Evaluating the worth of the Tishman-owned buildings was relatively straightforward, since real estate values can be computed based on location, occupancy, current rent levels, and the like. Our portfolio was expected to sell for between $100 million and $150 million. Seventeen of the buildings would be bought as a package by the Equitable Life Insurance Company for $107 million. (Later, Lazard Realty would buy the rest for an additional $78 million.) Equitable also agreed to hire Alan’s management division for the first five years to manage the buildings they purchased, so that division would live on as a unit of Equitable. But figuring out the value of the Tishman Construction Corp., the division that I had initiated and ran, was more complicated. The family decided to engage Morgan Stanley to provide an independent appraisal of the worth of the construction division.
The appraisal that Morgan Stanley rendered, of a bit more than $2 million, angered me, as I felt certain that this price seriously undervalued my division. I knew that a fee-for-service provider was more difficult to put a price on than were sunken assets like buildings, but this guess by Morgan Stanley was insultingly low. The figure offended me both as a Tishman stockholder and as the division’s creator and chief. So I decided to take matters into my own hands. No one else in the family was particularly interested in what price my division would fetch, but they were most anxious to bundle the division with our real estate assets and sell it within the one-year window that would provide our stockholders with the greatest tax benefit. As an insider, I was prohibited by law from buying the division, and at that point in time I had neither the intention nor the wherewithal to buy it. But I had grown the division over the years, it was my baby, and I wanted to keep it intact.
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So I walked across the street—literally—to Rockefeller Center, the headquarters of the Rockefeller empire, known as the Rockefeller Center Corporation. I had built for that division and knew its top people and they knew me and my team. The Rockefeller family empire was vast, with holdings in New York not only at Rockefeller Center but in other parts of the city, as well as in other areas of the world. I asked Alton G. Marshall, head of the Rockefeller Center Corporation, if that entity would be interested in buying our construction division, and what he thought the price ought to be. Al Marshall was a former chief of staff to Governor Nelson Rockefeller, a former chief of an important savings bank, and a man who knew his real estate. As the man in charge of running the whole Rockefeller Center complex, Marshall could value our service company in terms of its worth as a separate operating entity, and also in terms of its worth to Rockefeller to use for construction projects that Rockefeller already had in the pipeline.
Marshall immediately said that Rockefeller Center Corporation very well might be interested in buying our division. They had previously purchased the very large real estate brokerage firm Cushman & Wakefield, which had a division that advised clients on construction, and the Rockefeller pipeline contained many building projects for which a Rockefeller-owned construction division could be of great value. Once Marshall indicated Rockefeller Center Corporation’s interest, I stopped looking for any other buyer. I wasn’t interested in a competitive situation that would only slightly ramp up the price but that might bear with it some adverse consequences for me or my construction colleagues if someone other than Rockefeller bought us. I wanted a sale that would keep us intact and would allow us to continue doing what we had been successfully doing. By then, we had a reputation larger than we had once imagined possible, having recently built the three tallest buildings in the world, the 100-plus storied Hancock Center in Chicago and the two World Trade Center towers in New York.
I also wanted something else from the sale of the public company: I yearned to take the Tishman name, my division’s distinctive logo, and the family legacy with me. To do so was a complicated task. The public Tishman company’s residual obligations and liabilities had to be closed out, and there were other concerns. Rockefeller Center Group argued, and I concurred, that the name, logo, and corporate legacy were an integral part of their purchase price, a price to which I had agreed. This practice of including the logo and corporate history is generally called the “key,” and ours featured the history of the Tishman family endeavors for the preceding seventy-five years.
The key was valuable because it bespoke continuity; and in construction, as in other professional services, your reputation and longevity in the business are very important; by bringing along the key I was stressing the qualities of continuity and integrity.