Howard Lorber on driving to McDonalds in his first Rolls Royce- #RealTalk

The first place I went in the Rolls-Royce was McDonald's drive-thru, literally like off the lot. And then yeah, exactly, because I just thought it was cool to go to McDonald's in a Rolls-Royce. Why not, right?

Thank you for having me here today, Stephen. I really appreciate it.

Well, I would say that one of the good stories right now is how well we're doing in December. It's really going to be a very big month for us, and you should be happy about that. Also, us includes you, so yes, we're having a great story. And also, I think in general, the other great story is really how some of the markets that we're in are performing very well. New York has been a little slow, but I'm a big believer in New York City. When I started spending more time in Florida, I asked a bunch of guys that I knew that were moving down to Florida, taking their families, their kids, and I did a survey. Of the 23 people I asked, not one of them sold their apartment or townhouse in the city. That means not necessarily they're coming back full-time, some of them probably will, but they want to have a place in the city because New York City is the greatest city in the world. It has everything. If you put all the other great cities together, everything they have amongst them, New York City has in one place. So I think that New York City will be the number one second home market for the world.

That was great and positive. What's a negative? Anything personal? The negatives were there was really nothing negative. Hey, look, after you have an unbelievable year like 2021, everything seems negative after it. And what I tell myself and I tell everyone is that you really can't measure against 2021. 2021 was... I don't know what it was. We all were very thrilled about it because we all made a lot of money, and it was a big year. Then came 2022, and that started better and then went down, and then into 2023. So I think that's probably the bad part of the story, because people want to use 2021, and I tell them, look, that's not the point. You have to use, if you want to think back and you want to look at what prices really were, more realistic, look at 2016, 2017, 2018, 2019. Those are the ones that you have to point to. And that's one of the reasons there is very little inventory, because the sellers want to get a price like it was in their mind in 2021, and that's not happening today, not with these interest rates.

I was born in the Bronx, near Yankee Stadium. I lived in a two-family house that my grandmother owned. So my parents were in one part of the house, and my grandmother and grandfather lived in the other part.

This is my mother's side. My father's side, my grandfather on my father's side was living in Florida. He was on his, I think, third, fourth, or fifth wife. I lost count. But I grew up with my grandmother and my grandfather to a lesser degree, because my grandfather passed away when I was about five years old.

My mother's side. My mother's side was from Greece, from Thessaloniki. When she passed away, we found three birth certificates. One said she was born in Turkey, one said she was born in the Ottoman Empire, and one said she was born in Thessaloniki, which was Greece. You can make the case that they all were the same because they kept changing in those years. The best thing for me was my grandmother did the cooking in the house. I remember when she'd make my lunch for school, all the kids would be eating tuna fish sandwiches and peanut butter and jelly sandwiches. I was eating feta cheese sandwiches and spinach sandwiches, which was the Greek style.

Exactly. And I was lucky enough to get my Greek citizenship. It was a little difficult because of the different dates on the passports, different places, but I got my passport two years ago and my citizenship.

I wanted to do it to honor my grandparents.

Well, Israel it's easy. Just move there. But don't forget, in Greece, when the war started, when the Nazis invaded Greece, there were 100,000 Jews. They killed 95,000. They took them to Auschwitz and murdered them. So there were very few left. My grandparents had left early. They were teenagers. They left in the 20s, not in the late 30s and 40s.

They left on their own. They were teenagers.

Pretty much. My grandmother would tell me that pretty much everyone that they knew and relatives and friends all perished during the Holocaust.

My thoughts are similar to Spielberg. It's pretty awful. Maybe more awful. I always say in all bad events, there's some good things that happen. And the good things that happen are sort of awful because we all know now how the schools are, what the schools are telling people, from the lower grades through college. With what we used to consider the best schools in the world, whether it's Harvard, Columbia, Penn, these schools had presidents and chairmen and plenty of the professors. They weren't doing the right thing with the students. They were basically taking the position that it's okay if they talk about from the river to the sea, because no one knows what that means. But that's not true. Everyone with half a brain knows what it means. And they were letting certain of the school population that were really anti-Semitic, they let them voice themselves as free speech, which is ridiculous. So I think we learned a lot. I think a lot of us knew that was going on for years, but it really came out. I have to say, I always knew it. I've studied the Holocaust. I knew that it could happen, but the veil was certainly lifted after October 7th. We were all in Palm Beach on October 6th, very different. One day. But you talk about a silver lining, it's unifying a lot of people, so that's wonderful. But also, I think different than the Holocaust, people are standing up. Certainly people such as yourself that are in positions of contribution and make a difference, and saying you've lost my support or what it might be. I'm very proud, I'm very close with Robert Kraft, and he put in a lot of money for the anti-Semitism box. That was a while ago, he started that before all this happened, about a year and a half ago. Good for him. Thank God for people like him.

