A Scion Sells the City

Location: You recently made a partnership with St. Vincent’s Hospital to build a new hospital on Seventh Avenue. It’s a complicated deal. Can you explain it?

Rudin: It is a complex deal. The basic concept is that the O’Toole Building on the west side of Seventh Avenue will be the new home of a state-of-the-art, 21st-century hospital. It’ll be built to work with the expanding demographics of the West Village and Chelsea and downtown, to really provide a very modern health-care facility to work with this population.

After that is built, we will take over the existing campus on the east side of Seventh Avenue and develop an apartment complex not designed yet.

What attracted you to this site?

What attracted us to it is that it’s an important medical New York City institution—it provides important medical facilities for downtown. We also liked the location and the potential for creating something very exciting and very dynamic in that neighborhood. My grandfather and my father and my uncle built 2 Fifth Avenue in the early 1950’s, so we have a sense of the neighborhood.

We’re in a building-sales market now where 666 Fifth Avenue went for $1,200 per square foot, and 450 Park Avenue is on the block for $1,500 per square foot. We’re shattering record after record. What do you think of all this?

Four years ago, people were a little depressed. My theme always was: It’s going to come back, it’s going to happen—it just takes time.

The numbers that people are paying and receiving are amazing. It talks volumes about this city and people’s belief that they’re making a smart investment at these historically high numbers. I mean, yeah, you step back once in a while and shake your head. But, on the other side, there is a tremendous amount of foreign money, domestic money and a lot of capital. This is where people want to invest their money, and that’s a statement on our city. Am I surprised? To a certain degree—but really not.

There’s a new trend where investors are forgoing the bidding process and asking the seller what he wants and then writing a check. What do you think of all these pre-emptive buys?

It’s indicative of the strength of the market. There are people who really want to invest in the city. There are smart and sophisticated buyers—they’re not doing this to lose money.

The developer Douglas Durst said he thinks pre-emptive buying means the market is topping out. He said he doesn’t think it’s healthy. What do you think of that?

I don’t know what the top is; every day we see another, higher price. I think the Mayor has done such a great job in positioning this city as a true global city. Capital is coming here; money is coming here. When’s it going to end? I’m not that smart to be able to figure out that answer.

A Scion Sells the City