Shvo Motion

By: Linda TischlerWed Dec 19, 2007 at 8:17 AM

One man's real-estate vision quest, and the $15 billion portfolio he's building along the way.

Tabula Rasa Michael Shvo on the East River, Long Island City. He plans to carve out a piece of the skyline for himself. And he just might pull it off.

Adam Tihany, the restaurant and hotel designer, thinks his friend Shvo's youth and success fuel the professional enmity. "Real estate is a very important and extremely lucrative business," he says. "In New York, where you don't have that much land and opportunity to develop, it breeds envy. Who can sell more, whose building is bigger, who has more gold in their teeth. That Michael's young and successful and good-looking makes the older ones yellow."

Plus, even in a city accustomed to Trumpian intemperance, Shvo set a new bar. "The allure of the bad boy is part of what's in play here," Steele says. "Every community needs its outrageous characters." If a week goes by without a Shvo item on Curbed, Steele says, "an email will come in with the subject header 'Michael Shvo,' and it will either be a random rant or a demand for more coverage."

In October 2004, Shvo left Elliman under circumstances that are still cloudy. Some sources claim he was fired. Shvo says there was a more compelling rationale: "I made the most amount of money that anybody had ever made in a year, so there was nowhere to go. If you're a shrink, you would probably say that once I get to where I want to go, I want to move on to something more interesting."

That something, he says, began taking shape one day in 2004 when he walked into the new Time Warner building at the southwest corner of Central Park. The structure was being touted as the ne plus ultra of New York real estate, but Shvo found the actual sales experience to be decidedly mundane. There was a little office with a scale model, renderings on the wall, a short video. "I said to myself, 'This is outrageous. They're really getting away with murder.' And a switch went on in my head," he recalls. "I knew there was a better way. And I decided, no more talk, it's time for action."

When he left Elliman, he took 27 members of his group with him. The Shvo Group has since dwindled to 12 as the marketing organization takes preeminence (the vestiges of the group act as a conventional brokerage while Shvo Marketing both promotes and sells all the new developments). The company now occupies two floors in a Tihany-designed office on Fifth Avenue--directly across from Trump--with zebrawood paneling and a Rody Grauman lighting fixture called "85 Bulbs." ("It's in MOMA.")

One key hire was Marci Sutin Levin, a ringer for the character Edna "E" Mode in The Incredibles, who had run marketing operations for Brioni and the Italian coffee company Lavazza. She originated the marketing campaign for 20 Pine, creating a 112-page, four-color magazine-style brochure, baited with libidinous and underdressed models--the better to lure those Wall Street alpha males.

"We were selling the entire Armani experience," she says, "like stepping into the brand. From the moment you walked in there, you were disconnected from the street. It's a bit like Vegas."

To maintain the illusion, Shvo signed up the tony concierge firm Quintessentially (famous for rounding up a flock of albino peacocks for JLo's wedding), to provide services for residents, including a free breakfast for anyone living above the 25th floor. He and Levin conceived the idea of keeping the sales office open 24 hours a day for time-strapped investment-banker types, a stunt that drew attention from CNN, ABC, the BBC, and Dutch, Japanese, and Korean television. The opening night party featured R&B star John Legend. There's a golf simulator and a Turkish bath in the basement.

Buyers were impressed. "I looked at 25 or 30 properties over a three-month period," says Edward Sander, who runs marketing for SAP. "No other property had a showroom that allowed you to have the emotional experience of what living in the building would be like." Within two days of opening, 30% of the building was sold, not bad for a project just blocks from ground zero. Currently, 75% of the condos are under agreement--all, says Shvo, at asking price.

"At the end of the day, what we do translates into real dollars," he says. "At 20 Pine we're 30% above any other building in the neighborhood. And we're $100 million over the estimate of what the project would bring when we started."

There's no way to verify Shvo's numbers. But he insists he gets at least two or three calls a day from developers looking for a taste of the Shvovian magic, especially those with projects languishing in the market. He says he turns away 95% of the business he's offered, limiting himself to five or six new clients a year.

Shvo takes a percentage of sales, the magnitude of which depends on the project. Industry experts say marketing costs for a run-of-the-mill project typically run about 6% of the development's cost; in luxury buildings, that can hit 10% or more. Given Shvo's stated $15 billion portfolio, his company stands to rake in revenues well over $1 billion over the next three years.