Mark Rowan, who really started it by writing the first letter to Penn, he's the head guy at Apollo. It's a major company. When he first came out, he really was the leader of all this stepping up. He was amazing. Then you had Bill Ackman follow, and lots of other people follow. Thank God. So there's a little bit of a silver lining. And the Jews aren't going anywhere. But it's a sad time.

I have a sister that's five years younger than me, and a brother that's ten years younger.

My grandmother, who we lived with at the time, we moved from the Bronx. She sold the house. We moved to New Jersey. My sister and my grandmother lived in one bedroom, my brother and I lived in another bedroom, my parents had a bedroom, and there was only one full bathroom for all six of us. There was a half bath, but only one full. Now I can't even share a bathroom with anyone.

It's still fresh.

It's interesting because everyone used to say to me, I don't know why, my parents' friends and stuff, 'Oh, you're really going to be great, you're going to be a winner.' When I was younger, I didn't really figure out why they thought that. They were saying something, but I didn't know what it was exactly. It's not that I wasn't confident, I thought I was confident, but I still questioned it. If everyone tells you how great you are, and then what happens if you're not so great? Then you're really depressed. So I was worried.

I went to college and I wanted to be an electrical engineer. My father was an electrical contractor. So I go to school and I wanted to have an engineering program. After the first year, they stopped the program because there weren't enough people enrolling. So I asked around, 'What's the easiest way to graduate this place and get out of here?' They told me the easiest way to graduate is become a sociology major. So I said fine, I became a sociology major. I didn't even know what it was. I wasn't going to be a social worker, I knew that. So I got through it, it was pretty easy. But then when I graduated, I started thinking, what do I want to be? I want to be something in finance.

I was very good with numbers. I had very high SATs in math and like zero in English. So clearly I knew where to lean. I tried getting a job at a stock brokerage firm, wanted to be a stockbroker. I finally got one at what you would call today a bucket shop. Those were the only guys that were hiring. Ultimately that went out of business. I went to a bigger firm, a New York Stock Exchange firm. I enjoyed it and I did well. I decided that to really be successful, you have to know how to read a balance sheet, read a P&L, look at the numbers. So I went back to school and got a master's degree in accounting at the same place. I got an honorary doctorate there later, but it was important to go back. How could you really be a businessperson in business if you can't read financial statements? I think that's basic.

I was a stockbroker. I went back part-time for my master's. I was a stockbroker for five years of a bad market. One of the interesting things I tell brokers today in our business, real estate business, is that a bad market is not necessarily bad for a broker. What I did was I just cold-called and I opened up so many accounts. Why? Because I didn't have these accounts. I didn't lose any money for them. All of them lost money with their existing broker. I was a newbie, I didn't have time to lose their money. But if I had them as clients, they would have lost money with me also because you can't fight a really bad market. So I opened up hundreds of accounts. That's how I started the business. About 1975, I left the business and went into the insurance business, mostly life insurance and pension plans, sales.

I didn't like the idea of people losing money when you can't control them losing money because in a bad market, they're always going to lose money. I never knew what to say when someone would call me. The worst time for a broker in a bad market is tax time because now they look at that tax return and see how much money they lost. They'd call and say, 'Oh, I lost $85,000,' and I'd say, 'Oh, not bad, I thought you lost more.' I didn't know what else to say. So I was uncomfortable. I didn't like it. When you talk about insurance and tax planning and estate planning, no one ever complains about it. First of all, when they're gone, they're gone. But on their deathbed, they realize that their family is going to get taken care of. So you're giving them security.

Exactly. I got all the degrees. I got a Chartered Life Underwriter degree, I got a Chartered Financial Consultant degree. I was successful.

I got married when I was 21 or 22. Brian and Michael came along five years later. Brian was born, and then another five years until Michael was born. Two kids, two grandkids later. Not bad.

