The real estate recovery has been good to him, but Douglas Durst is not especially happy about the financial landscape that emerged from the rubble of the early 1990s.

The 53-year-old scion of one of New York's most prominent real estate families-who is moving ahead with one of the city's biggest construction projects in a decade with a $340 million financing package led by Bank of New York-jokes that the main change in his relationships with bankers is that there are "a lot fewer" of them to have dealings with.

Several big players have merged, and others, including Citicorp, got burned on bad loans in the early 1990s and have taken themselves out of the market for new commercial construction. "As far as the New York City banks, that leaves Chase and Bank of New York," Mr. Durst said.

Mr. Durst groused that the stolid commercial bankers he once dealt with have been displaced by a new breed of financiers. The newcomers are willing to take on all kinds of real estate deals, from short-term building loans to interim financing and longer-term mortgages, but they make Mr. Durst nervous.

"There are now a tremendous amount of options for financing developers," he acknowledged, but that is "not a positive."

"When money is so available, bad projects are done. It creates this yo- yo effect. We go from way too much supply to way too little."

As president of Durst Organization, a firm started by his grandfather in 1915, Mr. Durst has a strong sense of history and obligation-to the legacy he inherited and continues to build, and to New York. This need to uphold tradition has an enormous effect on the way Mr. Durst deals with financiers.

"We've always maintained a personal relationship with our bank," Mr. Durst said. "Originally, it was Chemical. When we finished 655 Third Ave. (an office tower just east of Grand Central Station on 42d Street) in 1958, they were our lender on the next seven buildings that we built. From 1958 to 1968, we had the same banker all the time."

But by 1981, when the Dursts were building 1155 Sixth Ave., a 610,000 square-foot office building between 44th and 45th streets, the banks had changed their approach to commercial real estate. "We no longer dealt with one individual at Chemical. We had a different account officer every time. The people we were talking to didn't know the family," Mr. Durst said sadly.

This must have come as a surprise, because by the early 1980s Durst Organization had built a series of office towers on Third Avenue in the Grand Central Station area and had followed that with some of the largest commercial buildings on Sixth Avenue in the 40s.

Mr. Durst's father, Seymour, who died in 1995 and led much of this building, was a well-known and outspoken New York developer, responsible for erecting a huge electronic billboard atop a Durst building at Sixth Avenue and 43d Street which tracks the second-by-second mounting of the national debt.

But in cyclical downturns, the Dursts (the company now employs two of Douglas' cousins) have been able to raise their own equity to finance construction. Unlike many other developers that went bankrupt or lost buildings as the 1980s boom went bust, Durst Organization has managed to keep its reputation and all its properties-nine commercial skyscrapers in the midtown area, totaling 6.5 million square feet of class A office space, all 98% leased-intact.

"These guys have never defaulted," said Mark Edelstein, the partner in charge of real estate at Milbank, Tweed, Hadley & McCloy. "Durst is and was on the A list of every bank in the city."

But that stellar reputation did not help much in the early 1990s, when the market tanked. "That was at the bottom," Mr. Durst recalled. "I would call banks and if I didn't get hung up on, I was lucky."

In the meantime, the account manager from Chemical who knew the family had moved on to Bank of New York. The relationship-oriented Mr. Durst had kept in touch with him, and in 1993 that friendship yielded a $50 million loan to cover half the renovation of 1133 Sixth Ave., after the Internal Revenue Service agreed to lease one-third of the building.

To get the rest of the money, the Dursts worked with a pension fund at J.P. Morgan Investment Management Inc., which eventually came through with a $100 million permanent loan, allowing them to pay back Bank of New York.

But dealing with a pension fund is not quite like working with a commercial banker, Mr. Durst said. "Commercial banks are more involved in day-to-day management of the property. The pension funds are more interested in the long-term issues," like terms and yield.

J.P. Morgan did not, for example, accept the building at 1133 Sixth Ave. as collateral for an initial $45 million loan but secured that deal against three other fully leased Durst properties, at 655, 675, and 205 E. 42d St.

In the end, Chemical-now Chase Manhattan Corp.-did express regret about losing its relationship with the company to Bank of New York, Mr. Durst said. And that translated into a $6 million, three-year loan to finance the purchase of excess site acquisition tax credits in 1997.

He said Bank of New York was also irked when the Dursts went to J.P. Morgan. But "commercial banks are not typically long-term lenders," Mr. Durst said. "We prefer to make long-term loans with heavy amortization. Commercial banks don't like heavy amortization."

This has encouraged Durst Organization to partner with insurance companies and to consider some securitized deals. But these sorts of financings have drawbacks.

Insurance companies can differentiate themselves from the securitizers by offering more flexibility on terms, Mr. Durst said. However, the insurers seem "to have a hard time competing on rates," he said. "They talk about it a lot, but they don't often make good on it."

In a securitized deal, "everything must fit into a package, and all the terms of the loans have to match." That makes it hard for the conduits to negotiate, Mr. Durst said.

But the myriad flavors of possible financing arrangements is not what preoccupies Mr. Durst these days. He is more excited about the dramatic changes he has envisioned for the New York landscape.

The company is building a 48-story office tower on the east side of Times Square, which will open in 1999 and house the publishing giant Conde Nast and the top-tier law firm Skadden Arps Meagher & Flom.

Durst Organization bought a leasehold for the land under 4 Times Square from Prudential Insurance Company of America, which also owns two nearby sites that Mr. Durst covets.Though a traditionalist at heart-his favorite sport is riding and jumping horses-Mr. Durst is bucking the common wisdom: He is convinced that the demand for midtown office space is again on the rise.

"We have seen the pendulum swing from the 1980s, when bankers would make loans that made no sense whatsoever. Now it seems to be swinging back to making loans that are extremely aggressive. Overly aggressive."

"That's good for long-term players, like us, who can get financing at something of a discount," he said. "But it's also good for short-term borrowers, who take the money and run."

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