Orthodox Real Estate Tycoon Plans IPO

 

Family-owned Borough Park real estate business, Clipper Equity, has announced its plans to sell a significant portion of the family’s properties in an initial public offering with aspirations of getting $144 million through the New York Stock Exchange, despite many analysts’ concerns regarding the state of the economy and rising interest rates.

The Wall Street Journal published an article on October 11, based on an interview conducted with Jacob “J.J.” Bistricer, and his father David, who are the principals of Clipper Equity. The 66-year-old David described their IPO plans, saying, “We’ve always been interested in the public market. We think it is a good way for us to grow.”

The plans the family has for an IPO are not advised by market analysts, who cite that the current value of real-estate assets in public markets are only at a 5 percent to 10 percent discount in the private market.

Clipper Equity was originally established in 1951, by Holocaust Survivor Moric Bistricer. The WSJ describes the company, saying “Clipper also has been an active investor in New York’s recent real-estate boom. The company has teamed with Chetrit Group to buy five properties, including the Sony Building on Madison Ave. which sold for $1.1 billion in 2013. Construction to transform the building into a retail, residential and hotel site is to begin next year.

The two families also purchased a Brooklyn Hospital building in Prospect Park South and the former Cabrini Medical Center in Manhattan which being reborn as a condo complex. The Bistricers own 75 buildings, including those they own with the Chetrits, according to people familiar with the company.”

In 2005, Jacob “J.J.” took on a difficult job, when he was “put in charge of Clipper Equity’s effort to fix the broken pipes, leaky roofs and myriad other blights among the 12, 000 violations plaguing a massive rent-regulated complex in Flatbush Brooklyn that it had purchased in 2005. His family wasn’t the only one watching: Then-Public Advocate Bill de Blasio’s office criticized the Bistricers in 2010 and 2011 because of conditions at the buildings.”

J.J. had survived the difficult tasks first assigned to him when in joined the family business. Today the Brooklyn complex has fixed nearly all the violations and is named Flatbush Gardens. The family is even thinking of expanding in a way to help provide more affordable housing to the city.

Now at 34, the chief operating officer J.J. is working with his father in efforts to get the IPO going. Out of the money gained through the IPO at least $100 million is set for acquisitions, while $30 million is to be used for restoring properties they already own.

This article was first published at the Jewish Voice NY, by Charles Bernstein 

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