Oct 23, 2015 at 03:46 o\clock

Real estate loses deal-maker Sarah Korein.

Sarah Korein, one of New York's toughest, sharpest and yet largely unknown deal-makers, passed away on October 29th, leaving an estate that includes major buildings acquired over more than 60 years of creative deal-making.

At her death, she owned the ground under One Penn Plaza, Lever House, the Swiss Center, 120 Broadway, 111 Broadway, 111 Wall Street, and Colt Industries, a/k/a the Bank of Montreal Building at 430 Park Avenue, and owned and operated 295 Madison Avenue, the Delmonico Hotel at 502 Park Avenue, and the residential buildings at 220 and 240 Central Park South.

Some of those properties and leases are expected to come into market play, although the family is very cognizant of the worth of the portfolio and the net leased tenancies that bring in millions of dollars, year after year.

Mrs. Korein is survived by her son Julius, a neurologist; a daughter Elysabeth Kleinhans, who is involved in the operations at the Delmonico; four grandchildren and nine great-grandchildren.

Born in Dresden, Germany while her parents were on a trip, she was only 14 when she met her future husband, Isidor. He was a 26-year-old Hungarian engineer who was building a power plant in her native Palestine, but by then the future Mrs. Korein had already learned the art of the business deal.

Before she turned 12, Sarah was buying wine from the British, trading it to the Turks for flour, which she then turned into cakes that she sold to the British, her son Dr. Julius Korein recounted last week. A Sabra, a woman of the future Israel at heart, she was also a member of the underground that fought and eventually won independence in 1948, long after she had come to America.

But during World War I, the young couple was separated, as Isidor returned to his country. She became a secretary and they corresponded for a couple of years. When Isidor returned to Palestine at the turn of the 1920's, they married and emigrated to America, soon bringing the entire family.

Her mother and father, grandparents and two sisters, Esther and Tikva, her brother Eli, and little Julius lived in Brooklyn. Their first real estate venture came about in 1931, simply because they didn't want to pay rent. The family chipped in and purchased a six-story walk-up apartment house in Flatbush for $6,000, but Sarah, who was teaching Hebrew and the Bible at a day nursery school, soon became the driving force behind the acquisitions.

The family purchased several more Brooklyn buildings, with the men acting as the supers and then later on as the managers. But even as Mrs. Korein pursued innovative investments, Isidor stayed in the background, happy to take care of the properties.

In 1941, the family purchased a tremendous building for their experience, 87-01 Shore Road in the Narrows of Bay Ridge. It was six-stories and was served by four elevators. By the time they were closing, however, they realized it was in terrible condition and half empty, and although Mrs. Korein complained to the seller, they were forced to take title.

Needing to rent up the empty units, she bought dozens of refrigerators for 10 percent down, hoping to use them as an inducement for new tenants. Meanwhile, she stored the Kelvinators in the empty swimming pool in the building's basement.

"When the war broke out, everything was immediately rented as is, and she had a swimming pool full of refrigerators, which because no one could make any new ones, she sold and made an enormous profit on," Dr. Korein recalled.

At the end of the war, Mrs. Korein insisted on purchasing in Manhattan, and took on 715 Park Avenue in 1946 with some creative financing techniques, helped by Charles F. Noyes and Prudential. She reduced the $1.7 million mortgage and then refinanced and converted a mortgage with a 4 percent amortization and 4.5 percent interest rate to a 4.5 percent interest rate with no amortization so she could pay out less and have more free capital to spend on other deals.

She purchased buildings like the Adams, the Croyden and the Beresford, and eventually developed the Elysabeth, named for her daughter, at 35 East 38th Street.

Alan B. Friedberg was the young renting and managing agent who was in charge of the property for Greenthal & Co., the firm he had co-founded with the older Charles Greenthal.

"I heard she had a deal with Peter Sharpe," Friedberg recalled. "So I went to see her at her apartment at Two Fifth Avenue. I said to her, 'You can't sell it. I'm buying a house,' because the building commissions were supporting me. She gave me $5,000 and I'll never forget that. I told Charlie and he told me to keep it. [The money became] the difference between living in Queens or living in Woodmere."

Mrs. Korein never considered the Elysabeth a success, however, and never developed a property again.

When she was about to purchase the Beresford, where she later lived, her partners pulled out before the closing. At noon on Monday, the family was supposed to produce $500,000, so Mrs. Korein sent her husband and brother-in-law to the closing, while she went to visit her bankers. "My mother came at noon with two certified checks, each for $250,000," Dr. Korein said.

In 1951, she bought the huge Croyden Hotel at Madison and 86th Street, which Friedberg later purchased from her, but he says, "She cried all the way to the bank."

"It was very difficult to do a deal with her," he explained, fondly recalling her negotiating tactics. "She would say she wanted $90, so I would say I'd give it to her, and then with her little accent she'd say, 'I want $100. It's nothing to talk about, it's virth a vortchine.' It was very taxing and difficult because you never knew what price would make the deal. But it was still fun. Without any fanfare, she was one of the most brilliant real estate people. She was really ahead of her time."

