Meet The 10 Family Dynasties That Rule New York Real Estate

Meet The Family Dynasties That Rule New York Real Estate

ADAM PINCUSTHE REAL DEAL OCT. 3, 2013, 4:33 PM 4,591 4


Seymour Durst and his brothers built six Manhattan buildings in a 12-year run. Paul and Seymour Milstein built 10 in about the same amount of time. And Lew and Jack Rudin built 11 in two decades. The breakneck pace of development — which was largely clustered in the 1960s and the 1980s — by those three families, and a slew of others, laid the foundation for many of New York City’s most established real estate dynasties. (Think Tishman, Fisher, Malkin, Resnick, LeFrak, Rose, and Zeckendorf.) Indeed, after passing down their real estate portfolios from one generation to the next, many of those families are sitting on bricks-and-mortar fortunes today.This month, The Real Deal looked at New York City’s top 10 real estate dynasties — those that stretch back a minimum of three generations and are still active. Then we ranked them by how much they own, and how much net operating income, or NOI, their New York City properties throw off each year — an estimate done by analyzing tax figures from the city’s Department of Finance. (We did not include additional business, such as property management, brokerage, banking, and condo development.)

Each of the 10 families has taken slightly different paths, but all have remained significant Manhattan landlords or developers — even as aggressive real estate investment trusts like SL Green Realty and private firms like Related Companies have muscled into the business and soaked up a lot of the recent limelight.

And they’ve faced big decisions along the way. Each family has to decide how much of its income to direct toward new — and by definition, risky — projects, and how much to pay out each year to family members.

Douglas Durst, chairman of the Durst Organization, said the income from his firm’s buildings is directed into individual corporations, which then distribute the funds to shareholders.

“The shares of the corporations are owned by the [family members’] trusts,” Durst said. “The corporations run the buildings. And they decide how much money has to go into the buildings or new ventures [and how much gets] distributed to the trusts.”

These dynasties have created several billionaires, but not without drama through the years. The second generation of Milsteins split the family fortune into two companies; the Fishers lost a senior partner in a tragic plane crash, and the Dursts are estranged from one family member, who was tried (and acquitted) of murder.

“All these are families that have shown they can stand the test of time,” said Bill Rudin, CEO of Rudin Management. “[Although] everybody has little bumps along the way, all are committed to New York.”


The Real Deal

While owning big buildings can be an ego boost, square footage is not the sole factor in how much money family businesses make. The leverage on the building, the rents, and the building’s expenses can be far more important in determining a property’s success.

Tishman Speyer — which was founded in 1978 — knows about that success. The company placed No. 1 on TRD’s ranking with an estimated $568 million in NOI. It was followed by Rudin, which had an NOI of $315 million. The top five was rounded out by Durst ($287 million), Malkin ($179 million) and Fisher Brothers ($162 million). While some of the firms commented for the article, none of them confirmed or commented on the NOI figures.

Each family has its own strategy for directing its income. For example, the Dursts tend to hold onto their properties’ cash flow, while the Speyers distribute much of theirs to partners.

Of course, for a family to increase its real estate holdings means having to decide whether to diversify with equity and debt investments, own brokerage companies, or stick with the more-straightforward strategy of developing and owning real estate.

Richard Anderson, president of the New York Building Congress, the construction trade organization, said all of these families have been successful because they’re generally cautious. “They invest strategically after careful consideration,” said Anderson.

While most of the firms ranked by TRD appear to derive the bulk of their New York City income from existing buildings, two firms do not: Rose Associates and Zeckendorf Realty. Those two firms were difficult to assess because they rely more on brokerage and development than on traditional own-and-hold revenue-producing properties. Unlike the other families ranked here, both firms also work in the third-party brokerage business.

Few of the firms on this list have maintained the furious pace of the development that their founding generations jump-started their businesses with, but some of them are incredibly busy today. Durst has been among the most active, having completed five buildings since 1999, with three major projects underway.

Meanwhile, other firms have long been operating under-the-radar with few new projects, but are now reentering the development game. For example, Fisher Brothers — which has attempted several projects in the last decade to no avail — now has six projects moving ahead.

Family friction

Of course, making a family business work requires families to get along.

Thomas Elghanayan, one of three brothers who started the large residential rental firm Rockrose, knows that all too well. Rockrose split up in 2009, with Thomas and his brother Frederick creating an offshoot company called TF Cornerstone and his brother Henry keeping the Rockrose name with his own son, Justin.

“You’ve got to like each other. You spend a lot of time together, with a lot of friction. And you’ve got to be able to compromise and not feel like you always got to have your way, and not feel bad about that,” said Elghanayan, TF Cornerstone’s chairman.

Indeed, many of the companies that TRD ranked have also seen their own splits.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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