Earlier this month, Michael Dell, the onetime biology major who founded Dell Computer Corporation in 1984 with his BMW as collateral, engaged in a bidding war for the 12-room duplex owned by Stephen Schwarzman at 950 Fifth Avenue. On March 15, he won.
That day, Mr. Dell, 35, the sixth richest man in America, signed a contract to purchase the 10th- and 11th-floor apartment for $22 million-an extra $4 million over the asking price, according to a source close to the deal.
Suddenly, Mr. Dell, whose 2-year-old venture capital firm is headquartered on Third Avenue, and his wife, Susan Dell, whose line of clothing is made in the Garment District, are New Yorkers. At least some of the time. And so is Mr. Dell’s kid brother and sometime business partner, Adam Dell, who landed in SoHo last November to start his own Internet investment company and lecture on on-line entrepreneurialism at Columbia University.
So, Manhattan, meet the Dells.
“New York is great,” said Adam Dell, 30 ( and single ), calling from a car on his way to the Reebok Sports Club on the Upper West Side on March 17. “There’s lots of smart, talented people on the East Coast.”
Adam, the downtown Dell, moved into a 4,117-square-foot loft on Mercer Street in SoHo in January. He paid about $4.5 million for it, according to brokers. That same month, he formed Impact Venture Partners and signed a deal to invest $10 million in Opentable.com Inc., a nationwide on-line restaurant reservations system. The Web site was launched on Feb. 21 with a party at Eleven Madison Park hosted by restaurateur Danny Meyer, another investor.
Adam Dell had been a partner at Crossroad Ventures, one of Silicon Valley’s leading venture capital firms, before he lumped together $100 million in order to go out on his own. The investors include his brother Michael, via his venture capital firm, MSD Capital L.P. (it stands for Michael Saul Dell), Frank Quattrone, a star tech banker at Crédit Suisse First Boston, and John Mumford, founding partner of Crosspoint Venture Partners. Adam Dell and his seven employees are cooling their heels at 245 Park Avenue until June, when they will take over new headquarters at 599 Broadway, near Houston Street.
Michael, the uptown Dell, has had one foot in New York since he formed MSD Capital in 1998 to invest and increase the fortune he has amassed from his $23 billion company. The office, with a staff of about 25 people, is located on the 43rd floor of 780 Third Avenue, 27 blocks from the apartment he just decided to buy at 950 Fifth Avenue. According to real estate sources, there were four different bidders competing for the four-bedroom apartment owned by Mr. Schwarzman, president of the Blackstone Group L.P., an investment firm. Mr. Schwarzman put it on the market in February after signing a deal to buy insurance mogul Saul Steinberg’s triplex apartment at 740 Park Avenue for $37 million, the most ever paid for a Manhattan co-op apartment.
Now Mr. Dell has contributed $22 million to Mr. Schwarzman’s coffers. It might be the most ever paid for a Manhattan pied-à-terre .
“The apartment is very pretty and has lovely views,” said a broker who showed the Schwarzman apartment to a client. “But the elevator only fits three people and there’s no back elevator for art .”
The apartment has a grand railroad-style layout with a central hall, two main entertaining rooms, four bedrooms, a library and large picture windows. Mortimer Zuckerman and Jonathan Tisch also live in the building.
“A good percentage of his time is spent in Texas,” said a spokesman at Dell Computers, who would not confirm Michael Dell’s deal. Michael Dell did not return calls to his office at Dell Computer or to his publicist at MSD Capital.
The Dells were raised in Houston. Their father is a dentist, their mother a stockbroker. Now Michael Dell calls Austin, Tex., home. Dell computers are manufactured there, among other places, and the corporate headquarters are in Round Rock, Tex. In 1997, he and his wife hired New York architect Charles Gwathmey to design a granite, sterling silver and limestone behemoth that is now reputed to be the most expensive house in their county. Construction costs were estimated between $30 million and $60 million. The 33,000-square-foot mansion has eight bedrooms and an indoor lap pool.
That same year, Michael Dell’s wife, Susan, a 36-year-old fitness buff, started Susan Dell Inc., a luxury women’s wear business, which occupies two floors at 499 Seventh Avenue. Ms. Dell makes evening gowns, ready-to-wear designs, cashmere sweaters and sleek black dresses. She lines all of her inside seams with satin. She likes hidden pockets. Some items sell for as much as $15,000. The company’s president, Linda Beauchamp, told The Observer that for now the clothes are sold only in Ms. Dell’s store in Austin. There are plans for more stores and, of course, a Web site.
Initially, Michael and Susan just set up businesses here, but Adam Dell came to live here, for real. Adam’s four-bedroom loft in SoHo’s cast-iron historic district is in a building that was converted into condominium apartments two years ago and boasts full services, including a 24-hour doorman and concierge and 19 lofts with 12-foot-high ceilings.
“I wanted to live near work,” he said. “And SoHo is quiet at night.”
“It’s unlike any other space I’ve seen,” said Mr. Dell’s broker, Shaun Osher of Douglas Elliman, of the high-quality, hand-done finishes in wood and limestone. “It has really good views of the city and southern and western exposures.” The loft also features three and a half bathrooms, a Jacuzzi and steam shower, a gourmet kitchen and a walk-in stone fireplace imported from Italy.
Basically, Adam Dell is playing the part of Silicon Alley dude. “There’s a lot of money out here, but there are not as many early-stage venture capitalist firms,” he said, explaining why he moved from Silicon Valley to Silicon Alley.
So far, Adam Dell’s company has invested about $30 million, including $10 million in Mywebos.com Inc., a Web-based computer operating system, and smaller stakes in Hotjobs Ltd., Carsdirect.com, National Transportation Exchange Inc. and Go America Communications Corporation, a wireless Internet service provider in Hackensack, N.J.
Asked about his relationship with his oldest brother, Michael, Adam Dell said, “He’s in a very different business, but we talk all the time.” (The middle Dell brother, Steven Dell, is an ophthalmologist in Austin.)
Adam Dell’s seminar at Columbia University’s School of Business is called “Entrepreneurship and Internet Economy” and meets at 10 A.M. every Tuesday.
“I hope the students enjoy it,” he said.
They might, actually, if he can convince his older brother, one of the biggest entrepreneurs of our time, to come down from his Fifth Avenue duplex and share a lesson or two.