Group Hits Real – Estate Jackpot With Sale of California Property

The Wall Street Journal

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By Peter Grant Staff Reporter of The Wall Street JournalJan. 5, 2000 12:01 am ET

Heck of a Bet

How’s this for a great day at the race track:

A group that includes San Francisco investor G. William Tischer, former Chrysler Chairman Lee Iacocca and Allen Paulson, former chief executive of Gulfstream Aerospace Corp., has hit the daily double with the sale of a 41-acre property that used to be part of the Bay Meadows Race Track, seven miles south of San Francisco International Airport.

In 1995, the group signed a contract to pay the California Jockey Club $30.7 million for the site, on which it planned a 730-unit housing development. They were given five years to close the deal because that’s how long they figured it would take to get all the necessary approvals. All they had to put up was a $500,000 letter of credit. California Jockey agreed to bankroll the $3 million approval process.

Late last year, as the group closed the deal, it simultaneously resold most of the land to Dallas housing developer JPI and GE Capital, which are planning a large housing project. The price was over $50 million, according to people familiar with the deal, reflecting the sizzling housing market in the Bay Area.

Mr. Tischer declined to say exactly how much his group made. He says they decided to sell now because they feel the market is near its peak. “We would rather take our tremendous profit off the table now,” says Mr. Tischer.

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