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A real estate dynasty without heirs

Throughout history, real estate has been a tremendous source of wealth for a lot of people. Many family dynasties were created by accumulating property, holding it, and then riding the valuation wave.

Here in Toronto, there was the Reichmann family. At one point they had created the largest real estate company in the world (Olympia & York). But I’m not sure exactly how much of that wealth remains today following the company’s bankruptcy in the early 90s. That was a tough time in Toronto real estate.

In line with this, the NY Times recently published a fascinating account of the Wendel family in New York. In terms of how they conducted themselves, they were the polar opposite of some of today’s real estate families (i.e. Trump), but they certainly built an empire.

Here are two snippets from the NY Times:

In the early 20th century, the Wendels were perhaps the most powerful landlords in New York City, a dynasty with more than 150 properties in Manhattan worth over $1 billion in today’s dollars. The Wendels were the delight of the local papers, for, rich as they were, the family — six sisters and a brother, all unmarried — lived together in a shuttered mansion without electricity on the northwest corner of Fifth Avenue and 39th Street, and dressed in grim Victorian garb that had gone out of style half a century earlier. Tour buses regularly pulled up in front of “the House of Mystery.”

Alongside their austere lives, they also practiced a strict and disciplined approach to investing: 

Never mortgage a property; never sell anything; never pay for repairs; and never forget that Broadway moves uptown at a rate of 10 blocks a decade.

In fact, they were so draconian in their approach, that the sisters were supposedly prohibited from marrying. Unions were not allowed because that, according to the NY Times, “would disperse the accumulated property and put it under other names than Wendel.”

But in the end, this meant that the last Wendel – Ella, who died in 1931 – died alone and with no one to pass along the empire to. So instead it was distributed to various charities and the inevitable “cousins” that come out of the woodwork when a rich person passes.

I guess the moral of the story here is the old saying that you have to “give to receive.” From the sounds of it, the Wendel family didn’t like to do that.

Image from March 15, 1931 obituary

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