A retreat from Rockefeller Center

1995 Goldman Sachs profits from Mitsubishi's distressed asset.

When Mitsubishi bought Rockefeller Center in 1989, Japanese companies were in the midst of a US real estate binge. On the whole, between 1985 and 1993, Japanese companies poured $77.3 billion into the United States. But when the bottom dropped out of the US real estate market in the early 1990's, that trend reversed itself and Japanese investors, including Mitsubishi, began selling their distressed holdings. On the Rockefeller Center deal, Mitsubishi was caught short on a $1.3 million mortgage and the property was on its way to bankruptcy. Rockefeller family patriarch David Rockefeller, who had engineered the $1.4 billion sale of 80 percent of his family's interest in the property to Mitsubishi, was bitterly opposed to the decision to declare bankruptcy and joined an investor group headed by Goldman Sachs to reclaim his namesake landmark.

The long battle for the property drew headlines as well as rival bidders including a group led by Sam Zell that also included General Electric and Walt Disney Company. Mitsubishi eventually gave up its effort to maintain a stake in the property and abandoned its $2 billion investment to the Goldman Sachs group. The property was acquired for $306 million in cash and $900 million of debt, valuing the entire transaction at nearly $1.2 billion. In 2000 the property was sold for $1.85 billion to Tishman Speyer, who had been part of the Goldman consortium and had been managing the property, and the Crown family from Chicago.

The sale price was much lower than the $2.5 billion initially sought by the Goldman Sachs group, but still above the $1.2 billion it paid for it four years earlier. Nevertheless, the sale meant the property had, once and for all, left the Rockefeller family after 70 years of involvement.

“In one sense, it seems sad,” said David Rockefeller at the time. “But the fact that the new owners are good friends makes a big difference.”