Why $13 billion made by 20 real estate tycoons looks small
U.S. real estate tycoons couldn’t keep up with their billionaire peers in the pandemic era.
Let’s ponder data from my trusty spreadsheet tracking the ups and downs in the combined wealth of the nation’s 20 richest individual property owners.
Collectively, the 20 tycoons were worth $97 billion in Forbes’ 2021 accounting — or an average $4.9 billion each. That was up $13 billion — an average gain of $700 million per tycoon — over 12 dramatic months of a global battle against coronavirus.
While the world was slowly winning the pandemic war and real estate values were recovering from coronavirus damage, 16 of these 20 tycoons actually saw their standing drop on Forbes’ global wealth scoreboard. Their combined average ranking falling 126 spots to 688.
Few would say those real estate gains were puny, but a deeper look at Forbes’ research tells us a lot about the rarified, billionaire world.
A year ago, 2,095 billionaires from all industries were worth a combined $8 trillion, averaging $3.8 billion per fortune. This year, 2,755 billionaires — yes, 660 more — were worth $13.1 trillion. That’s a $4.8 billion average.
So the spreadsheet tells me the assets of the world’s typical billionaire grew $1 billion, or 24%, in a pandemic-scarred year. The total net worth of the 20 real estate tycoons rose “only” 16%.
Some of this underperformance can be tied to lingering real estate uncertainties such as the future of shopping malls and office towers. But much of the gap is tied to the stock market, a wealth-creation machine for far more fortunes than property owners.
The S&P 500, the key benchmark for U.S. shares, rose 23% in the same period. The Nasdaq Composite, a yardstick for red-hot technology shares, skyrocketed 43%. And it’s a worldwide bull market as the S&P Global 1200 index rose 27% in the year.
No sympathy is required for these rich property owners, but their portfolios did “suffer” sub-par results when looking through this global wealth prism.
Here’s who they are, how their riches fared in the last two years and how their wealth changed, all according to Forbes …
1. Donald Bren (age 88): His $15.3 billion net worth — tied to the Irvine Co. real estate empire — was down 1% in the past year after falling 5% the previous 12 months. He’s ranked 132nd richest globally vs. 63 a year ago.
2. Stephen Ross (age 80): His $7 billion from the Related Cos. housing developer was off 8% in the past year and was flat in the previous 12 months. He ranked 369 vs. 185 a year ago.
3. John Sobrato (81) and family: $6 billion from Sobrato Development, a Silicon Valley commercial landlord, was up 40% in the past year after falling 34% in the previous 12 months. He ranks 451 vs. 414 a year ago.
4. Neil Bluhm (83): $5.7 billion from marquee Chicago properties was up 54% in the past year after falling 8% in the previous 12 months. He ranks 486 vs. 494 a year ago.
5. Edward Roski, Jr. (82): $5.5 billion from Majestic Realty, a Los Angeles-based developer, was up 77% in the past year after falling 43% in the previous 12 months. He ranks 502 vs. 648 a year ago.
6. Sam Zell (79): $5.3 billion from Equity Group Investments rose 10% in past year after falling 13% in the previous 12 months. He ranks 529 vs. 349 a year ago.
7. Ted Lerner (95) and family: $4.8 billion from Washington, D.C area properties was up 30% in the past year after falling 24% in the previous 12 months. He ranks 589 vs. 494 a year ago.
8. Igor Olenicoff (78): $4.5 billion from Olen Properties, a Southern California-rooted commercial landlord, was up 15% in the past year after falling 3% in the previous 12 months. He ranks 638 vs. 468 a year ago.
9, tie. Rick Caruso (62): $4.2 billion from his Los Angeles mall development firm was up 24% in the past year after falling 15% in the previous 12 months. He ranks 680 overall vs. 565 a year ago.
9, tie. Leonard Stern (83): $4.2 billion from real estate in the New Jersey area was down 7% in the past year after falling 6% previously. He ranks 680 vs. 383 a year ago.
11. Katharina Otto-Bernstein (57): $4.1 billion from managing the Otto family fortune rose 105% in the past year after falling 41% previously. She ranks 705 vs. 1,063 a year ago.
12. Jeff Greene (66): $3.9 billion — created by betting against high-risk mortgages in the last real estate bubble — rose 5% in the past year after rising 9% previously. He ranks 752 vs. 494 a year ago.
13. Donald Sterling (86): $3.8 billion from apartment buildings in Los Angeles rose 6% in the past year and was flat in the previous 12 months. He ranks 775 vs. 514 a year ago.
14. Ty Warner (76): $3.6 billion by turning his Beanie Babies company into a high-end hotel portfolio was up 38% in the past year vs. flat growth in the previous 12 months. He ranks 831 vs. 804 a year ago.
15. Charles Cohen (69): $3.5 billion from high-end office buildings in New York City was up 9% in the past year vs. a 6% decline in the previous 12 months. He ranks 859 vs. 616 a year ago.
16. Jay Paul (73): $3.4 billion from Silicon Valley office space was up 62% in past year after a 36% slide in the previous 12 months. He ranks 891 vs. 1,001 a year ago.
17. Richard LeFrak (75) and family: $3.3 billion from New York City apartments was up 18% in the past year after dropping 53% in the previous 12 months. He ranks 925 vs. 743 a year ago.
18, tie. Jane Goldman (65): $3.1 billion from New York City apartments was flat in the past year after falling 6% in the previous 12 months. She ranks 986 vs. 648 a year ago.
18, tie. Herb Simon (86): $3.1 billion from the mall giant that bears the family name rose 24% in the past year after a 26% decline in the previous 12 months. He ranks 986 vs. 836 a year ago.
18, tie. Jerry Speyer (80): $3.1 billion from landmark office towers fell 23% in past year and was flat in the previous 12 months. He ranks 986 vs. 451 a year ago.