For the typical citizen of the world spending one hundred times less than 1% of your net worth means buying a twenty-five cent sour key from the corner store, or dropping a dime down a drain. For Amancio Ortega spending one hundred times less than 1% of his net worth means purchasing a hot-piece of Manhattan real-estate. Ortega recently purchased the Hotel in June of 2016. The hotel is named Murray Hill and is located on the elite street of Park Avenue in Manhattan, located 5 blocks away from the Empire State Building and 3 blocks away from the Chrysler Building in the other direction.
Amancio Ortega is the richest man in Europe and the wealthiest retailer in the world. Originally from Spain he started manufacturing textiles through a small family-owned company. In 1975 he founded Zara, with his ex-wife (d. 2013) (Forbes Profile, 2015). By the mid-1980’s Ortega had expanded his business and brand throughout his native country and by 1989 he opened his first Zara in the United States. As his empire expanded, which today includes Zara, Massimo Dutti and Pull & Bear, he caught the retail establishment by surprise, limiting advertising, expanding aggressively, and controlling much of his own supply chain. His umbrella company is called Inditex. Through 2009-2014 when Spain was going through a devastating financial crisis from which they have not even remotely begun to recover from, Ortega personally gained $45 billion. Shares of Inditex were rising as the rest of the nation’s stock market plunged. In 2011, Ortega stepped down but remains the benefactor of approximately $400 million annually from dividends. Since his “retirement”, Ortega has pursued real-estate in Madrid, Chicago, Miami and New York City (Forbes Profile, 2015).
According to the Financial Post, Ortega has quietly built a real-estate empire worth $10 billion, much of this fortune coming from the United States alone. The most impressive aspect being it is “all-cash”. In 2014 from January – April alone, Ortega spent one billion dollars on Manhattan real-estate in the Meat Packing District. Ortega relies on all cash offers to outbid some of the world’s most profitable financial institutions. Ortega’s personal real estate portfolio may be closing the gap with Donald Bren, chairman of Irvine Co. of southern California, often cited as the world’s wealthiest real estate investor. Bren’s properties are worth US $14.4 billion (Financial Post, 2014). Mr. Ortega rents some of his properties to his Zara stores. By effectively becoming his own landlord, he benefits in two ways. He gains a tenant who is unlikely to leave or make ridiculously unmanageable demands, while Inditex enjoys a friendly owner unlikely to impose big rent increases.
The Murray Hill Hotel, Ortega’s most recent acquisition, was built in 1895 in the Murray Isle district of the St. Lawrence River. It was constructed for $100 000 and rates at the hotel were $3-$4 per night. Park Avenue had not even been thought of yet; its value unknown for decades. It was originally a seasonal hotel and stayed opened for 20 years until it was demolished in 1915. It was rebuilt in 1928 and operated by a Spanish hotel company. It measures 83 000 square feet and in 2006 the building was bought for $88 million (Parker, 2016). The building’s value has dropped considerably though Ortega is sure to turn that around. The building is 205-key hotel located in the heart of Manhattan, a safe-neighbourhood, from which you can enjoy the views of the East River and Long Island City. Ortega acquired the property from KHP Capital Partners.