I’ve known Bill Rudin for years. We serve on a board together (The Battery Conservancy). We see each other at cocktail parties (well, we used to).
A real gentleman. Kind to everyone. And a friend.
Here’s the thing: Bill is a VERY big deal.
His father almost single-handedly saved New York City from bankruptcy in the 1970s.
His family paid for the very first New York City Marathon that was run in all five boroughs.
Rudin Management Company owns 10 million square feet of office space and 18 apartment buildings – all in New York City.
Bill is Co-Chairman and CEO.
Which makes him the perfect person to talk to about where real estate is headed in a COVID-19 world.
ALINA CHO: First of all, for people not familiar with the Rudin name, give me a sense of what Rudin Management is…
BILL RUDIN: Rudin Management is a real estate company that was started by my grandfather, Samuel Rudin, in 1925. He was one of nine children. Their parents were immigrants who came to the United States in the late 1880s. So, Louis Rudinsky [my great-grandfather] came in at 15 years old, didn't have any money, and he fled Russia. And as a Jew, he could not own any real estate, nor could he practice his religion.
ALINA CHO: Right, and the United States was a huge draw because he could practice his religion in the way that he wanted to, and he could own real estate.
BILL RUDIN: I think it's the dream of every immigrant. My great-grandfather owned a dry goods store equivalent to a bodega today on the Lower East Side on Chrystie Street. He started off with nothing. He met his wife, Rachel, and they married, and they had nine children, and they lived above the store. And he always dreamed of owning his own building. One day before he was able to buy real estate, John D. Rockefeller, Sr. came through his store because they sold kerosene and Standard Oil was one of the kerosenes and Mr. Rockefeller would check to [make] sure the storekeepers were selling his product. As the story goes, Mr. Rockefeller came in the store, asked Louis if he was selling his kerosene. He said, "Of course, Mr. Rockefeller." As they're walking out, my great-grandfather asked Mr. Rockefeller, "Where do you live?" And he goes, "Well, I live on 54th street." So, flash forward a couple of years, and a broker came to my great-grandfather and said, "Louis, I've got a building for you to buy." And he goes, "Where is it?" He goes, "It's on 54th Street." He goes, "I'll buy it." And the broker looks at him like, "Don't you want to look at it?" And he goes, "No, no, no, no. If 54th Street is good enough for Mr. Rockefeller, it's good enough for me."
ALINA CHO: Wow.
BILL RUDIN: What my great-grandfather didn't realize, was Mr. Rockefeller lived in a mansion on the west side of 54th Street between Fifth and 6th, and this property was between Lexington and 3rd, and literally on the wrong side of the tracks, because Park Avenue was an open cut for the Grand Central railroad. But it didn't matter to him. He bought the property. Louis on his death bed told his son, Sam [my grandfather], "Never sell this property and buy more." So, our roots go back almost 100 years, and we now are one of the largest privately owned real estate companies in [New York] City.
ALINA CHO: As one of the largest owners of not just residential, but commercial real estate in New York, I don't need to tell you that when COVID-19 hit — and New York was hit particularly hard, and people fled New York — that was not an easy time for you.
BILL RUDIN: It definitely was a very difficult period for our company, our family, for the entire city. Obviously, the pandemic was totally unique, but the city has gone through so many difficult periods in my lifetime, going back to the fiscal crisis of the '70s that my father and uncle were intimately involved in, in terms of helping New York recover.
ALINA CHO: Yeah, let's talk about that.
BILL RUDIN: The city was literally running out of money, literally didn't have the cash flow to make payroll. So, my dad came up with this idea. It was in essence like a bridge loan. So, my father went to the mayor and said, "Hey, I can organize the corporate real estate owners to prepay their taxes several months in advance." [The city was] either going to go bankrupt or get this pre-payment of taxes. So, it was a very innovative idea…
ALINA CHO: Well, he raised $600 million for the city, which I don't even know what that is in today's dollars…
BILL RUDIN: Several billion, and he did it several times. So now your basic question is, what do we do now? So, we went back to the '87 [stock market] crash. We went back to the dot-com bubble. We went back to 9/11. We went back to [Superstorm] Sandy… how did we navigate through them? And the fundamental principle for our company is keeping low leverage. Don't over finance your buildings, so when you do hit choppy waters, you can navigate your way through. We’ve learned that lesson many, many times, and that gave us a playbook [on] how to handle this crisis.
BILL RUDIN: People are coming back to the office. 2.5 million square feet of commercial space was leased in July! On the residential side, we have historic rental activity not just in our portfolio, but across the city. Last month, more than 7,600 residential leases were signed in Manhattan.
ALINA CHO: How do you explain that?
BILL RUDIN: Well, obviously, there was a massive exodus. A lot of people left the city. And [it’s] the same mindset after all these tragedies, “Nobody’s ever going to come back.” And as you know, my dad always said, "Never bet against New York City."
ALINA CHO: What is your feeling on how the Delta variant might change things?
BILL RUDIN: Some companies have pushed back their dates for employees coming back, but we are also seeing [other] companies continue their plans on bringing their teams back. I think after Labor Day, you will see a significant increase in people coming back to work. You're already seeing subway ridership [has] increased significantly. But, that total shutdown of the city was something we had never really experienced before.
ALINA CHO: Bottom line it for me. As someone who owns 16 office buildings, you’re not worried about filling them?
BILL RUDIN: I always worry about my business. I’m worried about the things I can’t control – the economy, interest rates, how businesses are doing, what’s going on in the city. All those things keep me up at night. But I think the fundamentals are so strong, as a city, we will get through it.
ALINA CHO: I’ll probably write about your family's connection to the [New York City] Marathon.
BILL RUDIN: The Marathon is a great, great story. So, in 1976, it was the Bicentennial for the country. Before that, the marathon was just run through Central Park, however many loops they did. And they ran around. And for the Bicentennial, the came up with the idea of having a five-borough race. They ran into Jack and Lew [my uncle and father] at a cocktail party. My grandfather [Samuel] had just passed away. And so [they say] we want to do a marathon one time where you make a $25,000 contribution. And my father said, "Yes, we'll do it if you give [out] the trophy as the Samuel Rudin trophy. *[The Rudin family was one of a handful of original sponsors].
ALINA CHO: Because [Samuel] was a long-distance runner.
BILL RUDIN: My grandfather was a walker, a runner. And so, we did the race. They did the first race, and it was so successful, they kept doing it and doing it and doing it [as a five-borough race]. And every year, a Rudin, first, it was my grandmother, then it was my generation, and then our kids, and now my grandchildren and cousins give out the trophy. So, we obviously missed [the marathon] last year, but we’re coming back this year.
ALINA CHO: Every year, your family is at the finish line.
BILL RUDIN: I will be at the start and the finish line, like I always am. It's going to be a very symbolic and meaningful day to show that the city is back.