The Mayflower Hotel building located at 15 Central Park West in NYC is arguably the most valuable real estate in the world. According to sources, it’s the perfect spot to build luxury condos that can be sold for more than $10 million per apartment. Seeing a lucrative opportunity here, real estate tycoons Arthur and Will Zeckendorf bought the building for $401 million in 2004.
Before I go on, let me explain to you guys the concept of rent control. It’s basically a system of laws that limits your landlord from raising your rent every year. As Celebrity Net Worth points out, rent control is the greatest thing ever for someone that is looking to lease a place and never move out. This poses a huge problem for new owners looking to demolish or remodel the building. So they are left with three options:
- Wait until the tenants move out.
- Wait until they die
- Pay them to leave.
Knowing that time was against them, the Zeckendorfs decided to choose the third option and paid most tenants between $650,000 to $1 million to move out. Everyone eventually took the money and moved out, except one man by the name of Herbert Sukenik.
Sukenik was the definition of “hermit crab.” Will Zeckendorf told the New York Post that his profile was a “nightmare.”
“Hugely intelligent, a Ph.D., unmarried, embittered, a loner, disconnected from society, and too smart for his own good. He was not a poor man; he had independent means.”
Initially, Sukenik said that he wasn’t interested in money, but wanted to live in a 2200 square foot, two bedroom apartment nearby. The Zeckendorfs agreed and brought the property, which would be rented back to him at $1 a month for the rest of his life. However, Sukenik decided to pull back last minute, realizing the bargaining power he had by being the last tenant standing and how rich the new owners were. Suddenly, the man that said he wasn’t interested in money was suddenly demanding a ton of it. This pissed off the Zeckendorfs, but they decided to start demolishing the building anyways, they were hoping to drive Sukenik out from all the noise and construction around him.
What did Sukenik do? He gave them both the middle finger.
“Oh, I love to watch construction.”
Eventually, the Zeckendorfs finally caved and offered the hermit a whopping $17 million to move out of his apartment. On top of that, the deal also includes letting him live in a $2 million apartment at $1 a month in rent for the rest of his life.
To make things more awesome, Sukenik’s attorney, who got a third of the settlement, claims that he gave the Zeckendorfs a check for the first ten years and added a clause to the rental agreement requiring them to return a prorated amount if Sukenik died in that time.
So what’s the lesson here? Be stubborn, patient, know your bargaining power, and things might just pay off for you.