In New England

Mega Real Estate

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During the Mega Real Estate period I became so embroiled with deals that I neglected normal journal entries for a long time. Bracketed below is commentary and undated summary which I inserted January 31, 1999. The reader will forgive a small amount of ancillary material retained in normal context:

 

 

1980

 

Jan 4 Burlington, New England Aquarium [lobsters with rare pigmentation, huge  trout feeding on crayfish], Hancock Tower [Beacon Hill houses look like little match boxes]. Run into Joyce. Rib at Jake's. Drink with Maria for last time. Drink with Joyce- give her my card. Drink with Dorrie who says she will go out later if she gets a call. Finally buy a drink for Ginger who gets me very horny. Fight off whores at Charley's like last time. See Gina. Find out from Debbie that Tammy quit. Get horny seeing Melanie dance. Joyce tells me Liza had operation and is not in school. China Pearl.

 

[Winter. Go international and begin working on large commercial-industrial real estate deals. Within a few months my listings total $1.5 Billion. I have about 1/3 each from owners, brokers, and attorneys. Many listings are from Mitchell Realty in the Empire State Building. Ed Mitchell is 82 years old and a self made multi-millionaire. He dealt with "young Vanderbilt" in the 1920s, and in the 1970s flew with the Hunt Brothers aboard their personal jet. Ed introduces me to A J Kaplan from New Jersey, who also sends me many good properties. By Autumn my average listing is $15 million. This does not include oil refineries (Barbados, Canada, Mexico, Rotterdam, Virgin Islands) which would skew the average too much. Many are calling me, but nobody is buying anything because of high interest rates (18% at peak). Like sitting on a gold mine with no shovel. Before circumstances persuade me to stop initiating new deals in Spring 1981, I have a lot of excitement, fun, and a few close calls. Some deals drag on well into 1982. Most of the cover sheets for these are still in my old green file cabinet. A few examples here. Sequence is approximate from memory:

 

Two Oil Refineries from H Gertz in Palm Springs. One owned by him at $60 million and one he is brokering at $600 million. I combine them onto one spec-sheet with my letterhead. Make the mistake of sending it to a broker I don't know very well. Three months later sheet comes back to me with another brokers name on it. When I call him, there are so many brokers involved, that he can't even trace the deal back to me.

 

Land in Panama. 20,000 acres with 20 miles of ocean frontage. This also from Gertz. Listings and commission offerings he sends are signed by him, but photocopies. Richard Myco from NH has a customer. We are all set to fly down to Panama, but Gertz refuses to give me an original signature. Myco walks from the deal and his customer with him. I warn everyone about Gertz for the next few months. Myco won't even talk to me he's so disappointed.

 

Skyscraper First Avenue NYC. Owned by the Shah of Iran. Price $125 million. I have this from Ed Mitchell. Hear on television that Shah's assets are frozen by the U S Government. I call Ed. He says to keep sending it to people, because it's under contract and the buyers have the legal right to pull out any time they want. It would then be available for any buyer I procure in the interim.

 

Apartment Complex Fort Wayne Indiana. Listed at $9 million. Receive written offer. Call up, but property has been sold two weeks earlier.

 

Finance Deals. Good sources for huge loans. One day I have just sat down to a hot meal at my kitchen table. Broker calls wanting $50 million for the Mexican Government. I tell him that they have a reputation for defaulting. He says that it can be somehow guaranteed. I want to eat, so I ask him to please call back later. He says maybe he will, but does not.

 

Morgan Guarantee Trust Company Building at 37 Wall Street. Prestigious listing, but lousy deal.

 

Whacker Building Chicago. This one from George Gewanter in NYC. Owner asking $38 million. I get deluged with calls, but too late. This is a very good offering which George sells within two weeks.

 

Harbor Plaza Boston. Listing from Joe Gerosa. Prospect calls offering $19 million. I tell him owners will never accept this. He says to convey the offer anyway or he will do it without me. I call up. Property sold for $28 million two days earlier.

