Tuesday, November 3, 2009

Rockrose split was not an unpleasant one

From the NY Times:

The Elghanayans, like many of New York’s old real estate families, took a conservative approach to financing. They often bought land for cash and kept leverage low. “We never had mezzanine loans,” Tom said. “We financed 75 percent of value, not 95 percent.”

Over time, the brothers developed a clear division of labor: Fred, an engineer, handled construction. Tom, a graduate of Yale and Harvard Business School, did development and acquisitions. Henry, a lawyer, handled financing and, later, commercial buildings. Their youngest brother, Jeffrey, who left the partnership in 1989, is an architect. Every Wednesday, they met over lunch.

Compared with property breakups of some other New York real estate families — often long, messy affairs replete with blood feuds, lawsuits and ugly recriminations — the Elghanayan brothers’ split has been relatively swift, smooth and secretive. The Milstein family fought for a decade over control of a $5 billion fortune that included hotels, apartment buildings and a bank. The wrestling match over the billion-dollar estate of the land speculator Sol Goldman lasted seven years. And who can forget the squabbling over Harry B. Helmsley’s $8 billion empire, part of which eventually went to his wife’s poodle?

The Elghanayan brothers didn’t slap one another with lawsuits. And there were no vicious industry rumors, or anonymous mudslinging in the gossip columns, about the fate of this very private family that ran the Rockrose Development Corporation, one of the city’s largest developers of residential buildings.

“A lot of the families have had very unpleasant break-ups,” said Daniel Brodsky, a developer and a close friend of Tom Elghanayan. “They managed to do it in a very civilized way."

Civilized, yes. But that doesn’t mean it’s been free of tension. For one thing, Henry’s decision to initiate it, as well as the assets he selected, surprised his brothers. There would be much horse trading before the breakup was legally completed on Sept. 29, and the brothers acknowledge some bumps along the way.

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