Stephen Ross: Billionaire Real Estate Tycoon

few people in in the country are known to be real estate people few individuals have created the composition of residential hotels retail office space than a person by the name of Stephen Ross few people are the related companies and I'm happy that I have the chairman founder of the related companies and also the principal the major owner of the Miami Dolphins and Sun Life Stadium somewhere studious I'm stadium Steve Rose today so Steve you know you were born in Detroit Michigan and your parents he moved to Florida grandpa your grandfather had a hotel in South Beach oh I know I was really in Collins Avenue which is around 63rd Street and he's gotten sick and my father I guess some of his inventions didn't really pan out and so the family moved there too I really kind of helped my grandfather out now what was interesting is you said you worked there but you also worked at the Fountainbleu because you wanted to meet people with money right well I mean I worked at the Fontainebleau because I wanted to make money and the at that point it was the hottest hotel and probably the most expensive hotel so while I was going to high school in Miami Beach I work at the as a beach boy after school and also because it relates the football you also played high school football played high school football match played high school which is you know what happens later on couldn't play pro football today but you played high school now you said you were not the best student people wouldn't believe that you know Steve Ross the Ross School at the University in Michigan was not the greatest student in high school well I guess when I moved to Miami Beach from Detroit the transition was so great and it was like a different world to me and I kind of rebelled and I guess it was my grades kind of you know affected by it and I wasn't exactly what you call a great student but I always wanted to go to the University of Michigan so you started in a Florida State at University of Florida University of Florida you were there for what two years years they had to accept you if you had grades above a certain score in the statewide exams so I was there they flunked out two-thirds of the freshman class but fortunately I did very well and I was able to transfer to the University of Michigan and then you got a an Auburn right and you spend there and then you graduate with the BBA from University of Michigan and you go to Wayne State University for a law degree for a law degree right and then you decide that you really want to come to the Big Apple I mean New York is New York as you've lived most of your life here now and you come here to go to New York University for a master's in taxation right I guess I came home to a place I've never been and I guess that's how I really ended up being in my life so now the kid goes back to Detroit goes to one at that time because for our older group they'll remember there was something called the Big Eight now it's big now there are four accounting firms left and you went to library Ross Montgomery right and you so this young guy who is a tax attorney because over there goes to work with these other 22 tax attorneys right right and what are you doing over there well I mean I did not really know what I wanted to do when I graduated I had no idea and it was a very progressive place and doing things that I think most firms didn't do in New York and I was very encouraged to go there because we really had like almost a nationwide practice and I had some real estate clients and I kind of took to real estate and when the clients started looking for me for how I would do things and they were being very successful doing it I said why don't I try and do something myself now you told me when we got together it was the date that Bobby Kennedy was shot and you were talking to the people in the office that you want to go to a seminar and something happened now whether when the partners walked in the night before Bobby Kennedy was shot and you know being depressed you never know when your life could be over and he asked me to go to New York for a seminar in foreign taxes and and just out of my mouth the words came I think I want to go back to New York for good and that's as a matter of fact I am and I quit and that's how I come loose in New York so you come back to New York and you get a job in the real estate investment banking at that time who knows what it was of the small firm called Laird right and what do you do with Laird and company well it was they had it was a it was a firm there's a little bit ahead of its time it was backed by the DuPont's and that I was in the real estate which was Laird properties and once I got there I found out they had no money so it's a question what do you do things wanting to be a real estate developer when you have to money so I looked at putting together types of entities and using the capabilities that Laird had investment bank of raising money for these type of entities as opposed to developing and they did they attempted to do some developments and so I saw what in New York was about to assemble the sited where the Sony building is today with Stanley Stahl so I went through that and a site where I guess 801 third Avenue is and they assemble that but they ended up selling those sites because I didn't really have the capital to do it but it was a real learning experience I think you really learn by watching other people's mistakes or being involved you don't you don't learn as much from success as you do by you know watching other people's mistakes so you spend the better year year and a half at later about a year and a half and then you get a job with this firm which is no longer in business either called Bear Stearns right and they I had a friend that was there and he told them some of these deals I was putting together so I went there and because I went through a whole interviewing process before I when I moved to New York and so with say 50 months aback at another firm though that was the only firm I really interviewed at that time and I guess as we talked I ended up getting fired from there and I guess that was the start of it was good it was a good situation because being fired you wanted to be an entrepreneur by now you knew you