 

Shrewsbury Gardens Massachusetts. 180 unit apartment complex. Carl Braun sends me this. Listed with 6% commission. Large REIT approaches me saying they have to dump $100 million into properties by the end of the year to qualify for a big tax reduction. They cannot buy property in this price range, however, when any commission is over 1%. Braun will not settle for less than 6%. REIT suggests I go around Braun because he has only an oral non-exclusive agreement with the seller. They offer me $20,000 to broker it, working directly with them and the owner, Ranaan Katz. As a matter of honor I refuse, even though I need the money desperately. Two weeks later I find another buyer all set to purchase even with the 6% commission. I call Braun, but the very temperamental Mr. Katz, has taken the property off the market.

 

Crude oil deals. On one occasion after rendering myself the procuring cause on a huge transaction (Two spot deals and a five year contract. My commission would be $9.73 million) I am threatened by the other broker to back off, because I'm not registered with Securities and Exchange Commission (oil is a security?). I call the SEC and talk with an attorney, who explains it all. I didn't know about the regulation. It was not my intention to do anything illegal. Because the registration fee is too high, I decide not to work on oil deals any more. My Arab source, Dr. Mohammed Ghani was checked out recently by an oil-man associate of mine from California and is legitimate. He's small, but gets three contracts a year from Petromin. I call Ghani and tell him what happened, but advise that he can still deal with me by supplying oil contracts to enhance my refinery deals and keep the entire oil commission for himself. I'll still get paid legally on the real estate end. A little while after this an associate from Georgia informs me that the clicking we hear means that my phone is tapped. He knows that it's not at his end, because his phone was tapped recently, and he took care of it. I know he's right because I've been hearing this sound for quite awhile now every time I use the phone. Eventually it stops. Was this Uncle Sam?

 

Oil Refinery in Canada. Bankrupt. Price $850 million. I have three possible buyers. Trustee in Chicago returns my call. Says he already has a sales agreement, but wants back-up. Agrees to all my terms including Loehmann Formula commission starting at 6%, and will get back to me if deal doesn't go through. Unfortunately for me, It does.

 

Humorous publisher writes an ad for a guy who sends me listings from Texas: "J R Ewing, move over! B K Pinson has office buildings for sale in Dallas."

 

Hartford. High rise office building clad with gold mirror. When I go to see it I am so delighted and proud to be involved with such a thing. It looks just like a beautiful cut and polished gem.

 

Deal involving "5 metric tons" of gold. Supposed to be transferred from a German bank when I produce a buyer who will put money down in a Swiss Bank. Somebody else brokers it ahead of me. Deal turns out to be a scam based on phony seller somehow getting the interest on the buyers down payment sitting briefly in the Swiss Bank. The gold exists only on paper.

 

Twin Towers Albany NY. Co-broking agent with buyer is going to pick me up on the way out. Doesn't show up. Property sells immediately. Talk to owner's attorney who sympathizes, but cannot reveal anything about buyer or procuring broker. This deal marks the beginning of my realization that it is very difficult to get paid in these situations without having exclusive-right-to-sell agency].

 

Mar 10 Sell silver in Winchendon [Call Handy and Harmann early. Silver has plummeted. Get to buyer apparently before he finds out because he wants to give me yesterdays price. I do not argue. Small transaction, but 1200% profit]. Boston Museum of Science. Rib at Jake's. Put down guy with smelly cigar. One drink with Ginger. Celebrate with Joyce all evening outback. Really notice Renee for first time. China Pearl.

 

_____

 

 

Nov 10 Work on Three Scrolls.

 

Nov 22 Discontinue same because I need books.

 

Nov 22 Call Monique. 

