As more sub-prime problems increase with average borrowers, how are the big guys doing with their own versions of heavy borrowing and real estate leverage?
Harry Macklowe, the legendary New York developer, comes to mind.
As we remember he cunningly bought his trophy, the GM Building with its breathtaking views of Central Park, for 1.4 billion in 2003. That was a record price, by the way.
Then this Midas man, who is also well known as a difficult contestant in yachting circles, saw this magnificent landmark double in value, almost overnight.
Of course, that didn’t just happen by accident.
The creative Macklowe came up with the brilliant idea of putting an Apple Store underneath the building’s plaza, which turned out to be eye candy for staid New Yorkers who are usually not so easily impressed.
Now Macklowe’s in trouble again.
This time his critics aren’t so sure he’ll bail out. And not only is he in danger of losing the GM prize, but he may lose it all, including his extensive art collection and his yacht, aptly named ‘Unfurled’.
49 years worth of legendary deal-making and fortune are literally hanging in the balance.
Devin Leonard has a step-by step article outlining how this giant’s latest colossal deal went wrong. It’s riveting reading and I guess it’s also a cautionary tale of sorts.
Will Harry Macklowe land on his feet this time? Or will his sub-prime borrowing do him in in the end?