At almost 90 years of age, Larry Silverstein is one of New York's premier real estate investors and developers. Well known today throughout the world as the owner of the World Trade Center, Mr. Silverstein has been a notable Manhattan real estate developer for over 50 years. Today, he is the chairman of his company, Silverstein Properties.
Born during the great depression, Larry started from humble beginnings in New York where he would grow up. After obtaining his college degree at NYU, he would marry his wife Klara. Together, they would raise three children.
Son of a leasing broker, Larry was exposed to the business at a young age. With the demands of having to support a family, he took an entrepreneurial leap with his father from brokerage to commercial real estate development and investment.
The risk paid off and after having delivered returns to his fellow investors, more projects ensued. His journey in real estate continued as he acquired, developed, rehabilitated and re-positioned commercial properties in Manhattan entirely on spec.
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Born in 1931, Larry Silverstein is the son of Harry Silverstein who was a classically trained pianist, but a commercial leasing broker by trade. Larry was raised and educated in New York. Larry and his sister grew up in the Bedford Stuyvesant neighborhood until moving to the Washington Heights area.
As his father was a classically trained pianist, Larry and his sister would attend the High School of Music and Art. Upon finishing high school, he continued his studies obtaining an undergraduate degree from New York University (NYU). After his college degree, Larry also attended law classes in the mornings at Brooklyn Law School while he worked in the afternoons as a leasing broker.
In 1951, Larry would attend camp where he was tasked to wash the dishes. His boss in the kitchen was a young woman named Klara. After an invitation by her parents for dinner, the two would begin dating and eventually marry. They would have three children together.
Harry Silverstein, Larry's father, was a leasing broker in the garment district. After college, Larry would go to work with his father as a leasing broker. They would primarily lease loft space to the companies in the rag, woolen, and remnants district in New York.
As Larry was starting in his career, he noticed it was the lawyers who had the final say in whether a deal would get done or not. Observing the impact lawyers had on their commercial lease transactions, Mr. Silverstein decided to attend law school to enhance his skills as a real estate professional. He began to take law classes in the mornings. He would then go to work with his father as a leasing broker in the afternoons.
At that stage, Larry felt he wouldn’t be able to make enough to support a family the day he and Klara would have children. Fortunately, Klara was a school teacher with a salary. However, Larry felt there lied greater opportunity for himself on the real estate investment and real estate development side of the business.
Larry found the opportunity to strike out on his own when he came across an investment property for sale for $600,000 on E 23rd Street in Manhattan. He was approached to list the property, but it peaked his interest. After presenting the opportunity to his father, they decided to try and acquire the property as investors.
Without any cash, they embarked on the journey to raise the necessary capital to acquire the property. After a series of refusals to get the initial $15,000 to place the building under contract, they got a lucky break and found a bank to lend them the money.
The next step would be to raise the additional equity and debt capital to buy the commercial property. The idea would be to follow the example of Larry Wein who recently formed a real estate syndicate with Harry Helmsley to acquire the Empire State Building in 1961.
For the equity portion, Larry Silverstein's father raised the capital by asking 15 of his former clients he leased commercial space to to contribute $10,000 each and become real estate investors. The group of commercial property investors would form a real estate investment syndicate to buy the investment property. The remaining $450,000 was raised by obtaining a commercial real estate mortgage.
The Silversteins successfully bought the investment property. After operating the property, Larry Silverstein was able to deliver a good rate of return to the real estate investment group. Naturally, they wanted to do it again.
Larry Silverstein would continue on the path of forming real estate syndicates to acquire properties until he was able to acquire 105 Madison Avenue. The property was occupied by garment contractors and manufacturers paying a rent of just under $2 per square foot per year (PSF).
Larry Silverstein would take another fateful entrepreneurial risk. He vacated a floor at 105 Madison Avenue, and improved the industrial space to see if he could speculatively rent the floor as office space. Once again his initiative paid off.
The New York Telephone Company rented the floor as office space at over twice the rental rate at $5 PSF. Even more fortunate, the New York Telephone Company continued to lease more office space on additional floors.
From that point on, Larry Silverstein was extremely attractive to the commercial lending institutions. He would not have to form real estate investment syndicates out of necessity to raise capital to buy investment properties or undertake future real estate development projects.
The path to the World Trade Center began in 1980 when the Port Authority offered the keystone site up for bid. Larry Silverstein would win the bid to lease the site upon which he would build 7 World Trade Center. Initially engineered for a 25,000 square foot floor plate, Mr. Silverstein knew the local tenants were attracted to larger floor plates that had twice as much square footage.
Larry Silverstein would build 7 World Trade Center on spec with the larger floor plates desired by the larger tenants in the area. He was successful in leasing 1,000,000 square feet of space to Salomon Brothers. Equally important, he now had experience dealing with the Port Authority.
When the Port Authority decided to divest itself from ownership of the World Trade Center, they approached several candidates to submit bids for the office towers. Vornado was initially the successful bidder, but relinquished their successful bid to Larry Silverstein who was more experienced in affairs with the Port Authority.