Mrs. Korein's friend, broker Marcia Rose Yawitz of Debrah Lee Charatan, and Lawrence Ackman, a partner with Ziff-Ackman Real Estate Group who financed all of her purchases since 1972, recalled a similar tale surrounding 405 Park Avenue, which Mrs. Korein owned with partners who wanted to sell.

Dr. Korein said she had purchased the land and building for $3.5 million plus a $2.5 million mortgage, and in the late 70's sold it for $9.5 million to the US Life Insurance Company.

'She was practically sitting shiva because she sold it," Yawitz remembered.

"She sat shiva over every sale. She would say, 'You shouldn't have made me sell it.' But don't get me wrong, she was always the one who made the decision," said Ackman.

Meanwhile, US Trust company put easily $5 million into renovations at 405 Park, said Ackman.

"Then someone called her up and said they would sell it back to her, so she bought it back," continued Yawitz.

Dr. Korein said she bought it back in 1980 for about $14.5 million in cash and a $3.5 million mortgage.

She still complained to Yawitz, "Why did I have to give someone a profit?'" But she sold it three years later to the Saudis and made a huge profit. Ackman put the final sales price at $42.5 million.

"No one advised her, and she didn't know what her projection was. She didn't have a PC or an MBA or assistants," said Ackman. "She had an instinct for real estate that I've only seen a few people, like Sol Goldman."

In the 1960's, by the time Mrs. Korein put down $250,000 to buy the Osborne, a huge artist and musician's residence at 57th Street, she should have known better than to buy something without examining it personally. So when she did look, she saw walls that were 14 feet thick for sound-proofing, an ugly structure, and she realized she had made a mistake. Never one to just bemoan her fate, Mrs. Korein called The New York Times, and that Sunday, the paper reported she would be taking it down to build a new co-op.

The residents, including the - sims urban oasis - late-Leonard Bernstein, came to her in protest on Monday morning. Declaring she didn't want to tear down their home, she sold them the contract for $500,000, pocketing a quick $250,000.

While she made money, the residents had to take their own money out of the stock market to buy the building. "Indirectly, she saved all their savings, because the stock market fell right after that and they still had the building," said Dr. Korein.

Among the residential buildings she bought and later sold were 24 Central Park South, next to the Plaza Hotel; the Schwab House at 11 Riverside Drive; and 4 East 89th, with the help of her attorney Lawrence Friedland, which she once described to Dr. Korein as a "sit down deal."

She moved onto commercial properties with the Jensen building, and soon after that the Swiss Center, which was subject to a lease.

"She like to call them her tenants," said Dr. Korein of the companies that rented the buildings that sat on her land under One Penn Plaza, the Lever House and Swiss Center, among others. The later two leases are now controlled by RFR Holdings, which is renegotiating the ground lease at Lever House.

She bought Lever House in a tax-free exchange from the profits at 405 Park, buying the land from Met Life and the leasehold from Fisher Bros., which had sublet to Lever Bros. The price was $42.5 million, but all she was getting was $1.05 million from the ground rent, plus the rent from Fisher Bros.

Ackman says she nevertheless saw tremendous upside in the future re-appraisal, and when the timing was right in 1990, asked Ackman and her attorney Larry Friedland to renegotiate the lease early, which she then used to remortgage the property, working up from a 2 percent to about a 15 percent return.

The land under One Penn Plaza had been assembled by Ackman's father on behalf of the Bowery Savings Bank, which wanted to create a big presence for its branch at Seventh Avenue and 34th Street. They then leased it to Harry Helmsley and Lawrence Wien, who constructed the building with Met Life. But the bank was eventually taken over by North River and then American Savings Bank, which turned to Ackman's father to sell the land. Mrs. Korein outbid everyone with a $25 million bid in 1984.

"That was less than the bank had spent on assembling the property, but at that time, the return on the investment was less than 8 percent," Ackman said. "But she liked the investment and the ground lease had reappraisals. I think what kept her alive to 93 was seeing the next re-appraisal."

Although Jewish, she became friends with Cardinal Spellman. One day, he called and asked her to come over, and when she arrived, provided her with a list of properties that the church owned, asking her to look them over and evaluate what they were worth.

Dr. Korein said, "She took a cab and looked at the properties and she came back and told the Cardinal, 'They are worth $20 million plus or minus a few hundred thousand.' Whereupon, the Cardinal opened a sealed envelope containing a professional appraisal for $19.7 million.

"She would say, 'You have to feel the pulse of New York City,'" Dr. Korein remembered. "In her peak, she was a really beautiful woman. You get a picture of this cute and pretty little woman who looks innocent, but she is a tiger."

Ackman said she was loyal and very friendly, and had a keen sense of humor.

"She use to say 'Ackerman,' - even though my name is Ackman, 'You're my Rascal,' and she would say to [the late-] Lou Smaedback, president of William A. White, 'You're my Scoundrel.' I once found and gave - - her the perfume Scoundrel and she loved it."

At the private service, her grandson, James Korein, wrote a poem which in part read: "She was loving and protective and proud of her family, but she could be very hard. She was a deal-maker. She hedged, she reneged, she changed her mind. She got what she wanted, she won. She wasn't a teacher, she wasn't a leader, she was a force of nature. She was hated and she was loved. She was Grandma Sarah."

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