Economy Watch: Top Billionaires Include a Few RE Moguls

It's the time of the year again when Forbes magazine publishes its list of the richest Americans.

September 23, 2010
By Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user morrissey

It’s the time of the year again when Forbes magazine publishes its list of the richest Americans. Unless one counts the children of Sam Walton as making their money from real estate–and it’s a stretch, since real estate is merely the backdrop on which Walmart offers low prices, always–then the top real estate mogul on the list is Donald Bren of Newport Beach, California, the chairman of the various Irvine companies whose fortune weighs in at $12 billion, according to the magazine. Among recent headlines about Bren, this from a Forbes blog was notable: “Bren Declared Not Liable for Wild Opulence of his Children.”

Though best known as a banker, the richest man in Dallas and 43 on the Forbes list, Andrew Beal, was a real estate grave dancer in the 1980s. The success of those investments allowed him to found various financial service companies in the 1990s, and eventually to become a high-stakes poker player, reportedly winning more money in a single day at poker than anyone in history.

Sam Zell comes in at number 60 on the list, with a total net worth of $4.4 billion, and immediately following the salty Chicago real estate billionaire are Richard LeFrak and family at $4.3 billion, whose LeFrak Organization has vast real estate holdings in New York, New Jersey and elsewhere.

Blockbuster on the Rocks

Dallas-based Blockbuster Inc., once king of the video-rental business, is feeling the clammy fingers of Chapter 11 around its neck, according to Bloomberg on Wednesday, citing “a person of knowledge.” The company is reportedly going to try to restructure itself and its $900 million worth of debt.

Will it emerge as some kind of entertainment entity? Investors don’t seem to have a lot of confidence in the retailer’s future. On Wednesday, Blockbuster shares were trading at 5.5 cents each, almost literally a penny stock.

Whatever happens, many of Blockbuster’s retail locations are likely to close. The newly refashioned company might continue to play catchup with the likes of Netflix, but so far progress on that front for the old Blockbuster has been slow. According to Internet market research firm ComScore, Blockbuster’s web site attracted some 2.9 million unique visitors in July of this year; Netflix had 21.7 million visitors during the same month. Maybe people have a long memory for the bitter taste of the late fees that Blockbuster used to charge so eagerly.

Data Center Landlord Becomes REIT

CoreSite Realty Corp. took another step toward its conversion into a REIT on Wednesday when it priced 16.9 million shares of itself at $16 each for an IPO on Thursday. Previously the company had forecasted a range of $15 to $17 per share for the offering. The shares will trade on the New York Stock Exchange under the symbol COR.

If everything goes well for CoreSite, the offering–including an option for the underwriters to buy 2.5 million more shares–would raise about $311 million, or $245.8 million net for the company. CoreSite operates in a rarified CRE niche: data centers, of which it owns 11 that total about 2 million square feet.

Wall Street had a down day on Wednesday, with investors reportedly much more eager to buy gold, which has been flirting with $1300 an ounce lately (no bubble possible?). The Dow Jones Industrial Average lost 21.72 points, or 0.2 percent, while the S&P 500 dipped 0.48 percent and the Nasdaq declined 0.63 percent.