UPDATED, June 2, 11.00 a.m.: At The Real Deal’s annual New York showcase last month, Corcoran Group CEO Pam Liebman said she admired Howard Lorber’s ability to “turn around and write a check” when he sees a development that would be good for his company, Douglas Elliman.
Lorber’s [TRDataCustom] willingness to invest in new projects through New Valley, a subsidiary of publicly traded Vector Group, has certainly helped Elliman secure plum assignments that have a major impact on the brokerage’s bottom line. When explaining to investors why Elliman’s revenue dipped in the first quarter, for instance, Lorber pointed to fewer new development closings, for instance.
So, what exactly is Lorber betting on and how much skin does he have in the game?
As of December, New Valley has invested approximately $206 million in real estate projects across the country, according to Vector’s public filings. Lorber did not return a request for comment.
TRD’s analysis of the filings shows that the firm had investments in more than 20 U.S. real estate projects, including 11 in New York and one in Los Angeles. Those deals were all made between 2011 and 2016, records show.
Vector’s largest investments are done in partnership with Lorber’s longtime pal Steve Witkoff. Vector has invested about $5.5 million in Witkoff’s 10 Madison Square West; $17.38 million in 701 Seventh Avenue; $25.7 million in 111 Murray Street; $27.7 million in the Park Lane Hotel; and $19.3 million in the Edition West Hollywood in L.A.
In the case of the Madison Square West property, New Valley has already recouped its investment plus an additional $22.1 million in distributions, records show.
“There’s only upside to having Howard as a partner,” Witkoff said. “He is one of my closest personal friends, not just a guy who wrote a check.” Witkoff added that he and Lorber typically put in equal amounts of capital into deals, and that Lorber’s control of Elliman gives the developers a better sense of how to price product and a better understanding of sales velocity.
The company also plowed significant equity into projects headed by Ziel Feldman’s HFZ Capital Group, including a $17 million investment into 76 Eleventh Avenue, HFZ’s mammoth condo project in West Chelsea; $13.5 million into a Tribeca condo project at 11 Beach Street; and $3.3 million into the Marquand at 11 East 68th Street.
Representatives for HFZ were unavailable for comment.
Vector also has $8 million in 125 Greenwich Street, Bizzi & Partners’ condo project in the Financial District. The partners are looking to close on a construction loan from United Overseas Bank of Singapore, said to be in the range of $500 million.
While in most instances Vector is a small partner in new development deals, that’s not always the case. In 11 Beach Street, for example, Vector holds a 49.5 percent ownership stake. In the Edition, it holds a 48.5 percent stake.
Vector Group also owns a 7.6 percent indirect interest in a 5,500-unit rental portfolio—mostly located in Baltimore County, Maryland—through a joint venture with Kushner Companies, TRD has learned. Those buildings were recently the subject of an investigation by ProPublica, which examined the large volume of unpaid rent lawsuits Kushner’s management company has filed against current and former tenants and reported on allegations of shoddy management practices. The 2012 acquisition was financed with $371 million in Freddie Mac-backed loans.
Hiten Samtani and Will Parker contributed reporting.
Correction: In a previous version of this story, TRD incorrectly identified New Valley’s initial investment in 10 Madison Square West. It was $5.5 million.
(To view more properties owned by the Vector Group, click here)