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Inside Len Blavatnik’s Real Estate Playbook

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Left to right: Jonah Sonnenborn, Len Blavatnik and Steve Witkoff. A rendering of his 76 11th Street luxury condominium project on the High Line (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images and DBOX)

When Ziel Feldman’s HFZ Capital Group paid $870 million to build a luxury condominium project on Manhattan’s High Line, Jonah Sonnenborn was baffled by the then-record price of over $1,000 per square foot. did.

“We bid about half of what HFZ bought,” said Sonnenborn, head of real estate at Access Industries. “We didn’t understand the numbers.”

Access tracked the site’s fate closely. And last year, when HFZ issues led to developer bankruptcy and project seizure, Access jumped at the chance to claim the bounty. Partnered with Steve Witkoff to acquire a nearly complete condominium and hotel development designed by Bjarke Ingels. $900 millionThe new owners invited Faena to run the hotel, replacing it with Six Senses, which resumed construction and resumed sales.

“They talk to Ren, decide what they want to do, and then do it.”

Jonathan Mechanic, Fried Frank

A deal to sniff out potential problems with Trophy properties and swoop in when things go wrong is Vintage Access, plunging into some of the most complex and noteworthy residential and hotel projects across the country. Founded by billionaire Len Bravatnik, the company’s war chest and comfort in hairy deals means it’s had a busy year. We are developing a 450,000 square foot mixed-use building. in Miami Beach, Aman brand hotel and condo project with Vlad DoroninIn Brooklyn, Access partnered with Miki Naftali to recently raise $385 million in construction financing for a condo and rental project in Williamsburg at a site with complex zoning and environmental challenges.

“The history of Len is about jumping into complex situations to add real value,” said Jonathan Mechanic, chairman of Freed Frank’s real estate division, representing Access.

According to Bloomberg, Blavatnik made his fortune in Russia’s “aluminum war” and today has a net worth of about $37 billion. The company has interests in Warner Media Group, Calpine Corporation (a natural gas and power company), and LyondellBasell Industries, one of the world’s largest plastics, chemical and refining companies.

“There are some interesting opportunities in terms of helping our development partners really verticalize their projects.”

Jonah Sonnenborn access

Blavatnik has hired Sonnenborn, a former executive at Dune Real Estate Partners of Daniel Nadich, who has an investment banking background, to run the real estate business.

“He [Blavatnik] Jonah has a lot of flexibility and we respect his judgment,” said the mechanic.

Access “didn’t follow the old rules of real estate private equity investing,” Sonnenborn said of the decision to join. The company “can invest in any amount anywhere in the real estate sector across the capital structure,” he added.

Access is less constrained than other real estate private equity shops and asset managers, as most of Access’s capital comes from Blavatnik, not outside investors. It can also be underwritten in a 10-year term and stay on the deal longer, compared to his traditional 5-year timeline. And you may jump at any opportunity that arises. A distressed deal occurs when a lender pulls out of a particular project in a high interest rate environment.

“There are some interesting opportunities in terms of helping our development partners really verticalize their projects,” Sonnenborn said.

“They talk to Len, decide what they want to do, and then do it,” says Mechanic. “It’s a much quicker process than many of our competitors.”

Access tends to partner with local developers rather than stand alone.

In Los Angeles, we partnered with Jeff Klein, a minority stakeholder in the iconic Sunset Hotel, and acquired stakes in numerous partners in 2017.

‘Jonah was my first call,’ said Klein TRDs He added that the two had known each other since Sonnenborn was in the dunes at the time.

Access also worked with David Schwartzman to revive the long-running redevelopment of South LA’s Baldwin Hills Crenshaw Plaza.

The flashy move comes at a time of renewed interest in Blavatnik due to its Russian ties. A naturalized British and American citizen, Blavatnik has his past business ventures, including a founding stake in oil giant TNK-BP, which counted Russian billionaires Viktor Vekselberg and Mikhail Friedman as co-investors. Vekselberg and Fridman are under sanctions in the EU, and Blavatnik in the US, who has not faced sanctions, has denied any ties to Russian politics and Putin in the past.spokesperson said Bloomberg earlier this year Less than 1% of Access’ assets are somehow connected to Russia.

However, according to Sonnenborn, the Access real estate deal was unaffected.

“If you have a problem of your own, you probably want to say that it is a problem, but it has never impacted our ability to complete a transaction,” he said. , noted that the Access deal had secured funding from top lenders, including JP Morgan., Bank of America, and Blackstone Group.

The company is currently looking for new opportunities in the public market, which could include buying shares in REITs and taking the company private. It could also put more money into sectors such as housing and logistics, Sonnenborn said.

Whatever Access does next, one thing is for sure: it won’t be simple.

“Everything I think about them is complicated,” said the mechanic. “They’re not buying a normal, ordinary apartment in Atlanta. They’re buying something complicated and risky, so they’re getting a risk-adjusted return.”

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