I called it Alice in Wonderland because when you work in Donald's office, everything that's up is down. Everything that's black is white. I became absolutely insane.
David Simon knew that at $5.2 billion he'd paid a premium for Corporate Property Investors (CPI). “People thought we were nuts,” he'd later say, but he anticipated a heated contest among the “New York sharpies” for the GM Building, for which he wanted $800 million. The “geniuses,” as he sarcastically referred to the big New York real estate families (he's from Indianapolis), would surely line up for the prize and he'd get his money back and—crucially—avoid paying taxes, by flipping it as he bought it.
In February 1998 he hired Lazard and Morgan Stanley to shop the building. Both industrialist Marvin H. Davis and Vornado expressed interest; both asked to sign confidentiality agreements and enter the so-called war room—where they could view the building's data. This meant they were serious. But Simon was worried that neither would make a credible bid: He felt Davis looked at everything and Vornado would never get beyond a price in the mid-700s. “I begged them to get serious,” says Simon. “Now, [Steve Roth] will deny this, but I begged him to get serious.”
He soon realized that he was the victim of timing. The Internet was booming and real estate developers were worried that office space values would plummet. Another problem: The people at Vornado had no idea they ...