This possibility has not escaped Barnett. Four years ago, he says, he got “hammered.” “Truthfully,” he adds, “I thought that market was going to come down, but not as sharply and deeply as it did. When Lehman crashed, everything fell fast. Luckily it came back quickly.”
I ask him if he worries it can happen again. “I won’t say I worry so much but it’s in the back of my mind that—” He stops himself. “You know: Don’t get caught again,” he says.
On a warm day at the end of last month, I follow Barnett on a tour of One57. He is eager to see the progress on the Park Hyatt hotel, which is scheduled to open at the end of 2013, a few months after the residential units are filled. He walks quickly and purposefully through the back entrance of the building on West 58th Street and down a long tunnel of scaffolding. He is trailed by a young Extell employee named Brian McGrath.
“They’re Sheetrocking today,” McGrath shouts.
“Haven’t they Sheetrocked already?” Barnett asks.
“About 70 percent.”
“Yeah?” Barnett says, raising an eyebrow. He is wearing a sleek black suit, a silk floral tie, and a custom blue construction helmet, which is emblazoned on one side with his name. He steps easily around a pile of cinderblocks and fishes an antique-looking flip phone out of his pocket.
“Gotta call you back,” he says and hangs up.
Barnett was a diamond dealer before he was a developer, and he got his start managing New York property from Belgium, where he was living at the time. He has learned everything he knows, he says, by watching his buildings rise. Barnett often stops by One57 unannounced and pokes through the building, sometimes with a floor plan under one elbow, asking questions. “He’s very hands-on,” says one person who has worked with him. “It’s a plus and a minus.”
We climb into the construction elevator and ride to the 62nd floor. Unlike the penthouse, which is open-air, the shell of the building is affixed here, and the sun bends through the glass and spills across the concrete. “Beautiful,” Barnett says, mostly to himself.
Part of Barnett’s mystique, aside from his intensely guarded sense of privacy—his representatives made him available for interview on the condition that I wouldn’t pry into his personal life—is his ability to secure massive amounts of funding when other developers could not. For One57, he worked with a syndicate of lenders that included Bank of America and Abu Dhabi International Bank. Steve Kenny, of Bank of America Merrill Lynch, says he had never worked with Abu Dhabi International Bank but brought them to the table after multiple presentations from Barnett and a vet from an independent construction contractor. In the end, the syndicate invested $700 million. (The total cost of the building, including land and interest, will be $1.5 billion.) I suggest to Barnett that he must get queasy thinking about all that cash. “No,” he says. “It’s a tough business, but you don’t need to be a genius to be in it and to do well. You have to be more lucky than anything else.”
These days, in fact, Barnett talks frequently about luck. He talks about it mock-sheepishly, with a downturned smile, in the manner of a poker player who does not actually believe he has been lucky—and in fact may not believe in luck at all—but wants you to believe that he believes in luck in order not to look ungrateful or too full of pride.
We ride the elevator back down to the ground floor. Barnett walks headlong into the traffic on 58th Street, shooing aside an oncoming minivan, not stopping for a moment, still talking. He is telling me his new favorite story, one of two prospective buyers he had recently turned away. First, he suggests, consider the case of Nick Candy, the brash young British developer of One Hyde Park, in London, possibly the only property comparable to One57 in terms of asking price. Candy wanted a unit in One57 and the ability to flip it before the contract had closed. Barnett refused him, and Candy “went around and bad-mouthed us,” Barnett says.
“I’m selling my own units,” Barnett tells me. “I believe that prices are going to go up. I don’t want to give my profit away to speculators.”
Instance two: entrepreneur Michael Hirtenstein. A few months ago, Hirtenstein paid a construction worker $200 to cart his iPad to the 47th floor and shoot a video from the unit he was interested in purchasing. When the worker returned, Hirtenstein found he was staring at a much more cluttered view than he’d seen in official Extell brochures. (As Hirtenstein remembers it: “It was extremely misleading. Barnett found out I’d done it, and he was obviously freaked out. Suddenly it’s, ‘Okay, we’re not doing business.’ ”)