This Month in Real Estate History

The Real DealJuly 01, 2011
1961: Final parcels of Rhinelander estate sold

The last pieces of the Rhinelander estate -- which were amassed over more than 200 years and at one time had been one of New York's great real estate fortunes -- were sold 50 years ago this month for $9 million.

Rhinelander Real Estate, led by board chairman Philip Rhinelander 2nd, signed a contract to sell 32 properties in Manhattan and Queens to a group of investors headed by developers Lawrence Wien and Harry Helmsley. At the time, the pair was on a buying spree. Indeed, one month later they announced they were negotiating to acquire the Empire
State Building.

The Rhinelander family, like the Astors, the Goelets and the Beekmans, had created a fortune buying properties in the 18th and 19th centuries. By 1908 the family's portfolio was valued at $50 million.

The family continued buying properties into the 20th century through Rhinelander Real Estate, which owned and managed the family's assets. It began selling a number of buildings in the 1940s and 1950s, and the firm was dissolved in 1961.

One of the properties the estate sold in the package was the Cammeyer Building at 650 Sixth Avenue, which in 2007 was converted to residential condos.

1931: Feds confiscate illegal distillery operated by Tishman
Federal agents seized, under Prohibition laws, a six-story industrial building, owned by Tishman Realty and Construction, 80 years ago this month. The $2 million building, located at 50 Sutton Place South, was being used as an illegal distillery.

At the time it was the most expensive illegal alcohol production facility in the nation to be seized by agents. The operation, which used a garage as a front to mask its illicit activities, could produce up to 29,000 gallons of alcohol each day and net between $8 million and $10 million a
year in profits.

U.S. Department of Justice special agents had raided it on May 22, 1931, and closed it down before the property seizure a few months later in July.

Tishman Realty and Construction -- at the time led by David Tishman and which was the predecessor to both Tishman Construction and Tishman Speyer Properties -- took ownership of the building in 1929 and had $1.8 million in mortgages on it. There was no indication Tishman was ever charged with a crime. Under federal law, the government could take properties being used to make alcohol, citing the non-payment of taxes. But it was the first time statutes under Prohibition -- which went into effect in 1919 and were repealed in 1933 -- had been used to seize property in Manhattan.

1900: Bronx apartment owners taken on over free rent
Bronx brokers and property owners suffering under a glut of housing supply battled residential
developers of small buildings who were fraudulently boosting the perceived value of their buildings with non-paying tenants, 111 years ago this month.


Brokers and landlords called a meeting that month to try and halt builders from filling newly constructed, three-story apartment buildings with tenants who were allowed to live for months for no charge.

The underhanded tactic gave building buyers and brokers an incorrect belief there was a strong rent roll, when in fact the residents would leave once they had to start paying rent.

"Fake tenants give us more trouble than anything else in the business," real estate broker John Borgstede told the New York Times that year. "Although a house may be filled with tenants, a buyer cannot tell whether or not every floor will be vacant the following month."

Development was spurred in the southern portion of the Bronx near Manhattan at the turn of the century by builders rushing to construct three-story, non-brick "frame" buildings generally below 152nd Street. Builders filed a slew of permits around that time because under a new fire code that took effect in 1899, frame buildings were to be banned in that area, raising the cost of construction.

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