truly want the band well you know I didn't really tell it tell you know you got to look at yourself it's something like that and kind of examine yourself and understand your strengths and weaknesses and and where the opportunities in the world are and I said one going I couldn't really didn't have the stomach to go back and interview again go through that process and I said what are my strengths and weaknesses and where you know what work can I do well and then I kind of wrote a game plan Drake you said you wrote a business plan it's 1972 right in the 1971 yeah and I wrote a business plan in an affordable housing that that had been working on because at this time there was the the bigger the big administration push for the affordable housing around the country right I mean it was all result of the Great Society programs of Lyndon Johnson and then I think Richard Nixon was president United States at that point and and then putting together a real estate coming knowing that I probably saw whether you could really make the most amount of money if you will and what I like was real estate development and also because of the taxes that you gained over the years to tax ramifications of syndication and everything that was my background here that you know through tax indications but but I think the difference was I saw in building a real estate development company you had to have another source of income you couldn't rely upon development fees and there's 20 real estate cycles and the business cycles rather and you'd see real estate developers you know boom or bust and you really want to withstand those cycles so you had to have another source of income so that was using the capability I had as a syndicator of tax shelters in doing it strictly with affordable housing because there was a tax shelter should have no risk attached to it and and then also affordable housing was the best way to learn how to become a developer because you would you didn't really have market rate risks in terms of running your units it was a question of building it and building a good product and I think then you know when I looked at it whatever we did we wanted to be best in class and I think that we I developed a reputation of building probably the some of the finest affordable housing projects and during that period you said to me you opened up 11 offices well what happened was I my first business plan I was going to go out and looking at the how you attracted government subsidies and that was all local at the time through the FHA offices and then setting up offices in each state where they had those FHA offices and then in order to get those subsidies and then doing it for other developers and then syndicating it on a national basis and then using those same offices to build developments in but I couldn't attract the capital because I never had done it before so people said once you just go out and show us you can do it and we'll give you as much money as you need and I went out and I did a few syndications and started a development and I found well I don't need other people's money I might as well open it myself and kind of bootstrap myself so it was always a constant putting whatever money I made back in the business and really not taking any money out for for many many years but also part of what you said to me when we got together is that part of it was there was an image also that and you went to the at that time 666 fourth Avenue for an office space right well I mean you know I think people want to feel comfortable with the people they're doing and they want to do business with people who they feel were successful and just starting up I was looking for office space and I was you know I took a short term sub lease at that time in 666 which was a very prominent location a great building and I got it for something like $4 a foot so and that was probably only an 18 year 18 month lease but at the same time kind of established myself I was able to get some deals done and from there grant well hand over an eight-year period you had really developed a large number of affordable units all around the country well they started up after I started they had the section 8 program and when that came out I said hey this is terrific you know from a developer's standpoint and so that I kind of built up a staff that they had had the capability of developing those type of projects and I think between 1972 and 1980 we did something like 5,000 units so it's 1980 and and the kid from Michigan gets an opportunity because there's an entity called Catholic Fairview from Montreal or Toronto which was owned by Edgar Bronfman at that time and you get appointed get approved for this whole property called Riverwalk five buildings large project 14th Street to 23rd Street on the East River right near Stuyvesant Town and that was a great learning experience specially for the future learning of Time Warner Center and a variety of other projects let's talk a little bit about that well the city had an RFP out for the land from 16th to 24th Street and we put a proposal in as many of the major developers in New York it was a mixed-use project at that time I think was somewhere around three to four hundred million dollar project which was very large at that point and having participated in Miami Beach and a project called South Shore where we were selected to be the developer of affordable housing out of a large plan project and working with a master developer and dealing with him I said and I having dealt with him I said if he can do it I certainly could do it and so when they had this RFP we put together a plan and I was fortunate enough to be introduced to the people at Cadillac Fairview and we show them a model and what our plans were told about it you know who we were and the chairman and president the company came in to our offices we gave them a presentation and there they said we'd like to go forward with you I mean that was when those events that you remember that really changed you know what I was doing at that point we put a proposal in and we beat out every major developer when their front page in the New York Times you know and who was related you know certainly we wanted because we had Cadillac Fairview and they were the largest developer in North