thin condominium towers known as Billionaires' Row. These towers have significantly reshaped the city's iconic skyline, but the average New Yorker will likely never set foot in any of them. These gated communities, known as "supertalls," were built with the richest people on earth in mind, creating the most expensive real estate on earth. The buildings have become objects of global fascination, spawning numerous newspaper articles, YouTube videos, and Instagram pictures. The sudden emergence of these towers has transformed the Midtown skyline, despite New York losing ground to cities like Dubai and Shanghai.

Gazing up at these "supertalls" can make one fantasize about the lives within their walls, whether they are oligarchs counting their money or supermodels bathing in diamond-filled bathtubs. The real estate industry has been dominated by the Billionaire Building, backed by Saudi financiers, which has become an object of international intrigue. As more copycat supertalls rise along the same corridor, it becomes clear that the story is about the rise in global wealth and the people who work to capture it for themselves. Michel Foucault's work on power and social control, particularly the panopticon, has been influential in this area. The panopticon's design allows a single security guard to observe all inmates without revealing their presence.

This concept of power should be visible but never verifiable, as seen in the case of 432 Park Avenue. The lobby of the 432 Park condominium building on East 56th Street was designed to avoid prying eyes, creating an inner sanctum for the building. The architects installed sliding wooden pocket doors to separate the front desk area from the elevator banks, creating an anointed class. Residents would then board an Hermèsleather-lined elevator cab, which would take them up to 1,396 feet to their apartments. The story of Billionaires' Row is about money, who has it and how they spend it.

These slender towers bring together celebrities, financiers, and wealthy individuals, offering panoramic views and amenities like private clubs, restaurants, pools, and golf simulators. However, 44% of the new luxury units along Billionaires' Row remained vacant as of 2020. These homes serve as investment vehicles for the global super-rich, with some owners viewing them as a vessel for storing wealth. The story of the towers in New York City reveals the complex relationship between developers and ordinary people. Some view the men behind these towers as visionaries, pioneers, or greedy villains.

However, the true stories behind these towers are messy and filled with moments of ingenuity, fuzzy math, hubris, triumph, and despair. The world of ultra-luxury real estate development is not for the faint of heart, as it involves risks, financial engineering, litigation, and sabotage. The men behind these towers share common traits, such as risk-taking, swashbuckling, and proficiency in litigation. The real estate industry is not heavily regulated, making it different from corporate finance or banking. Developers often head privately held firms, driven by their personalities and free from the influence of public investors or corporate flacks.

Developers who persevered through the 2008 financial crisis benefited from the market's recovery, while those who waited until it was safe to return missed the wave. The Billionaires' Row corridor, a series of supertall towers, stretches along Central Park's southern edge, spanning from Eighth Avenue to Park Avenue. The book focuses on five buildings that best illustrate the themes of the Billionaires' Row story, illustrating the forces of land scarcity and global wealth creation colliding to create the perfect storm for developers. The story is based on over a hundred interviews with people who have shared their experiences in building, financing, designing, and living in these towers. This book presents the most consensus on events in the New York real estate market, based on interviews conducted in 2021 and 2022.

The author's experience as a reporter and visiting various construction stages has allowed them to access most characters. The book has undergone factchecking and allowed sources to comment on or clarify the revelations. The author aims to memorialize the dying breed of New York real estate kingpins who took big swings and risked losing everything.

PROLOGUE

The Pinnacle

Harry Macklowe and his brother Lloyd were excited to visit the observation deck atop the Empire State Building, a symbol of the city's postwar economic boom. The journey took over an hour, and the streets became increasingly crowded as the trio left Westchester and entered Manhattan. Mack, born in Brooklyn, was one of nine children born to Polish émigrés who moved to the United States in the late 1800s. He and his wife, Mack, owned a Tudor-style home in the suburbs of Manhattan. They regularly visited the city, attending productions of shows like Oklahoma!

and South Pacific, and enjoyed performers like Ezio Pinza, Mary Martin, and Ethel Merman. Harry Macklowe, a young boy, was taken to the Empire State Building, a massive office tower towering 1,250 feet. The building was immortalized by the movie King Kong and was the height of a city within a city. The Macklowes boarded a high-speed elevator to the observation deck, which was the fastest in the world at the time. However, a bomber crashed into the building's 79th floor, causing the elevator to go into free fall.