Yes, because Bob was working for the insurance agency that I was putting my business with. Bob worked for the guy there, but he didn't like it, so he joined us. We had a small brokerage firm that we did very well with, a trading firm. This was in the 80s. Ultimately, around 1988, I sold that business to a big public company, Harcourt Brace Jovanovich, who was a publishing company but had also bought a life insurance company. They really wanted to get my business, so they figured the way to do it was to buy my company. I still ran it. Ultimately, I ended up getting it back. I sold it for stock. Usually you sell it for stock and by the time you're allowed to sell, the stock plummets. I was in a situation where by the time I was ready to sell the stock, it was probably triple what it was when I sold the company. So I was able to sell. A couple years after that, the company was having troubles, and I ended up buying it back for like nothing.

I was just interested in it. I hadn't really bought anything in the earlier years. Later years, I bought some stuff. If you asked my kids, they would say we would go around to houses that we saw, open houses and stuff. If no one was there, they would tell you my father tried opening the window and having us climb in to open the front door. It was like breaking and entering, but in a nice way. They were into it also.

Along the way, when I was in high school, my father wanted me to go to work with him on the weekends when he had to work. The one thing I learned very quickly is you don't want to work weekends. He was a little volatile. He was great, I love my father, but he was a screamer. So I quickly thought, maybe I was 14 or 15 at the time, I actually believed and thought that I was smarter than my father, which of course wasn't true. I learned years later that I wasn't so smart. My mother was very smart. She graduated high school at 15 and graduated Hunter at 18. She didn't really work much, she took a job at one point. But the problem is when we moved from the Bronx to New Jersey, my father applied for a job with an electronics company. He had to take a security clearance check because they did some government work. They found out that my mother, while she was at Hunter, was a member of the Young Communist Party. I found out later everyone was in those days. That was like what you did. You joined the Communist Party. I think the whole school was a member. My father got the job, so it didn't really mean much. My mother was the type that all my friends, when they had trouble with their homework, would come to our house to have my mother help them.

Yeah. My father died young. My mother died a few months before her 90th birthday. My father had a stroke. I think he passed away at about 73. That's young, but 90 is wonderful.

No, I wanted to do what I liked, and that was real estate. A lawyer friend from Long Island called me and told me they had a client that had a real estate brokerage company only in Long Island. There were two partners: one was Dottie Herman, and the other was a guy I don't even like thinking of his name. He told me Dottie was great, but the other guy was terrible. When the company was doing well, Dottie was running it, and the other guy didn't really care. But as soon as it was doing poorly, he came in to take it over, and then after a few months it was doing bad again. So Dottie would come back in, and it would be better, then back and forth. I met Dottie first. She told me about the partner, and I met the partner, and boy, he was a disaster. So I made a deal with him that he would still get paid but he can't come to the office. That lasted two weeks. Then he started coming to the office, and basically we threw him out. Then I was able to buy the rest of his stock out. So we each had 50%. My company had 50%. 20 years ago, we bought Douglas Elliman. We bought what was called Presidential Long Island Realty about five or six years before that. With the other guy gone, Dottie did a good job, and it became profitable. In fact, Realogy, or whatever it was called in those days, offered a lot of money. I knew Dottie wouldn't sell, but I said to her, 'Think about it. It's not going to change my lifestyle, but you've never had any money, and this way you'd have some money that would take care of you and your family for years.' I said take as much time as you want. She called me the next morning, and I said, 'I know what you're going to say.' She said, 'I don't want to sell.' So we decided what's our next step. We were in Long Island, so we decided we want to open in the city. I was living on the South Shore of Long Island, and Dottie was on the North Shore. I was friendly with Andrew Farkas, who owned Douglas Elliman at the time. I figured there was talk he had it in a public company. I came to the conclusion in those days that brokerage companies, whether stock brokerage or real estate brokerage, are all volatile. You can't get consistent growth. There's always bad years, and investors like to see consistent growth over long periods. So I knew he had a commercial business and a residential business. The commercial business was the old Edward S. Gordon commercial business, and the residential was Douglas Elliman. I called him, and he said he didn't want to sell, but I knew there were stockholders trying to get him to sell. So I came into the office maybe a month after I spoke to him on the phone. I walked into the elevator, and I looked up, and there was Andrew Farkas. I said, 'Hey Andrew, talk for a couple of seconds.' Then he got off at the 32nd floor. I went up to the top floor where my office was, and I called the concierge and asked him who was on the 32nd floor. He told me it was a private equity company. It was actually Diane Feinstein's husband, and he had bought CB Richard Ellis. They controlled CB Richard Ellis at the time. Now I was more sure that Andrew was really going to sell the company. So I called him and left a message on his phone because I knew he was still downstairs. He called me back late in the day, and I said, 'Andrew, what's the story?' He said, 'Okay, you called me, I'll tell you. We want to liquidate the company. We have a deal to sell to CB Richard Ellis, and we have a deal to sell Douglas Elliman to Cushman & Wakefield.' Before I said okay, he said, 'Because of our market share and their market share, you have to go through FTC approval, and that's going to take a while. Then you may have to divest offices and stuff.' I said, 'It's perfect. I have no offices in the city. We're just in Long Island. We had one teeny office in the city, it was nothing. So I could close immediately. Just send me over the contract. Whatever they're paying, I'll pay the same, and we'll get the deal done quickly.' That's really what happened. That's how we got it.

