Despite Record Prices, RFR Goes on a Manhattan Buying Spree

September 16, 2014 Despite Record Prices, RFR Goes on a Manhattan Buying Spree By Julie Satow Walking into Aby Rosen’s office on the third floor of the Lever House in Midtown, guests are greeted by several light installations hung above the elevator banks. They feature impish phrases like “You Forgot to Kiss My Soul” by the artist Tracey Emin, but also more provocative ones, including two pieces with vulgar language. It is, perhaps, the first indication that Mr. Rosen is not your typical, staid office landlord. Mr. Rosen, a co-founder and principal of RFR Holdings, is one of the city’s busiest developers, buying buildings across Manhattan at a time when many other players are sitting on the sidelines, waiting for prices to come down. In the past year, the developer has been on a Manhattan acquisition spree, buying a graffiti-covered building in SoHo, a low-rise building at 11 Bond Street, a Holiday Inn hotel near Canal Street, a mansion on the Upper East Side, and the six-story Church Missions House, a Flemish-Renaissance landmark building in the Flatiron district. And that is just the beginning. RFR plans to spend $250 million on Manhattan land purchases, up to $500 million on office building deals and $100 million to $150 million more on retailing properties — all before the end of the year. “It is a good time to buy great buildings — it is a bad time to buy cheap buildings,” Mr. Rosen said recently, his shock of white hair shaking as he nodded for emphasis. “We are searching for The most under-the-radar purchase was 190 properties that are unique, with beautiful Bowery, a building at Spring Street that was architecture, where we can take our brand originally built in 1898 as a location for the and add value.” Germania Bank. Mr. Rosen, 54, grew up in Germany, and he still carries with him an accent and a European sensibility. He started RFR, which has headquarters in New York and Frankfurt, in 1991 with his childhood friend Michael Fuchs. The two, both scions of German real estate families, run the firm jointly, although by many accounts, Mr. Fuchs shuns attention nearly as much as Mr. Rosen courts it. “Aby has a strong personality and a flair that is unusual in the developer community,” said Jonathan L. Mechanic, a partner at the law firm Fried Frank and chairman of its real estate department, who has worked with Mr. Rosen on several deals. Mr. Rosen, whose first name is pronounced AY-bee, is an avid art collector. He has a brash side and often speaks unfettered; for instance, he called the new condominium tower One57 “an atrocity” in the press. He is also unafraid to push taste boundaries. Married to the psychiatrist and socialite Samantha Boardman Rosen, Mr. Rosen has found himself embroiled in a few controversies, including, most recently, the decision to install a 13-ton, 33-foot bronze statue of a pregnant woman with an exposed fetus on his front lawn in Old Westbury, N.Y., an exclusive enclave on Long Island. Preservationists also pilloried him for wanting to remove a painted stage curtain by Pablo Picasso that has hung on the wall of the Four Seasons restaurant in the Seagram Building, which RFR owns, for decades. The work was removed this month, and RFR has agreed to pay for its restoration and relocation to the New-York Historical Society. While the art world may have a testy relationship with Mr. Rosen, some in New York real estate circles admire his inexhaustible acquisition appetite, especially at a time of historically high prices. The cost of land in Manhattan averaged $511 per buildable square foot in the first half of this year, a record and a 35.5 percent increase over five years ago, according to the commercial real estate company Massey Knakal. RFR Holdings has been buying properties, But these prices do not give Mr. Rosen including 11 Bond Street. pause. “We can buy something that is more expensive because we have our own capital, plus European capital that looks for longer returns,” he said. “We don’t have to get in and out quickly, and having this long view allows us to be more aggressive.” Among Mr. Rosen’s plans for the recent acquisitions, he intends to convert the Holiday Inn at 138 Lafayette Street into a 220-room boutique hotel to be designed by Space Copenhagen from Denmark, once the deal closes this year. “It will be cool SoHo,” Mr. Rosen said. Perhaps the most under-the-radar purchase was 190 Bowery, a building at Spring Street that was originally built in 1898 as a location for the Germania Bank. Developers have been trying for years to buy the six-story Renaissance Revival structure, which appears abandoned, with blocked-off doorways, boarded-up windows and graffiti covering nearly all of the lower facade. It is actually the 38,000-square-foot home of the photographer Jay Maisel, who bought the building in 1966 for just $102,000. Mr. Maisel, who did not return calls for comment, has, until now, refused any attempts to buy him out. “The building is in terrible shape. There’s no heat, Jay lives in just a small area of the building, another winter is coming, and it was time,” said Mr. Rosen, who spent six months cajoling Mr. Maisel into selling the home. “When you own a property for that long, and you are not a real estate professional, it takes a lot of convincing.” 281 Park Avenue South. RFR plans to spend Mr. Rosen, who has yet to close on the $250 million on Manhattan land purchases. purchase and declined to reveal the price, said the building could be converted for retailing at the base with condominiums above, or possibly offices or even an art gallery. “It took him just a few years to become a real estate insider, probably faster than anyone I’ve seen,” said Peter Hauspurg, the chairman and chief executive of the commercial brokerage company Eastern Consolidated. That is in part because of his ability to spot a property and close the deal quickly, according to Mr. Hauspurg. “When he wants something he can swoop in and act within a very short time period — not many people can do that with such big dollar figures,” he said. That ability is what helped RFR to acquire the landmark Seagram Building at 375 Park Avenue back in 2000. Designed by Ludwig Mies van der Rohe, it is one of RFR’s marquee properties, and recently, after some complex refinancing and the buying out of partners, the landlord is now its sole owner. RFR is beginning a $25 million renovation and restoration of the property, including a makeover of the Four Seasons restaurant where the Picasso once hung. There will be upgraded lighting, new kitchens and a modernized interior. Even the food will be rethought, “to be healthier, lighter fare, more the way people eat now,” Mr. Rosen said. RFR has also been outfitting the building — which carries some of the city’s highest office rents of $160 to $170 a square foot — with high-end prebuilt office suites, and is upgrading the lobby. There is an art consultant for tenants who want help choosing pieces to decorate their offices, as well as a florist, who can be hired daily or weekly, to create floral arrangements. Even the garage will get a $1 million investment, replete with a waiting lounge for chauffeurs, to be designed by the architect Dan Shannon of Moed de Armas & Shannon. These improvements suit tenants like Gregg Hymowitz, a co-founder of the investment firm EnTrust Capital, just fine. “It is important that people come to work happy — our offices are clean and bright, with ambience,” said Mr. Hymowitz, whose offices occupy the 24th floor and part of the 23rd. “Secondly, our investor base knows what it means coming to visit us at the Seagram Building — it is part of the branding, and Aby has done a great job of branding the building.” .

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