Pr o f i l e brought Dune in halfway through the project to “spread the risk.” According to sources close to the deal, Greenfield and Dune needed to sell now because they had deadlines looming to pay back investors in some of their funds. Neither firm returned calls. While most analysts call Balazs’s maneuvering shrewd, a source close to the deal took a more skeptical view of Balazs, saying his two recent sales were less about financial prowess and more about saving face. The source said Balazs likely sold his stake in the Standard International as a way to distance himself from the operating company because he knew Dune and Greenfield were about to force a sale and he didn’t want to be left operating the hotel if another high-profile owner stepped in and planted a flag there. Balazs vehemently denied that charge. “It’s silly. It makes no sense. If that were the case, I would have sold the whole stake and been done with it,” he said. In fact, Balazs said despite his Standard Internation sale, he hopes to expand the management arm of his business into more markets without adding new real estate holdings. He said the move would bring the brand more in line with companies like Marriott and the W. And if Balazs was desperately searching for an exit strategy in the Meatpacking District, other analysts added, he set himself up nicely with expansion plans already in the works, both in New York and in London. And he seems confident he hasn’t lost his touch. “We are interested in going where people who we know — who are the types attracted to our hotels and made them such unique places — want to be,” Balazs said. “There is such banal product in the hotel industry,” he added. “It used to be that the discount hotels were known for their sameness and lack of innovation. But now it’s the highest-end chains that have the same problem.”
pany from Balazs’s father for $700 million, according to news reports. But back in the 1980s, when the Downtown clubbing scene was in full force, Balazs was living in Soho. In 1985, he married Katie Ford, whose family founded the Ford Modeling Agency. (The two divorced two decades later.) Since splitting up with his wife, Balazs has been linked to a string of high-profile girlfriends, including Uma Thurman,
He showed a deft financial touch with the Mercer, said Paul Stern, a managing director of Wharton Equity Partners who handles hotel investments for the firm. The $33 million redevelopment of the Mercer required a large loan from a Japanese bank, which Balazs and Platt defaulted on when the economy turned, analysts say. But with the bank panicking, Balazs eventually bought back his loan for a mere $3 million.
The Standard High Line, which sold last month for $400 million
Still in the mix
The Chateau Marmont in Los Angeles, which Balazs bought in the 1990s
The Balazs backstory Born to Hungarian émigrés who fled their country during World War II, Balazs spent much of his childhood in Cambridge, Mass. His father, Endre, was an ophthalmologist known for, among other things, extracting a natural Botox from rooster combs, according to news reports; his mother, Eva, was a psychologist. After high school at the elite Buckingham Browne and Nichols, Balazs shipped off to Cornell University, where he got bitten by the writing bug and launched newspapers and magazines, he said. He then went to Columbia University’s Graduate School of Journalism, where “I was taught by some of the last greats of the Watergate era.” But his first job, in the 1980s, was with Biomatrix, a New Jersey–based biotech company he founded with his father. Years later, in 2000, Genzyme bought the com-
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His hotels are not large — some have less than 100 rooms — but like Ian Schrager hotels, most of them have been hot trendsetters with coveted restaurants and bars like the so-called Boom Boom Room at the top of the Standard High Line. But Balazs is not immune to market downturns. A deal to build a hotel in the Meatpacking District with a group of investors that included hip-hop star Jay-Z and developer Abe Shnay flamed after the group defaulted on their loan, according to news reports. It wasn’t the first Balazs hotel that failed to launch. The post-Sept. 11 downturn in 2001 forced him to abandon a hotel project at Kenmare Square in Soho, as well as at 40 Mercer. But Balazs reversed his fortunes by turning both into successful condos. He wasn’t as lucky at the 47-story ground-up William Beaver House in the Financial District, which he and partner SDS Investments defaulted on, and lost, in the midst of the recession. The private equity firm CIM Group swooped in in 2010, refashioning the condo as rental in the process. The 300-unit building is now reportedly going condo again. “I wish I still had it,” Balazs said.
Balazs teamed up with architect Campion Platt, left, on the Mercer Hotel and Chateau Marmont. Right: Google’s Eric Schmidt, a partner on Balazs’s new London hotel.
Pippa Middleton and Chelsea Handler. Balazs first began dabbling in the hospitality business in 1988, with MK, a club on Fifth Avenue, where he partnered with Eric Goode of the Bowery, Maritime and Jane hotels. “I was more of a passive investor,” Balazs said. Then in the early 1990s, teaming up with architect Campion Platt, Balazs bought two properties that put him on the map: The Chateau Marmont, a rundown Hollywood property, and the Mercer Hotel, a six-story former warehouse near his Soho apartment.
Later, Richard Born, a principal of BD Hotels, stepped in to get the project across the finish line. The 75-room hotel opened in 1997, and the pair still own it today. “It was not just staying with the project,” Stern said. “It was having the confidence to convince other people that they should stay in.” Today, Balazs’s empire still includes those two properties, as well as the five Standard hotels, plus Sunset Beach, on Shelter Island, down the road from one of his many homes. However, he no longer owns the real estate in L.A. and Miami.
But the hotelier is not hurting for business. And Balazs, whose soup-to-nuts, detail-oriented approach to his properties is industry legend, will not be disappearing from the Standard High Line, either. He still owns a small stake in Standard International, and now serves as its chairman and creative director. Balazs said that the investors who bought his Standard International stake last year include David Heller, a former Goldman Sachs trader. Heller, who is an investor in the Philadelphia 76ers, according to his LinkedIn profile, also holds a stake in the Standard East Village, according to Balazs. Heller, Balazs and other investors bought the property, then known as the Cooper Square Hotel, in 2011 for $90 million. Heller’s Goldman Sachs connection isn’t surprising. The bank was one of Balazs’s partners in the mid-2000s on his 40 Mercer Street condo. Likewise, Dune’s CEO, Daniel Neidich, founded Goldman’s first Whitehall Street real estate fund, a private equity fund that was at the forefront of real estate investment in the early 1990s. And while Balazs and his partners have sold the Standard High Line, neither the name nor the hotel’s services are expected to change, Balazs told TRD. In addition, since 2011, he’s ventured into a new business: seaplanes. His StndAIR airline whisks passengers from the heliport at East 23rd Street to posh destinations like East Hampton ($525 one way.) And now Balazs is expanding his real estate empire overseas. He told TRD he just won a bid to develop Continued on page 112
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