Altruism has a new name, and it is that of New York City hotelier Ed Scheetz. This owner of Chelsea Hotels planned to use a building he purchased last year to expand his hotel holdings in New York City. The hotel was to be built in the NoHo section of Manhattan, which gets its name from the area North of Houston Street. Instead of erecting this hotel, a nice addition to his portfolio, he instead sold the building to New York University (NYU) for roughly 50% more than he paid for it. The reason this is altruistic is because over the years, after he opened his hotel on that site, he would have made significantly more than booking a mere 50% profit. There might not be any other business in the world that guarantees payment so handsomely in perpetuity than a hotel in Manhattan. This property he sold to NYU, which is on Lafayette Street, was indeed an altruistic move.
There is no surer bet that one can make by buying real estate in Manhattan. It will likely retain its value, and depending on what you are going to do with it, the profits could well dwarf the purchase price in a short period of time. The value a piece of property has in Manhattan in present day terms has little to do with its potential value. A little research into how this area came illustrates just that.
If we look back to the development of Lafayette Street, and how it came to be, our research leads right to John Jacob Astor who bought a market here in 1804. As development thrived in this area, lots sold very quickly, and Astor made his money back several times over. Years after he started developing this area, it would earn the name Lafayette Street over a century later, but the fact remains this area was thriving then, is thriving now, and will likely do so for the rest of time.
Many would not call making 50% on your money in one year, and thereby cutting short massive profits that could have been recognized over time, anything akin to altruism, but it was. In the game of massive wealth played by the New York City real estate tycoons, the ever-changing winner is whoever has the biggest pile of cash. Mr. Scheetz will likely be jeered by his colleagues, and competitors, for this move that some might even perceive as soft, but he did it anyway. Now NYU students will have a temporary gym while their main gym is renovated, and NYU has a property they can develop for much-need space in what they refer to as the Washington Square Core. Visions of Ross Perot with a pointer howling “fuzzy math” might come to mind when reading this, but Mr. Scheetz left a lot of money on the table when he made this kind-hearted deal.