How a Tiger Earned His Stripes (w/ Michael Sonnenfeldt) | Perfect Timing
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How a Tiger Earned His Stripes (w/ Michael Sonnenfeldt) | Perfect Timing


There was a part of me that didn’t want to
stay in the real estate business precisely because I was then now being compared to my
father-in-law. And I wanted to go out on my own. So, creating a technology and an information
business would have allowed me to completely distinguish myself. And when that crashed and burned, I realized
in a sense, that I had to go back to figure out what were my strengths. We found ourselves about four or five years
in having 99% of our net worth tied up in that one project. For me, I was 29 or 30, that wasn’t such a
big deal. But when you’re 63, you start thinking about
it. And so, David really pushed to sell the project. What was interesting is when we finally sold
it, there was an interview and the interviewer asked us how long it took to sell. And I said, oh, about six months, David says,
what are you talking about? It was four years and six months. It was for sale the day we bought it. So, we had very different perspectives. He was really somebody who was a buyer and
seller, and he had achieved great success doing that. But you know, when you’re 30, and you’ve had
this extraordinary success, it’s virtually impossible to have any sense of what made
you successful, what your strengths are, what your weaknesses are. And I went off and decided I didn’t want to
stay in the real estate business, I wanted to conquer some new field, and created a business
in the real estate information. This is before the internet. Today, all the services that we created in
this online platform are available and things like Zillow and other online platforms, but
there was no internet then. And the idea was that you could look up a
property and see its history. And you could track trading prices and actually
trade financial instruments based on the database that we were trying to create. And I did that for about five years, created
the fastest growing real estate information company in the country until the day I had
to close it. Because the war in Iraq. The war occurred. And in that year, half the real estate brokers
delisted themselves, many brokers are part-time brokers. Our clients were the real estate brokers that
needed information to do their work. So, although we were gaining market share,
it was in a community where it was haft by size. And in retrospect, I’d say the biggest theme
that I’ve learned over and over again is real estate is a deal business. I love negotiating deals, I love preparing
for deals, I could probably work around the clock on deals. But when I’m finished, I need to regenerate,
I need to step back. That’s a completely different rhythm than
great managers who day in and day out, have a steady hand. So, if I were backing myself, I would back
myself much more as a deal negotiator than as a manager, because those are not skills
that I’ve excelled at. And other people don’t recognize the difference
between those two. And that’s where some of the trouble comes. But how did you deal with that failure? How did you close that failure? How did you deal with that mentally and emotionally? And how do you then channel what you’ve learned
into the next project? So, almost surely, part of my motivation was
some attraction to being a renaissance person, by which I mean a master in many different
disciplines. That’s an unrealistic goal for most people. The problem was my father had been chief interpreter
at the Nuremberg Trials, Herman Goring’s, the number two Nazi, his personal interpreter,
my father was on the American prosecution. And then to go from there to being one of
the world’s greatest engineers- colored TV, sending the first satellite up. He was Executive Vice President of NBC, a
dean of a business school. And I probably, too, started to define myself
by not wanting to just be successful, but to be multi-dimensional. So, when I sold this real estate project,
it felt pretty good to be 30 and have developed the largest commercial renovation successfully. The deal- at least by many people- was estimated
to be the most successful deal in metropolitan history. And there was a part of me that didn’t want
to stay in the real estate business precisely because I was then now being compared to my
father-in-law. And I wanted to go out on my own. So, creating a technology and an information
business would have allowed me to completely distinguish myself. And when that crashed and burned, I realized
that in a sense that I had to go back to figure out what were my strengths. And it turned out for whatever reason, a certain
type of real estate business was where I’ve been successful and where my instincts had
been developed. And sometimes, I felt like I was crawling
back to my strength. That it wasn’t where I wanted to be, but it
was where I was best able to recreate some level of success. And so, I started a new real estate firm,
it happened by then. We were in the early ’90s. And there was a savings and loan crisis in
America that had continued to extend from the crash in ’87. When my partner and I had bought Harborside
in 1982, it was at the absolute low period of that cycle. And when we sold in 1986, it was at the absolute
high period, we were very lucky. If you look back at the statistics, we hit
the low on the buy and the high on the sell, now the market had crashed again. And in 1991, in the savings and loan, the
real estate market was at a new low. And it was a fantastic time to start buying
portfolios of distressed assets. So, although it wasn’t a development business,
it was a variation of what I was doing. And something that I had a- I guess a natural
inclination to, and that started my second success, but I could never have achieved that
even greater success if I hadn’t failed in between and eating a little humble pie.

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