Daring to differ - Creative opportunism pays off for Dursts
Crain's New York Business
Three years ago, developer Douglas Durst took out a full-page ad in The New York Times to criticize the design and cost of Ground Zero’s planned 1,776-foot signature tower.
Last week, his firm agreed to invest up to $300 million in that same building and take primary responsibility for outfitting, leasing and managing it.
“Downtown has become much more acceptable to tenants,” says Mr. Durst, chairman of the Durst Organization, in explaining the about-face.
Durst’s ability to radically change course is part of an opportunistic, trailblazing approach that for years has made it one of the city’s most successful developers. Its methods have helped it continue to grow throughout a recession that has sidelined many of its rivals.
In the past year alone, the developer has been busy. Along with partner Bank of America, it not only recently completed the city’s second-tallest building—1 Bryant Park—it also refinanced the $1.3 billion property twice, despite the worst credit crunch in decades. The company also lined up a $200 million credit line to purchase distressed real estate assets and has already used some of it to snap up mortgages on two Manhattan development sites. Meanwhile, Durst and a partner bought a prewar property on Fifth Avenue for $42 million and plan to turn it into a condo.
The projects reflect Douglas and his cousin Jody’s imprint on the 95-year-old firm. Unlike their ancestors who feared messy entanglements, this third generation of leaders does not shun partners or government projects.
Under Jody, who became sole president last month after sharing the post with his cousin for 12 years, the company is expected to stay on course. Like Douglas, Jody is a man of few words, with a dry sense of humor.
In fact, when asked if there will be any major changes, Jody simply replies, “No.” When asked how his management style might differ from his cousin’s, he deadpans: “Douglas is very smart and patient. I’m just patient.”
NOT THE DONALD
In an industry long on larger-than-life characters like Donald Trump, the Dursts prefer a lower-key approach.
“There is not a boastful gene among the Dursts,” says Mary Ann Tighe, chief executive of the New York tristate region for CB Richard Ellis Inc., who has known the family for years. “That is the Durst way.”
Changing with the times is also part of the family strategy. When the Dursts, who traditionally built office buildings, decided to develop more residential towers, they knew they needed help. So in 2008, they formed a partnership with Sidney Fetner Associates, an established residential expert. Now, Durst Fetner Residential is developing an apartment house for Mount Sinai Medical Center, renovating the Fifth Avenue property and laying the groundwork for a tower on West 57th Street.
Some projects just can’t get done without a partner, insists Douglas.
“Projects are so big now, you need a partner to get the financing,” says Douglas, sitting in a 1 Bryant Park conference room decorated with pictures painted by his grandmother, including one set at her house in Lake Placid, N.Y.
Douglas credits youthful visits there with laying the foundation for something else that has become a hallmark: the firm’s early and bold embrace of green buildings. This summer, 1 Bryant Park became the city’ s first office building to be certified as LEED platinum, the highest rating for green buildings.
TIMES SQ. SWITCHEROO
In recent years, the Dursts have also won kudos for their early—and ultimately hugely profitable—embrace of Times Square. That came, however, after they had loudly opposed the government-sponsored effort to redevelop the area, just as they did years later at Ground Zero.
“They didn’t listen to our objections,” explains Douglas, who didn’t let his position stand in the way of opportunity. When the redevelopment project stumbled, Durst moved in, built 4 Times Square, and lured trendy publisher Condé Nast as the anchor tenant.
Now, with Condé Nast slated to move to the Durst-managed 1 World Trade in about four years, the family will have to scramble to find a new tenant for 4 Times Square. Douglas says he’s not worried, and many observers are not surprised.
Gary Rosenberg, the firm’s longtime lawyer, says, “This is a company that thinks about building wealth for the generations to come.”