America at that point in time so that kind of we changed our brochure we changed kind of our strategy a little bit and led to a lot of other new brands and one of the things that also led to was the center of purchase right well then I got a phone call the following week from the president of Manhattan of Manhattanville College and asked us if we'd be interested in developing this piece of land they had tuned for an office park and because there was an interchange that was going to be built there and did a little homework and people said well it's never going to be built but I told them that they said that's not true so I went up to Albany met with the Department of Transportation found out that the interchange was funded we made a deal and we ended up with that was originally six hundred thousand square foot office park never having built one before but I felt that you know I put that type of location I would get financing and so was all based on you know what people thought you were was really reality and that's got me into the office building we then bought the site next door that was controlled by New York telephone for a conference center and they relinquished that when they merged with another company and so we ended up with about 800,000 square feet that we developed very successful now you also one of the visionaries in Battery Park City yes when Battery Park City was getting started there had been one building there that was developed by LeFrak and then they had given out some of the other sites um and I the probably a lot of them were probably given out for political reasons and we had the you saw the what I thought would be a you know good market and we took over three sites at that time three of the first buildings built under the new master planned that they had down there and we're very successful and simultaneously at that time you also took over 625 Madison Avenue you reclad the building that was quite a few years later I think one was in a well I guess was around 84 that we took over the Battery Park City sites and we were doing another large development and we took over at 93rd and and third was now known as Carnegie Park another developer had won that and RFP couldn't get it started we stepped in and took that project over and probably about a couple years later 625 became available and we put a new skin on that but right but the interesting thing is why I bring up 625 is because when you were at 625 you were looking look you were looking west and you saw the old Coliseum and that was a great opportunity and tell us the story about the Time Warner Center sure our offices were on the ninth floor at 6:25 we had rehab that building is the Revlon building and I would stare down Central Park South and looking at the Coliseum and looking at and see what a great site and it was totally underutilized and I guess in the early 90s knowing that Boston Properties had the site but they were going anywhere in New York was really suffering some very severe economic problems I and we had in our retail division had been doing a lot of Kmart's got to know the people at Kmart quite well we came up with an idea of putting Kmart and all their subsidiaries in there and they were going to net leased the building which would have been jobs for New York would have been a short-term lease and it would have been their way of showcasing in New York all their products because they weren't here at the time and that got a lot of press and got and made me a lot more familiar with the site at the last minute though we we thought we a deal the it was turned down because there's a lot of pressure how can you put Kmart at Columbus Circle but then we followed the site and and you know when you sit and you look at something you're a real estate developer and you see hey this is the best site in New York you kind of wonder what you could do there so when it did have an RFP we certainly were one of the bidders on that and I guess after the first round we went to Time Warner and I think it's what you're referring to and I had an appointment set up with dick Parsons who was the president at that time Jayla Ben was that was the CEO and I got somebody to set that I had known dick but I wanted I didn't know if he'd really take a meeting knowing what the subject was and I wanted it really kind of like surprise him so I got a meeting with him without him knowing what it was about took some boards and I sat down he's away he said what are you here for I told him Time Warner he said everybody had been here before and I said to him we have space all over the city and I said you know dick this isn't about space this is really about showcasing your company look what's going on today with all the media companies you're the largest media company in the world and everybody thinks you're part of NBC the Rockefeller Center in this non descript building so he thought about it we showed him some renderings what it could be and he said to me then disturb me said dumb I'll give you an answer in ten days I'll have board approval in sixty days I mean it was one of those great meetings you know involved and I think because of that we subsequently won the bid to develop what is now Time Warner Center which is a 2.8 million square feet and everything right I mean you know certainly I mean there was a very challenging building I'd never had built anything quite like that I mean we'd grown as a company to probably being the large I have to go back because I failed to go back in the 1990s we had some difficult times and I think there was a really major thing that changed the related companies or related housing whatever it was during the difficult times you were thinking of becoming a REIT you were going to be residential rate in 1992 and 1993 no what had happened was like in the difficult times of the early 90s we like everybody else suffered you know and if you didn't end so that we kind of had to restructure our company and do business a different way and certainly we came out probably stronger after that point in time but I think the important thing that I want to bring up is that you are going to be read would have been the second largest residential read and then there was this analyst or individual this is probably 1993 and we had filed to do all