David Lichtenstein

Lichtenstein developed an avid interest in property during his twenties and launched his real estate career. At the time, he was living in a two-family home in New Jersey.[3] In 1986, Lichtenstein used $89,000 in credit card debt to buy a multi-family home in New Jersey.[2] Over a three-year period, Lichtenstein reinvested capital from his properties to fund the down payments on more properties. He then leveraged the new properties with loans, allowing him to continue to add to his portfolio.[4]

Following the success of his small real estate business, Lichtenstein founded The Lightstone Group in 1988.[4] He is the CEO of the company.[5] The company was founded in Lakewood, New Jersey, and grew quickly during the early years of the company's history. During the first few years of Lightstone's activity, Lichtenstein focused on acquiring multifamily properties in the New Jersey area.[6]

In the 1990s, Lichtenstein grew The Lightstone Group's portfolio to over 20,000 apartments in 28 states. The company was recognized as one of the top 30 apartment owners across the United States around the same time. From 1997 onwards, there was a housing price boom in the United States, which lasted for nearly a decade. The boom was good for the existing portfolio Lichtenstein had amassed, but it made it more difficult to find affordable properties to purchase.[6]

The housing bubble that began in 1997 led Lichtenstein to look elsewhere at other real estate opportunities, which included property outside the United States for the first time. In 2000, Lightstone began to invest in retail strips, and subsequently into investing in malls.[6] His first major purchase in retail came in 2002, when he acquired a Prime Retail-run mall for $36.5 million. The outlet mall was based in Puerto Rico and was one of many Prime Retail developments that required redevelopment at the time of purchase. Lichtenstein stated in an interview that outlet malls at the time had become an "out-of-favor stock in an out-of-favor industry".[7]

After seeing the potential of the single mall in Puerto Rico, Lichtenstein made his first major deal in the real estate market in 2003. He purchased the entire Prime Retail portfolio for $638 million. The portfolio consisted of 37 properties spread across a number of states in the US, in locations such as Pleasant Prairie, Wis., Odessa, Mo, and Gaffney, S.C.[8] The acquisition made Lightstone the second-largest owner of outlet malls in the country after Chelsea Premium Outlets, owned by Simon Property Group Inc., the nation's largest mall owner.[4]

Lichtenstein announced in 2006 that he would be launching a real estate investing trust (REIT), which allowed Lightstone to raise capital from outside investors.[4] The REIT, named Lightstone Value Plus, had a fund value of $300 million and aimed to invest in a mix of office, retail and other commercial properties. According to The New York Times, many developers at the time were focusing on "trophy buildings" in major United States cities. His strategy differed from that of many major investors at the time, as he stated, "do you want to go to a fishing hole where there's a lot of other people fishing, or do you want to be where you're the only guy with a hook in the water? We would concentrate on any place where the big boys aren't."[9]

During the same year, Lichtenstein returned to investing in housing with a number of large investments in affordable housing. He purchased 5,000 units across 19 multifamily rental properties in Detroit. It was reported that the entire deal was for a total of $200 million.[10] His second housing deal of the year was in Birmingham, Alabama, where he spent a total of $303 million on a number of apartment buildings.[11] While expanding the diversity of investments, he also moved into hospitality in 2007 with his biggest single deal to date. Lightstone acquired Extended Stay Hotels for a total of $8.1 billion, making Lightstone the parent company of one of the largest mid-priced hotel brands in the United States. At the time, it was said the hotel group had 683 hotels across 44 US states and Canada.[12] Extended Stay later sought bankruptcy protection due to the Great Recession.[2]

Lichtenstein sold Prime Retail in 2010 to Simon Property Group, who were already the biggest outlet mall owners in the United States. The $2.3 billion deal freed up cash for further investments.[13]

Lichtenstein's Lightstone Value Plus was one of a number of REITs attracting attention from investors, due to market instability. In late 2010, REITs raised an estimated $9 billion, with a 6.5 percent annual yield.[14] Lightstone Value Plus was the 18th-largest non-traded United States-based REIT, with a dividend of seven percent. That percentage was much higher than many other non-traded REITs during that period.[15] Following the success of Lightstone Value Plus, Lichtenstein launched a second non-traded REIT. Lightstone Value Plus II followed a similar strategy to the initial fund, focusing on investments across a number of markets.[16]

The sale of Prime Retail and both REITs gave Lichtenstein a large fund to invest throughout 2011. According to reports, there was an estimated $350 million remaining from the Prime Retail sale, which was reinvested into new deals. In 2011, Lichtenstein purchased Festival Bay Mall in Florida for $25 million,[17] Crown Plaza Boston North Shore hotel for $10 million[18] and a residential development in Long Island City, New York, for $19.3 million.[19]

Lichtenstein and Lightstone Group announced the launch of Phoenix Development Partners, which aimed to develop large-scale renting opportunities in New York City.[20] Despite shifting his focus to New York City-based investments, Lichtenstein continued to grow his portfolio in other locations across the United States. In September 2012, Lightstone Group announced they would be purchasing a $51 million residential development in Long Island City.[21][22]

In 2013, Lichtenstein and Marriott completed their first deal, the purchase of three Marriott-branded hotels in Iowa and Ohio for $21 million.[23] Later that year, Lichtenstein traveled to Israel to discuss entering the Israeli debt market.[24] Loans from Israel were used to underwrite a number of developments in Brooklyn's Gowanus Canal area.[25][26]

Following Amazon's decision to abandon its plans to build a headquarters in Queens, Lichtenstein called it the "worst day for NYC since 9-11," adding that "this time, the terrorists were elected."[27]