An Interview With Ian Schrager

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I.S.: No, we sold One Madison about a year ago. And we recently sold out at 50 Gramercy Park North, which is a residential project adjacent to the hotel. And we have two units left at 40 Bond. I think we set a record price per square foot at both projects.

L.G.: What were those?

I.S.: Close to $3,000 a foot. I think in the Gramercy Park area, before we got there, prices were probably $1,200 to $1,400 a foot, and I think in the 40 Bond area the highest price was $800 to $900 a foot—so we're quite pleased with the results of those projects.

L.G.: It looks like Ricky Martin [who paid a reported $6.3 million for a three-bedroom at 40 Bond] got a pretty good deal on his apartment.

I.S.: Well, not really. I think it wound up at $2,700 or $2,800 a foot. And so, to me, when you have the business model that we have—with 28 units—we really can't give anyone any kind of accommodation. They sort of pay whatever the ask price is.

L.G.: So there's two left. If readers want to check it out and buy one, what are they? Describe the units.

I.S.: It's a one bedroom and a three bedroom. The one bedroom is, I think, $3.5 million. And the three bedroom is maybe $8 million or $9 million. . . . [In terms of other projects], we're working on a hotel in Miami Beach right now, which would be a cheap chic version of what we've done down there before. Because, I think, while everyone is banging their heads against high rates down there at Miami Beach, we've sort of forgotten the market that it got started with, and we want to go back in there and do that. We're renovating an existing hotel, the Riande on 21st Street [in South Beach]. And we're going to come up with a new brand and for a less expensive hotel. That'll probably be the first one that we'll be using the new name on. 

L.G.: And this is separate from your deal with Marriott?

I.S.: Yes, it's the private-label company [Ian Schrager Co.] And not for public consumption yet, but we're very close to doing a deal for multiple hotels on 10th Avenue in Chelsea. And we're in discussion on closing a multiple-hotel deal in Las Vegas. And we're looking at other properties in Florida. Our strategy is to do eight or nine hotels in the private-label company. It'll be the combination of high-end hotels and less expensive hotels but—distinct from what I did before—instead of building these hotels to run them, I'm building them to sell them. I'll go public with them, sort of have the exit in mind, and maybe a six- or seven-year plan. The expensive hotel will be called The Schrager, and the less expensive hotel—we 're still considering what to call it.

L.G.: You've been in the hotel business quite a long time, but more recently you've gotten into residential building.

I.S.: It's an easy business.

L.G.: That's an easy business?

I.S.: Yeah, compared to hotels. When I build the residential project, when I'm finished building, I'm done. Yes, I have to market it, but it's not nearly as intensive as running a hotel. When I finish building a hotel, with the same effort—by the way, even more so—when the construction's complete, that's when the work starts. It's just more labor-intensive, more difficult, more moving parts. It's an operating business rather than a development effort.

L.G.: Right. And for the residential projects you're building for a very high-end market obviously.

I.S.: It's a particular kind of business model. We broke a lot of rules there. We built a 90,000-square-foot building for 40 Bond, and people would say you can't build a building that small, because things like that really don't pay. You know, you have to have a couple of hundred units. But to my way of thinking, having a couple hundred units, you're really vulnerable to the swings in the marketplace, and you make a couple hundred dollars a foot. I'd rather have 28 units, be a little bit insulated from where the economy goes—I'm very pro-distinct product-and make a couple thousand dollars a foot. And wind up making more than the bigger projects that require more financing and more capital to get done! So I like that business model. Similar to what happened to the hotel business. "Don't build a hotel that has less than 250 rooms." Where is that written? You know, it just depends upon the cash flow you can generate.

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