What are some of the biggest real estate wins you have seen or heard of. I am talking biggest discount to market on a purchase. Biggest value add on a redevelopment or a development project.
One of the ones I heard of was the site and entitlement development of the hudson yards site. The project started as if I remember the discussion correctly a roughly 100K purchase cost. Before it started to go vertical the project has balloned to a valuation of over 1B. Reaping a 10,000x return.
Bumping. Would love to hear some stories.
Sterling Organization made a $55m (100%) profit in a single day. Bought a LA retail property and sold it the very next day. Really bizarre. Gotta be one of the highest IRR transactions ever
https://commercialobserver.com/2018/03/sterling-flips-high-end-rodeo-drive-property-in-110m-sale-to-lvmh/
That is a pretty impressive return for the time period for sure. The only thing I think can compare are high equity acquisitions where the deal sponsors put in zero cash. But those are an astronomical rarity in this kind of deal size.
Can you explain more what a transaction like this would look like or when this deal structure may typically be used ?
Working on a pretty big "win" rn.
Our client put a decent-sized MF project under contract back in 2019 before the developer had broken ground. They closed on the deal this year after it had stabilized for the contract price of ~ $20M and had an offer in hand a month later at $40M. Probably the easiest $20M they'll ever make.
I’m 99% sure that Hudson Yards story is a urban legend. Major development sites were owned by MTA and auctioned off. Can’t see neighboring dirt, or any dirt in Manhattan, going for $100k in the last 50+ years.
Not to mention the entitlement costs on a site like that are well into the double digit millions easily
It was for the development rights, not for the land itself. This was back in a time when people thought it would be impossible to actually build there. I heard this directly from the project lead at Related Co.
What fund was behind it?
I don't recall who kick started it but I do remember at some point that Yahoo was involved in the development project.
One of the biggest wins ever has to be the Lowy family selling Westfield to UR from a back of the napkin deal at the height of retail speculation….. one of the most underrated highway robberies in history
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Walt Disney buying up all the land for Walt Disney World near Orlando, and not getting caught or detected. It's an amazingly cool story.
Similar story for 432 Park Ave (I'm pretty sure it was 432 Park, but honestly applies to a lot of skyscrapers in NYC) where the guy was able to secure air rights from all his neighbors without each other knowing. If one caught wind of what he was doing an alerted the others he either a) would have seen prices skyrocket, or b) gotten frozen out since the neighbors might not want a 1,500 ft. tower right next to them. But he managed to get it all in the end.
Not anything major, but I had a case study in my MBA based on a real company's development site, and on the CEOs desk (it's a family office) was a trophy from the bank doing their permanent financing. They had a ~$150m perm loan take out a ~$70m construction loan. That's a pretty sick deal if you ask me.
Almost positive the Hudson Yards story is an urban legend, or at least such a distortion of what the true TDC was as to be meaningless. For example, the decking built over the rail yards was insanely expensive; I could absolutely see that the Related paid $100,000 for the air rights but also had to construct the base necessary to actually monetize them - in which case they probably spent a couple billion dollars getting the site ready to go vertical.
99.9% of the time, when someone tells you something that sounds unbelievable... you probably shouldn't believe it.
Biggest win I can think of is JDS' renovation and conversion of Walker Tower. Actually, thinking on some others, there seems to be a pattern where developers have a huge, "could retire on this" kind of deal and then keep spinning the wheel until they lose most of it.
The project manager went trough the entire story leading upto their involvement in the project. It was close to a 30 year ordeal before that. There have been plans to develop the site going back as far as the late 80s early 90s. I was blown away by the time it took to actually get the project moving. The platform itself was incredibly expensive and intricate to get done, but the numbers I was talking about were pre Related Co. I would immagine the story had to be at least mostly accurate given that this was a presentation that was given at the Harvard real estate weekend event.
Yes, well I seem to recall (having been a younger New Yorker at the time) that the whole site was meant to be dedicated for New York's Olympic Bid for the (2012?) Olympics.
And having not seen the presentation, I obviously can't speak to it's accuracy or lack thereof, but if the argument is "where did a city-sponsored rezoning create the most value for developers" then you'd have to start throwing some waterfront Williamsburg into the mix, or some other major rezonings that helped long time owners.
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Green point ?
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