“He scored big,” says Cohen. “That transaction solidified his stature as an office-tower developer in Midtown and it moved him into the big leagues.”

To his admirers, what sets Macklowe apart is his broker’s ear for bargains and his developer’s eye for possibilities. “Harry is one of the most creative individuals you’ll ever meet,” says Mitchell Konsker, vice chairman at Cushman & Wakefield, who has worked with Macklowe on several projects. “He sees possibilities where others don’t.”

CRACKS IN THE FACADE

Yet Macklowe’s success has also been uncommonly controversial. In 1985, at the height of New York City’s homelessness crisis, the city enacted a moratorium on the demolition of single-resident-occupancy hotels. Late one night before the policy went into effect, Macklowe’s contractors demolished two S.R.O.’s. They had no building permits to do so, and didn’t even turn off the gas.

The event was dubbed “midnight demolition” by the media, but Macklowe was eventually exonerated by the district attorney for the actions of his contractors. He ended up paying $2 million in fines and penalties to the city, and his reputation in New York was dragged through tabloid headlines. The name Macklowe, the New York Daily News opined at the time, is “a watchword for everything furtive and underhanded in the real estate business.”

Things got worse in 1994, when Macklowe fell into default over $100 million in loans and was forced to sell some of his signature properties. But two years later, Macklowe was able to bounce back with a residential project and a new office project on Madison Avenue. He’s been building ever since.

RECONSTRUCTION EFFORTS

In August 2003, Macklowe decided to wager all he had in an audacious play for a true trophy property. He won the rights to the 50-story G.M. Building, which had carried oversize gold letters spelling Trump just a few months before he made his $1.4 billion bid—an amount that, at the time, was more than anyone had ever paid for a building in the United States.

“That took a lot of courage,” Durst says. “We were bidding on it too, and he paid considerably more than what we thought it worth. He put up all his other assets. If it turned against him he would have lost everything.”

Says Bob Knakal, chairman of Massay Knakal Real Estate Services: “Most people thought that he paid too high a price.” Macklowe rehabbed the building, creating more retail space on a side street, transforming the plaza out front, and renting space to Apple, which installed a 32-foot-tall, glass cube entryway that has become iconic. All those moves increased income. But it was the hedge funds moving in upstairs and the city’s soaring real estate market that turned Macklowe’s risk-taking into genius. “He saw the ability to do those things where others did not,” Knakal says. “And the way the market has performed has turned that deal into a grand slam.”

The G.M. buy was just a warm-up for what was to come. In the weeks leading up to Blackstone’s recordbreaking $39 billion buyout of Equity Office Properties in January, Macklowe got Blackstone’s John Gray on the phone and offered to relieve him of E.O.P.’s New York City office holdings.

The $7 billion deal—sealed with a handshake—allowed Blackstone to secure the bridge loans it needed to beat out rival bidder Vornado Trust for what would become the largest leveraged buyout in the history of the world.

The deal gave the Macklowes eight class-A office buildings, and in one fell swoop doubled their portfolio to more than 10 million square feet of office space. The $1.73 billion price tag on just one of those properties, Worldwide Plaza (whose tenants include advertising behemoth Ogilvy & Mather and the law firm Cravath Swaine & Moore), represents the second-largest sale price for an office building in U.S. history.

Whether that play will pay off has yet to be seen. If New York’s real estate market goes south, so will the Macklowes’ fortunes. But so far, things look pretty good. In the first quarter of this year alone, rents for class-A office space in Manhattan rose 29 percent vs. the same period in 2006.

“Supply and demand is creating the upward pressure on pricing,” says Mary Ann Tighe, C.E.O. of the New York Tri-State Region for CB Richard Ellis, the world’s largest commercial real estate services firm. “That’s not likely to change soon.”