What's Behind Mort Zuckerman's Citigroup Crush?
Publishing and real estate mogul Mort Zuckerman was ubiquitous on MSNBC yesterday: he appeared for a ten-minute stint on Morning Joe and three separate segments of 1600 Pennsylvania Avenue, the network's 6 to 7 p.m. primetime show. Mika Brzezinski, subbing for David Gregory that night and hosting without Joe Scarborough that morning, seemed impressed with Zuckerman's wisdom about the bailout of Citigroup.
But would she have been as wowed if she had known that the banking giant was one of Zuckerman's biggest tenants?
When Zuckerman isn't running his media properties, the New York Daily News and U.S. News & World Report, he's the chairman of Boston Properties, the largest office real estate company in the country, as Brzezinski kept reminding us when she introduced him. What she didn't tell us (and he didn't either) is that Citigroup rents more than a million square feet from Zuckerman's company -- trailing only the federal government and Lockheed Martin on its list of top 20 tenants.
Since Citigroup's rentals from Boston Properties -- as opposed to those of the government and Lockheed -- are concentrated in Manhattan, in terms of income the bank may well be Mort's best customer. And not only did Zuckerman pay more to acquire Citigroup's world headquarters, 399 Park Avenue, than had ever been spent on an office building in history prior to the 2002 purchase; he also owns Citigroup Centre nearby, a 59-story office building also partly occupied by the bank.
None of that stopped Zuckerman from starting the morning off yesterday with the declaration that "we have to save our financial system and what's happening to Citigroup is an example of that," adding that "we cannot allow a major institution like that to collapse."
Nor did it slow him down that night when he nominated Citigroup for saving after Brzezinski breezily announced that "the time has passed for bickering over who deserves government money and who doesn't," advocating instead that the feds "just get it out the door." Zuckerman chimed in: "That's exactly on point. Now just look at Citigroup!" Zuckerman went on to comment on Citigroup's $300 billion in toxic loans, implicitly supporting the government's guarantee of them.
The Daily News editorial yesterday declared that the Bush administration "is yesterday's news," with "the crucial exception of having to prevent major banking houses like Citigroup from collapsing."
On the other side of the ledger, Zuckerman has taken to publicly blasting Hank Paulson, declaring yesterday that he has "zero credibility as Treasury secretary." Zuckerman is known to be furious over Paulson's refusal to bail out Lehman Brothers, who is Boston Properties tenth largest tenant. (Boston's filings with the Securities and Exchange Commission list tenants by square feet rather than rental revenue, and Lehman's Manhattan leases with the Zuckerman company would undoubtedly have ranked it higher on the list if revenue were the standard.)
Research assistance: Patrick Anderson