The recent brisk real estate environment has seen many young developers enter the development arena, trying to make a statement (and a profit). Some have succeeded more than others. Some have a vision and a drive more powerful than others. Alex Sapir has impressed me as one who’s passionate drive, vision, and tolerance for risk will set him apart from the rest. As President of The Sapir Organization, he is currently developing downtown Manhattan’s two most iconic and largest projects. We met for lunch in Soho and enjoyed a conversation about a number of topics. I hope you find his ideas and story as compelling as I do:
Shaun: Where do you live?
Alex: Hudson Street in Tribeca.
Shaun: You could live anywhere in the world. Why have you chosen to live downtown Manhattan?
Alex: First of all, New York is by far the greatest city in the world. New York has something to do anytime of the day for anyone in the world. It’s the financial capital of the world, one of the entertainment capitals and it’s the world’s melting pot. People from all over the world come here for a reason – this is the world’s greatest city. People can make a life in New York they couldn’t make anywhere else. That’s why New York is so magical. I look at my father who came from the former Soviet Union and knew that he had to go to New York. He didn’t say “I have to go to Chicago”, he didn’t say “I have to go to LA”, he didn’t say “I have to go to Miami”, he said “New York”. In the former Soviet Union they said New York was a city where the streets were paved with gold. There’s a reason they were saying that. If you look at New York City history, it’s had its downtimes, but compared to the rest of the world it’s really been a city in its own league. There are few cities in the world (London in the last couple of years, and Paris) that offer what New York has, and it’s a 24 hour city. I think the most energy anywhere in the world is happening in Manhattan, and Downtown New York City is by far the most vibrant exciting place to be.
Shaun: You talk about New York and the history of New York and the fact that it’s always been in international melting pot and destination. Where do you see New York 10 years from now?
Alex: I see it with a continued growth. I think that one thing financial services have provided is its innovative way to create new products and keep being innovative across-the-board. Wall Street is what drives New York. Wall Street is what drives the economy. So I think whatever downturn we’re seeing right now, we’ll figure out how to be innovative and create new products and create new ways to drive the economy again. I see New York only continuing its growth. There is not a bad part of New York City anymore. People remember New York City in the 60s, 70s, and 80s when there were a lot of bad neighborhoods. You don’t see that anymore. You’re going to see a really modernized city, a mega city that is not comparable and there is no other city that can do what New York can do.
Shaun: Just as New York is an innovative city, you are a developer who is innovative in a number of different ways. This is reflected in the projects you’re developing. The Trump Soho hotel condominium you are developing with Mr. Trump and Bayrock is the first of its kind downtown. It’s going to be the tallest building in the neighborhood. This has obviously been controversial, but whenever you have innovation there’s always going to be controversy. A lot of people are afraid of innovation, even though the city is famous for it. What led you to be this innovative with respect to this particular site, and build a hotel condominium?
Alex: Well, thank you. What has helped me develop as an individual is growing up in a loving family and having traveled a lot. I’ve been to so many places in the world. Some rich, some poor, and some somewhere in-between. Before the early 90s my family wasn’t poor, but we weren’t very well off, so whether it was getting in the car driving to Vancouver or Montréal, my parents always took us to different places. They wanted us to see different cultures and how different people live. I have always traveled, seeing different surroundings, seeing how people interact with each other. This has expanded my mind to want to do things in real estate. When I looked at this site in Soho with no height restriction, I realized that Soho and Tribeca downtown have been known to be cool, but have never had a luxury product to point to. There are a couple of hotels (that I won’t name) that are well known hotels, but none of them are known for their luxury. I think that the way the world has gone, with the world’s wealth being such a substantial part of real estate, we wanted to build something that was not only luxurious but in its surroundings cool. You can’t beat a luxurious product that is cool, and in a cool neighborhood. It was really the point to marry the two concepts together, and I think that’s done through design and done through the different amenities and elements that we have created. When the building is built, it will be known as the premier hotel in the city and I think it’s going to be known for being “the luxurious cool place”.
Shaun: Do you think this building will stand the test of time? How do you see this building 10 years from now?
I think in 10 years people will be talking about it just as much as today, probably more. It will be even more established and I think that it is an irreplaceable asset. I don’t think there will be any other 45 story five-star cool hotels being built anytime soon. That’s what makes Manhattan real estate so valuable. New York City has no room to expand. We’re not building any Palm islands, like they do in Dubai and Manhattan is an island. That’s why you’re seeing the outer boroughs get more expensive as well. They can’t build to meet the demand that New York City has. The need to be close to New York City is driving the outer boroughs. What’s happening in New York City is this resurgence of people that once left the city to move to the suburbs are now coming back, whether it is to live or spend two or three days out of the week here. There’s an urgency to be in New York. People are now working 24/7. It used to be you worked your 9 to 5 job and the day was over. But technology, (the Blackberries), has enabled people to do more business. The hours that they are doing business are really endless and more flexible. The point is to be close to New York regardless if you have a place in Connecticut or Montauk. Wherever it is, you still want to have a place in New York City. Or if you have a home elsewhere to have a place to hang your hat temporarily in New York City is a great thing to have.I think it’s necessary for anyone who comes in to New York once or more a week to work. If you have a late-night and you’re out with clients and you don’t feel like driving home, you can go into your luxurious suite and stay there for the night. If you’re married and you want to get away from the kids, you can bring your wife to your place and have a romantic weekend. Having a place in New York isn’t about just real estate, it’s about your identity, and I think that’s what Trump Soho is. It’s an identity. It’s not just bricks and mortar.
Shaun: You Mentioned the 90’s before you were as successful as you are today. I remember selling real estate in the 90’s at $400 a square foot. It’s the year 2007 now and we’re seeing deals in excess of $6,000 square foot. Where do you see that trend in the next five years? Do you think the market has peaked?