Fortunately, the sole occupant, a twenty-year-old female operator, survived. The view from the observation deck left an indelible impression on Harry Macklowe. The construction of the Empire State Building marked the pinnacle of a skyscraper boom that permanently changed the New York skyline. The boom was set against the backdrop of the postwar monetary and cultural excesses of the Roaring Twenties, a period of great economic expansion and a stock market frenzy. The architect William Van Alen and his former business partner H.

Craig Severance competed for the world's tallest building. Van Alen designed the Chrysler building, while Severance designed the Bank of Manhattan Trust Building. Despite plans to increase the height, Van Alen's secret 185-foot spire topped the building, bringing it to 1,046 feet. The Empire State Building, built in 1931, surpassed both. Harry Macklowe, a young architect, also participated in the skyrace, influenced by wealth from around the world.

PART I

Dreaming of Sky

Saving Harry Macklowe

In 2008, Harry Macklowe, a prominent real estate investor, was forced to step outside his law firm to discuss a deal he didn't want to make: selling the iconic General Motors Building on Fifth Avenue. The building, built in the 1960s by architects Edward Durell Stone & Associates and Emery Roth & Sons, was a defining example of the International Style and appealed to Macklowe's taste for architectural purity. Macklowe Properties bought the building for $1.4 billion in 2003, the most ever paid for a skyscraper in the US. Macklowe restored the building's aesthetic by removing the gold letters on its exterior. The real estate community initially scoffed at the high price, but Macklowe's ingenuity led to the creation of a glass cube at its base, which would double the building's value and mark Macklowe's entry into the New York real estate establishment.

The coup at the GM Building had stroked Macklowe's ego as an architect, visionary, and taste maker. Macklowe, a wealthy developer, made a significant investment in the GM Building after the unveiling of the Apple cube. He paid $60 million for seven apartments at the Plaza hotel, with architect Charles Gwathmey designing the home. However, his success at the GM Building led to a disastrous financial situation. In 2007, Macklowe completed a $7.25 billion transaction to buy eight office buildings from Blackstone, doubling the size of his real estate portfolio.

However, as the subprime mortgage crisis impacted commercial real estate, Macklowe struggled to secure a lender to refinance a bridge loan he had secured from lenders. He also pledged the General Motors Building as collateral for over $7 billion in debt used for the deal. As a result, Macklowe had to sell the GM Building to escape the weight of his debt. Macklowe Properties' real estate empire was torn apart, causing tension between his wife Linda and son Billy. The financial missteps led to the collapse of the company, and Macklowe was forced to sit in a conference room with Linda and Billy.

As the market turned, Macklowe and Stacom walked outside the Staten Island Ferry Terminal, looking at the General Motors Building. Stacom warned him that clinging to the building was destroying his family and reputation. Macklowe's broker, Harry, argued that it was time for him to stop, accept the loss, and rebuild. Macklowe had started as a college dropout, attending Alabama in the mid-1950s but not being accepted to Yale or other good schools on the East Coast. In the South, Harry Macklowe traveled to Alabama and returned to New York, where he worked as a trainee at Kudner, an advertising firm.

He enjoyed exploring the art galleries in the city, which featured artists like Sidney Janis and Pierre Matisse. He met his future wife, Linda, at a summer party and married her in 1959. Macklowe's mother, Charlotte, was an artist, and he inherited her interest in art and design. He later became interested in typefaces, reproduction, and illustration. At age twenty-one, he purchased his first piece of art, a graphic by Joan Miró, called Denizens of the Deep.

