Up Front: UNREAL ESTATE
NOW, THAT'S THE ART OF THE DEAL
EVER WONDER HOW THE Rockefellers got to be the Rockefellers? Just look at how they've come out ahead with fabled Rockefeller Center. Current patriarch David Rockefeller is putting up a mere $20 million for a 5% stake in the Manhattan landmark they once owned outright. It has been in bankruptcy court since May because of the soft office-rental market.
His deal, in partnership with Goldman Sachs, keeps the family involved in the Midtown office complex, from which they've extracted $1.9 billion over the past 10 years. The process began in 1985, when a real estate investment trust, Rockefeller Center Properties Inc., was created to hold a $1.3 billion mortgage on 12 Rock Center buildings. The family got about $300 million when the REIT went public. Later that year, a family holding company owning Rockefeller Center pocketed an estimated $244 million by selling another Center tower, the Exxon Building, to Mitsui Fudosan. The biggest paydays came from Mitsubishi Estate: In 1989, the Japanese concern paid $846 million for 51% of the family holding company. In 1991, Mitsubishi handed over another $527 million to up its stake to 80%.
The board of the REIT, the creditor in bankruptcy, has O.K.'d the Goldman Sachs-led deal. Next step: a REIT shareholder vote next year. Peter Johnson, an aide to David Rockefeller, says that the Center didn't earn a cent for the family from 1928 (when the project started) until the 1980s.By Suzanne Woolley