Jonathan Gray, Blackstone’s wizard of real estate, has spent billions buying up distressed assets during the downturn, including his brand-new bid for some of Bank of America’s buildings. Still, the deal that has defined his career so far has to be Blackstone’s purchase of Sam Zell’s Equity Office Properties. Not only was the 2007 acquisition of 563 office properties the largest leveraged buyout of all time, at $39 billion, but it also pit Mr. Gray against one of the shrewdest men in real estate, Vornado’s Steve Roth. The bullish Mr. Roth is still stinging from the loss.
The Observer spoke with Mr. Roth for this week’s cover story, and he still thinks about the whopper that got away. “I’m remorseful,” he said. “Obviously, we wanted that deal, we chased that deal. It was an enormous deal, and we thought it was important for our company and we sincerely thought that. When we didn’t get it, I was remorseful, and I’m still remorseful. I wish we got the deal.”
Still, there are no hard feelings for a man Mr. Roth very much respects. “No, of course not,” he told The Observer. “Business is business. Jon’s great, and Jon is still great.”