Macklowe, a young and inexperienced advertising executive, turned to real estate after a gallery owner allowed him to pay off a $125 piece. He interviewed several brokerage firms, including Julien Studley, which offered a higher share of commissions than salary. Macklowe began leasing office spaces to agencies and photographers, using The New York Times as a cheat sheet for potential expansion. As his business grew, he started a competing brokerage with his mentor, realtor Mel Wolf, and eventually built rental housing, hotels, and for-sale apartments. By the 1980s, Macklowe and Linda were one of the most active builders in Manhattan.

The cash from Harry's real estate portfolio allowed them to live a more luxurious lifestyle, investing in art and spending weekends at galleries. Linda and Harry Macklowe, a prominent New Yorker, eschewed stocks, bonds, and other investments in favor of accumulating a collection of internationally renowned modern and contemporary artworks. Linda attended Music & Art, Hunter College, and the New School, and later worked as a curator at Wave Hill. Macklowe's early reputation was marred by a 1985 stunt where he ordered the late-night demolition of four buildings in Times Square without a permit. The city repaid him after the New York Court of Appeals held the ban constitutionally invalid.

Macklowe's most prestigious projects by the 1980s included Metropolitan Tower, a 68-story condominium, and Hotel Macklowe, a 52-story hotel built on the former site of the SROs. Harry Macklowe, a prominent developer, envisioned Metropolitan Tower as his first architecturally significant building. He believed in a singular vision for a project and committed to his own instincts. Macklowe's philosophy was to create value in buildings and stay with them despite external forces. He often ignored advice from attorneys and advisers and made big decisions alone.

Macklowe excelled at marketing and selling lofty visions, but eventually lost the Macklowe hotel and two other properties during the early 1990s recession. His son, Billy, joined the company in 1993 and helped transform the company into a more serious operation, instituting procedures, best practices, regular meetings, and reporting. Billy was more conservative, encouraging his father to share equity risk and keep debt to moderate levels. In 2007, Harry Macklowe's comeback was marked by the deal for the Blackstone portfolio and the General Motors Building. However, in just twelve months, he lost almost everything again.

The Macklowes signed a contract to sell the General Motors Building to Boston Properties, a real estate giant headed by Mort Zuckerman. The stress of the collapse put pressure on Macklowe's relationship with Billy, who blamed him for the financial miscalculations that forced them to sell their most prized asset. Billy refused a hug from his father, and he soon moved to wrest the reins of the company from his father's grasp. Macklowe had overpaid for the Blackstone buildings, pushing ahead despite the high degree of risk. His wife, Linda, was furious and their relationship turned openly hostile In 2007, Harry Macklowe personally guaranteed financing for the Blackstone portfolio, which was later broken.

The family was all paying the price, and Billy, then forty, took over the Macklowe family enterprise. The move was partly due to his father's unpopularity among lenders, who had once been a golden boy with banks. Billy, a mountaineer, later described his father as a "peak bagger." Despite the shambolic past year, Harry Macklowe still had one ace up his sleeve: he had purchased the famed Drake Hotel on 57th Street, which was considered one of the best development sites in New York. With the right assemblage of properties, the developer could build a supertall tower without additional city approvals. Macklowe's ambitions were fuelled by his knowledge of the block and the buildings that housed the galleries he had biked past as a messenger.

The Drake, a popular disco club in the 1960s, was known for hosting Shepheards, a dance club with Egyptian-themed entrances. The hotel was a base for A-list rock stars like Jimi Hendrix and members of Led Zeppelin and the Who. In 1973, Richard Cole discovered $200,000 missing from the band's safety deposit box at the Drake. Police detained employees, band members, and groupies, but no evidence was found. The mystery was never solved.

By 2006, Macklowe bought the hotel for $418 million, making it a reliable spot for tourists and business travelers seeking affordable nightly rates in Midtown. Macklowe, with the hotel, focused on neighbors by buying townhouses and building a tower with a tower taller than the Empire State Building. The Drake project was a redemption attempt, with Macklowe obtaining a letter of intent from Nordstrom to acquire 250,000 square feet of space at the base of the new skyscraper. He received an email from Deutsche Bank's banker, Jon Vaccaro, expressing his confidence in the project. However, with his industry standing uneven, Macklowe needed to stall creditors to secure the necessary funds to build the tower.