Alex: No. In the 90s, $1 million was a lot of money. $1 million today is still a lot of money but it doesn’t have the same value as it did in the 90s. And in the 70s $1million dollars was really a lot of money. I think you’ll find in the next 10 or 20 years $1 million will have less value. Real estate is a long term hold. You have to have the staying power, and if you want to hold real estate, what you buy for one dollar today is going to be worth a lot more later on.
Shaun: Let’s shift gears to another project you’re doing downtown which I think is equally as innovative. The project you’re doing with Andre Balazs and Larry Davis. It’s innovative because of the amenities. It’s almost hotel-like but it’s strictly a condominium. It’s also the only ground up residential development in the neighborhood, which is a very historic. The numbers are showing a huge success on that site, but I guess at the time you purchased it, the project was considered a risk. Is that the nature of your business?
Alex: If I’m not being called crazy in some part of the day then I’m not having a good day. The financial district is the financial capital of the world. You have the major financial institutions on Wall Street and you have this resurgence of young people going there. We followed that trend and we said “You know what? We’re going to build a really luxurious building in what has become New York City’s hottest market”, and it’s been proven, through its sales and the numbers we’re achieving that we are right. That building is so special because of its design and the ambience created through the amenities. Having André and Larry as partners has been a great added value. This is a residence. This isn’t a hotel, but it has a hotel-like amenities. Again, it’s all about the vibe of what we try to create. The development process takes a long time. The construction process is probably half the time of the development process and throughout the whole thing you surround yourself with creative innovative thinkers and the final product should be creative and innovative. I think we’ve had incredible teams on both projects that have led us to develop premier assets in New York.
Shaun: The majority of the industry and non-industry people will consider the two projects you are working on to be the two iconic projects in Manhattan at this time being built. Let me shift gears a little to the commercial side of the business. How many square feet of commercial space does the Sapir organization own, control and manage?
Alex: We currently own over 7 million square feet. One of the first properties we bought was 2 Broadway, which is the MTA headquarters. We bought that building in a very depressed time of real estate in New York. At the time we signed the largest single lease in New York City history and the building now stands somewhat as a landmark in the city. You see it in a lot of movies. Some people don’t realize that they are actually looking at 2 Broadway which is the building that’s in front of the Bull in Bowling Green. We own 100 Church St which we actually just signed a big deal with Niche Media.
Alex: Thank you. Signing the Niche Media deal was an important image for the building and it proves that Downtown is real. After the tragic events of 9/11 everyone was saying “Don’t touch downtown”, but we had some really great leaders in the city saying, “We have to rebuild and we have to build it better than it ever was”. Thanks to people like Larry Silverstein and the other leaders in this city, and thanks to our government, downtown is here today, and it has a huge presence in every aspect of the economy. You have Goldman Sachs building their headquarters. There are major tenants moving downtown and the World Trade Center will be a true symbol of what America is: strength and versatility. We’ve only been around since 1776 and we’ve seen so much. We are still a young country and we have a lot more to prove. We’re a superpower and we have to continue to be super power, and having New York City as an anchor proves how great we can be. We are there but, we still have a long way to go.
Shaun: I have met many successful second generation entrepreneurs who are living the American dream. You have a very strong work ethic. What do you attribute that to?
Alex; It all comes from my childhood. My father drove a taxi for 19/20 hours in a day. When he had his electronic store he was there for 18 hours a day. He used to take me to work with him on the weekends and watching him come to this country with $80 and do what he’s done, it would be a shame for me not to have the work ethic that I have.
Shaun: What advice would you give to someone who is looking to get into the real estate market now whether it is a developer, or just a regular buyer?
Alex: Call Shaun Osher, (laughs) you can quote me on that.
Shaun: Thank you. Other than your father, where do you find inspiration from?
Alex: My love for life is an important thing and my love for my family. I really am blessed because I enjoy what I do. If you don’t enjoy what you do, you can change it. At the end of the day you need to feel every time you sleep and every time you wake up that you’re happy. I find a lot of inspiration from that. Being lucky enough to be able to go travel the world and see different things and see how small the world really is. As many miles away as the city is, the world is really small and it keeps getting smaller. If you’re a business leader, you must give back a portion of what you earn to those less fortunate out there, and the only people that can help them are people with the means. The more people you help, the smaller the world becomes, and the closer to people you become. I try to let everything inspire me. I try to surround myself with great people, great partners, and live life to be happy.
Shaun: Where would you like to see yourself 10 years from now?
Alex: On a beach with long hair. No seriously, I think you will find me in New York, I love New York. I will always have a presence here. On the business level, I obviously want to expand our portfolio, expand our reputation, be known as one of the top names as a Landlord, Developer, Manager, and Business Person in the industry and have a real brand loyalty. On a human level, continue to do the things that my family has been known to do. It’s really growth, expand on what we are doing today, and continue to be happy, surround ourselves with good people, and enjoy the treasures of life.
Shaun: What is next in the pipeline? Is there anything imminently in the future that you’re working on right now that you can discuss?
Alex: Well, I just signed a deal in Miami. I can’t talk too much about it, but it’s a small deal, but it’s a deal with a lot of character. The size of a deal is important, but character and other great traits are really important and important to our brand. It’s going to be luxurious and it’s going to be cool. It’s going to be fun and it’s going to be what Miami needs. It’s going to bring on things that Miami doesn’t have. That’s all I can talk about. Other major markets, whether it’s nationally or internationally there is still great potential. Bringing the world closer and taking our name to become a household name. And working with Shaun Osher more.
Shaun: Thank you.