I still care about Farkas. He's a very smart guy.

Well, look, the fact is you can only do that if you really love the business. I love the business. I like communicating with people. I like to help the brokers. I think most companies our size believe that the buyers and sellers are their customers. I believe that the brokers are the customers, and the buyers and sellers are their customers. So if you believe that, where should I spend all my time? I should spend it with the brokers. I learned early on a couple of things. I learned that I would always pledge to myself that I would return every phone call the same day I got it, even if it's to say, 'You know what, I was tied up today, I'll call you tomorrow.' That's been that way my whole working life. I will admit sometimes it gets so crazy, maybe it takes me two days, but I'll always call them and say, 'Hey, I can't speak to you today, I'll call you tomorrow.' Now it's easier, you can text or email. So that was an important factor. I know what I'm good at and what I'm not good at. I'm not really good at taking a new person and making them a good broker. But what I'm really good at is taking a good broker and making them a superstar. You know from where you came, all the people that we brought in from other companies who were substantial, if they were doing $2 million in commissions, within a year and a half, two years, they were doing $6 million.

Same thing. Why should you be different? Smart guy.

I can give you a whole list of people that don't like me. Believe me, there's a whole bunch. Something else I learned is that very important in business is a great brand name. No matter how bad the management is in a company with a great name, those companies survive even with terrible management. There were three specific companies that I was involved with that had great brand names and lousy management. The first one was Nathan's. The hand workers had started the company, they really didn't do anything to improve it. Then we came in. The stock was public, we took it private, then we took it public again. The stock went from $8 to $2, then to $125. It survived. It started in 1916 and survived through all the years of the hand workers. Then we bought, with a partner, Western Union. Western Union was the old telex business. We transformed it. A great brand, a very trusted company. We took control of it, went into the money transfer business, changed the management, and were able to sell it in a bankruptcy court for $1.3 billion. We owed $900 million, so we ended up with $400 million in a shell company that we then used to buy other companies like Douglas Elliman. Brand names are very important. It's almost impossible, no matter how bad the management is, to kill a really good brand that's been around for a long time.

Uncle Harry was in the garment business. He was always, companies come and go, good years, terrible years. He gave me a car. I was 16 or 17, my first car. The bad news about Uncle Harry, may he rest in peace, is that he was a gambler. Whatever he made in the business disappeared. One day he came and told me he had to take the car back because he has to give it to the bookies that he owes money to. I said okay, handed him the keys, and he drove off. That was the end of my first car.

The first place I went in the Rolls-Royce was McDonald's drive-thru, literally like off the lot. Because I just thought it was cool to go to McDonald's in a Rolls-Royce. Why not? Probably no one else ever did it, so I figured I would do it.

In fact, that's where I'm going after this. We have our annual event. Silver Shield was started by George Steinbrenner. The rationale was to have an organization that would pay for four years of college education for the child of any police officer or firefighter killed in the line of duty. When he passed away, I took it over with a friend of mine and continued it. It's been ongoing. Steinbrenner passed away in 2006. We built it up. A lot of it went to 9/11 stuff, but that was a real mess with all the cops and firefighters. Thank God they had another fund to take care of most of those. But we take care of these kids. Tonight, we'll have the people on the board of Silver Shield. I'm the co-chairman with a friend of mine. We'll have a lot of the widows show up. It's great. And lots of police and fire. The chief of police, the chief of the fire department, and also from some of the other areas we cover, like parts of New Jersey, Westchester, and Connecticut.

I don't know. I think it's just something that caught me. I wanted to do it. I'm pretty varied in my giving and charities. My latest one is West Point. When I was chairman of the museum, I was asked to give a speech for the museum at West Point. I said, 'West Point? Why West Point?' They said West Point has a Holocaust studies program with 150 cadets enrolled. I was shocked. So I went up there and did it. I loved it. It was fantastic.

Nope.