of our residential properties in or just our residential not the syndication not the office of the retail inter read and put all our properties in there that we were developing and the sites we had and five days after we filed we'd spent about five billion dollars in doing the registration statement the at the Navy convention the analysts from fidelity said they'll never be another multifamily REIT and fortunately there never was another well that my REIT and after that investment bankers told us you probably wouldn't get your IPO off for some time so we said hey you know let's look forward how we can go do business you know on a different basis and Ohio State well when we filed the REIT we made because of the size of it that we were on the front page of The Wall Street Journal with a little article about that and we got a phone call from someone at Ohio State Teachers David Lin I don't think he's there any longer that asking us that if you don't get your REIT we'd like to back you and so as soon as we got that two weeks later David will take you up on your offer and we sat down worked out an arrangement with Ohio State which has been a terrific relationship really great organization and we then proceeded to build apartments in New York we had equity and Monterey was one of them now the Monterey we had already had under construction and but we started I guess with where we bought Tribeca Tower at that point and and then we did I guess 14th Street 89th Street about four or five projects 84th Street and first the Strathmore and so that really kind of kick-started are really major surge as a residential developer in New York City so Time Warner Center now you know you always like since we both like the wolverines you know you you were involved with the the major fundraising program and then what happens the Ross School well I mean you know I always believe in get back I think that's a very important thing and being from Michigan you know I never forgot it and I think the impact the University of Michigan had in my life was very significant to me and when they came to me to do something very special and I was in a position to do it you know they targeted me and they kind of you know how they could fundraise it always knows who he wants to target right and so I and I was obviously susceptible to it and you know it was something that I thought was kind of interesting because if you're going to do it and I was planning and giving my uncle was like real mentor to me max Fisher who was the Ohio State Business School right so you know and we always had this kind of capitation between Ohio State and Michigan my mother had gone to Ohio State so I was always something if I could do that you know naming the business school and giving the the lead gift there with it was a great degree now I know you like football had the Dolphins come up how do you become the owner of the Dolphins well when we moved to Florida when I was high school in the ninth grade I always you know really became my home my parents lived there I went there for every back for every vacation bought a home there and you know I was really considered myself more of a Floridian so and having a love for football and I guess like every kid you know you always dream of owning a team and and when I got a phone call from the NFL asking if I'd be interested because I was the under bidder on the New York Jets earlier when woody bought it so I kind of jumped at the opportunity and it's it's it's been a real different type of challenge but it's been fun and it you know it's interesting since you were the under bidder on the Jets at least you you want out from woody to build the Hudson Yards and that's going to be the next crowning achievement Los Angeles and the Hudson Yards well I would have really liked to have seen the stadium built on the west side to be very honest with you I was very involved with the Olympic Committee that we had here that led by Dan Doctoroff and kind of really kind of pushed to have the stadium there I thought it really was it was important for New York and it'll been great but when that was no longer you know possibility and when the Hudson Yards became available you know after you built Time Warner Center and we're involved you like really getting involved he's transformed transformational type projects and certainly that will be one and something that I look forward to really developing and I think it'll surprise a lot of people so Steven I'd say from the kid from Detroit you've not only been a builder of New York you've been a builder of the world thanks for being here today it's a real pleasure Michael thank you for having me

23 thoughts on “Stephen Ross: Billionaire Real Estate Tycoon

  1. To the interviewer… try not too assume, or cutting the guy off cause you think you can finish his story……… let HIM tell the stories please!!! He said "well no" to just about everything you said too him!!! Why are you interviewing him if you think you know everything about his life and story already?? Don't make a statement and at the very last sentence turn it to a question… definitely don't ask HIM a question, and then YOU chime in and try to answer it!!!! Btw I'm not being rude here, just some advice that will help u going forward. This was a really hard interview to watch because of the things I stated….

  2. 😩😩😩😩😩 Lord help us me and my family was once rich in Zimbabwe and the government messed up the currency and made us poor Lord help us get back or wealth please in the name of Jesus amen πŸ’ΈπŸ’ΈπŸ’ΈπŸ’ΈπŸ’ΈπŸ’ΈπŸ’ΈπŸ˜©πŸ˜©πŸ˜©πŸ˜©πŸ˜©πŸ˜©

  3. Stephen Ross needs to go back to real estate let a football guy on the Dolphins he doesn't know a damn thing about the business he owns I hate people who are billionaires don't know nothing about what they just bought only to just say they own it Leonard craft knows about the business he owns that's why he wins Super Bowls Stephen Ross doesn't know nothing about the business he owns please Stephen Ross leave you don't know nothing about football that's why as a Dolphin fan I know our team will never go to Superbowl because you suck your cheap you don't know nothing about football just give up on the ship on the Dolphins you suck as a owner

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