 

Nov 26 Visit New London Connecticut. Buyer, Alan Lane, wants New London Mills for a seafood processing plant. Show this with Peter VanStrumm of H Pierce Company. 400,000 square feet with rail on Long Island Sound. On the way down I hear that Russia invaded Poland this morning. It's very cold when I arrive early and walk around this huge complex. All brick with high grass and windswept cattails along choppy dark green salt water. Inside, the morning sun is streaming in through the tall 19th century windows. Massive boiler face looks like the front of a steam locomotive painted gold, only twice as big. Peter and Alan look two dwarves standing next to a huge alchemists furnace. Owners representative, Mr. Eiwens, has flown in from Belgium and later meets with Peter and I at the Hartford Hilton. On a beautiful warm day about two weeks later, Peter, Alan, and I meet with bankers in Hartford. You can see the Connecticut State House through the office window. This deal would mean a big commission for me, a free office at New London Mills, and approximately $200,000 a year for procuring seafood contracts (4% of gross sales estimated to be $5 million annually). In the interim I have lined up three prospective sources: Salmon from Alaska, shrimp from he Philippines, and a request from India for cheap seafood to help Bangladesh. Alan can't get the financing. Try a cheaper place in Plaistow NH owned by Rudolph Gudrieau. Rudy comes down to Royalston with his cute girlfriend and we sign an agreement set up like a co-broke, since he is licensed in New Hampshire and I am not. As the deal progresses, it comes to light that the price of the facility is exactly equal to the indebtedness, leaving nothing for commission. Rudy has been sent to alimony jail 60 times and is a very hard man to reason with. Deal falls through. Next I try to get Alan into Naumkeag, a large old brick facility in Manchester. Just as we're beginning to make some progress, Alan begins to act hostile and impatient with the owners. I explain to him that all this isn't about who has the most balls. We are only trying to make money. He agrees, but too easily, so I really lecture him to emphasize the importance of being genteel. I explain that the owners of these places have been rich a long time and simply laugh at fleglings who act like Al Capone. He agrees. Next we try Cadrin Mills in Blackstone Massachusetts. Really too far from the ocean, but Alan insists. Anti-Nordic Jewish attorney Arthur Lipmann wants me off the deal the minute he hears my Swedish name. I call his office more than once. The secretary tells me he's busy one time too many. I tell her to put him on the phone or I'll come to Boston and kick down his office door. She puts him on. I confront him with his bigotry. When the smoke clears, I'm still in the deal, but will work only with Lane and Joyce at Blackstone New England Corporation who sent me the listing. That's OK with me. Deal drags on and on. At one point I have an interesting talk with Alan's mother-in-law and ask her if Alan has any history of sabotaging himself at the last minute on big business deals. She says yes, he has been doing it for years. It turns out that Alan has falsified financial statements. Lipmann and his financier are going along with this knowingly. Alan is so charismatic that any of us would follow him to Hell and back. He simply gives you the feeling that if you stick with him, you will get rich. The financier is even going to lend Alan money to buy a suit to wear at meetings. I begin to see the whole thing turning into a conspiracy to defraud lenders and decide to get out of the deal. Lane owes money to angry people from NYC who have been calling Blackstone. Three months later I call around to see what happened. Joyce tells me that one day Lane simply disappeared with his wife and her mother. She does not suspect foul play, only flight to avoid creditors. How different life would have been if this deal had gone through].

 

Dec 4 Call Monique.

 

Dec 5 Hear Led Zeppelin broke up. Boston. Debbie tells me she never heard of Rachel. Rib at Jake's. Girl resembling Linda waiting as usual. Say Hi to Dorrie who doesn't know me at first [I have gone from lion's mane back to surfer style haircut]. Joyce comes over- "you just love doing this to me." At 66 meet witchy blonde with smooth hands. Talk to a very emaciated, gift seeking Venus [The ritual worked, however]. Call Monique four times from pay phones. See Venus dance. "Amusing" fatso hassles me while Venus drinks with greaser. See blonde named Liza dance. Talk to Melanie "Red Riding Hood." See Erica dance. See Gina dance, request drink after, she flashes teats and drinks with another. See Anita dance with same end result.

 

Dec 6 Monique calls wondering.