Brooklyn, NY – Abe Goldstein, a real estate developer from Williamsburg, Brooklyn managed to turn an initial $1 million property investment into $150 million with patience and a little bit of luck.
In a phone interview with the real estate magazine, The Real Deal (http://bit.ly/VgUZ4V), Goldstein said he decided to hold on to his family-owned building in Soho at the corner of Spring Street and Broadway even during the real estate boom because he was confident the value of the property would increase over time. “We really felt the building would go up in price,” Goldstein said. Early offers on the building started at $85 million.
The building at 529 Broadway was originally purchased by Goldstein’s father, Zoltan, around 1980. The Goldsteins set up their family wholesale and retail hosiery store in one part of the building, and rented out the rest of the property to tenants. When Goldstein’s family closed the business in 1990, they retained their commercial tenants and opted not to sell the building.
Beginning in 2005, Jeff Sutton, a wealthy retail owner with property investments worth close to $2 billion, sought to net lease the building from Zoltan, but to no avail. Later, other retailers like Zara, Microsoft, Michael Kors, Nike and Adidas contacted Abe Goldstein about leasing the building, but he, too, refused to budge.
Last December, after much persistence on the part of Sutton, Goldstein sold the building to him for a record-setting $150 million for a property in Soho. The building has approximately 43,888 square feet of developmental rights. Records show that the sale price yields a staggering figure of $3,418 per developable foot.
Goldstein said the key to the successful sale was skipping the contract and immediately heading to closing. “There are so many contracts made in New York City, and until the closing, it takes this and that, and there are a lot of fights. I wanted to sleep at night. Let’s go straight to closing,” Goldstein said. “It was my idea and it worked.” Goldstein also avoided paying higher capital gains taxes by closing before the end of 2012.
After some haggling, the new owners agreed to Goldstein’s terms. They have decided to demolish the existing building and develop a new two- to five-story structure, depending on the needs of its future tenants. Sutton and his crew are looking to rent the premises to some of the retail giants who initially wanted to lease the building, and plan to charge between $1,200 and $1,500 per square foot.