Lunch at The Four Seasons with: Arun Bhatia
Published by The New York Sun on 2005-10-20
Arun Bhatia was born into one of India's prominent real-estate families, but he didn't inherit its wealth or properties.
"I told my father that I wanted to succeed on my own," Mr. Bhatia, founder and CEO of his eponymous company, said yesterday. "My father, Ishwardas, had a very powerful personality. I knew that if I'd stayed in Bombay, I'd always be working under him. I knew that we'd have disagreements - and I had too much respect for him to get into squabbles over money. It disappointed him when I decided to come to America, but I wanted to be independent."
Some 15 months after arriving in America, Mr. Bhatia obtained a master's degree in real estate at the University of Wisconsin in Madison; he'd already acquired an undergraduate education in civil engineering in Bombay. At Madison, he was heavily influenced by a professor, the late James Grasskamp, who was also a developer. Grasskamp urged him to strike out on his own in this country.
"Professor Grasskamp often said to his students, 'If you're not an optimist, then don't get into real estate,'" Mr. Bhatia said. "I found that eerie. That line echoes what my father would say when I was growing up in Bombay."
Fast forward about two decades to October 2005. Mr. Bhatia has developed more than $500 million worth of properties, including some of Manhattan's notably designed residential buildings such as The Capri and The Strand, which won the "Project of the Year" award from the National Association of Home Builders. He has built dormitories for college students. He has raised single-family homes. And he has restored landmark edifices.
"It's hard for me now to believe that I started with barely $10,000 in my pocket," Mr. Bhatia said.
That money came from savings he accumulated during a two-year stint with a Chicago developer, a job that Mr. Bhatia obtained through the recommendation of his mentor, Professor Grasskamp.
"I learned how important it was for an entrepreneur to have control of the company and projects," Mr. Bhatia said.
In those days, Chicago's urban sprawl was spreading to the surrounding Midwestern farmland. Mr. Bhatia's employer was building one-and-two-family homes. When Ishwardas and Mohinee Bhatia came to visit their son, the younger Bhatia drove his parents through open spaces that would soon be transformed into suburban developments.
"But this is all farmland," the father said. "You should be building high-rises - just as I have in India."
It may not have been an epiphany, but that was when Arun Bhatia realized that he needed to go east to New York.
"New York was where the action was," Mr. Bhatia said. "Chicago was a great place. But New York was New York. It was the most integrated city in the world. From Day One, I had my eyes on Manhattan."
Manhattan wasn't where he broke into the real-estate industry.
"I was too proud to ask my father for money, even though he'd offered to invest in any business that I started," Mr. Bhatia said. "Driving around the city in those early days, I spotted two vacant lots near the Whitestone Bridge. The land was held by what was then called the Whitestone Savings and Loan Bank. They'd been forced to foreclose of the property because the man they'd loaned $20,000 had defaulted on his payments. So I offered the bank everything I had."
That amount was $10,000. The bank accepted his offer. It also gave him a construction loan for $100,000.
"That's one of the things I truly admire about America - the fact that a newcomer is given a chance by its institutions to build his future," Mr. Bhatia said. Here I was - no family ties in America, no connections, entirely on my own, and the bank trusted me with $100,000 of its money."
The trust wasn't misplaced.
Within a year, Mr. Bhatia had constructed single-family homes on the property, sold them, repaid the loan - and made a profit of $60,000.
"It's a cliche to say, 'Only in America,'" he said. "But yes, only in America."
Not long after his initial success, Mr. Bhatia was walking on Fifth Avenue when he spotted an abandoned nine-story building on the north-west corner of 35th Street. It had once housed a Bond's department store. The property was held by the Bowery Savings bank on account of a loan default.
"They sent me the keys, and I went inside that building," Mr. Bhatia said. "I had to use a flashlight. I felt like I was a detective in some movie, walking through darkened rooms and corridors. But I immediately imagined the possibility of converting that building into loft-style apartments, perhaps even duplexes."
The bank was asking $3 million for the building. Mr. Bhatia offered $1 million. They settled for $1,051,000.
Mr. Bhatia added two floors to the building and transformed it into an attractive residential complex. At that time - around 1980 - a one-bedroom apartment with 16-foot ceilings sold for $75,000. That same apartment would cost more than $750,000 today.
A dozen high-rise projects followed. Now Mr. Bhatia has several more in the works, including an eight-story luxury condominium complex on Wooster Street in SoHo, one of the few new buildings to rise in the historic district.
"Although I was always someone with ambition, America taught me how to excel in business," Mr. Bhatia said. "All of us have only one life to make a difference."
He spoke of his father again. In early May 1992, Mr. Bhatia and wife Asmita were visiting his parents in Bombay. His father was 83, but not particularly frail.
"I told my father that he'd taught me every fundamental I knew," Mr. Bhatia said. "I told him that I knew how upset he'd been with me for not returning to the family business."
Ishwardas Bhatia replied: "I'm very proud of you, my son."
It was the first time that the son could recall his father every saying that to him. Mr. Bhatia bowed and touched his father's feet in traditional Hindu style. Then he returned to America.
A few days later, on May 10, his father passed away peacefully.
Senior Writer and Global-Affairs Columnist