“You’re too late,” the broker told Lara. “A developer named Steve Murchison was here this morning, and he made me an offer. He’s going to buy it.”
“How much did he offer?”
“Three million.”
“I’ll give you four. Draw up the papers.”
The broker blinked only once. “Right.”
Lara received a telephone call the following afternoon.
“Lara Cameron?”
“Yes.”
“This is Steve Murchison. I’m going to let it go this time, bitch, because I don’t think you know what the hell you’re doing. But in the future stay out of my way—you could get hurt.”
And the line went dead.
It was 1974, and momentous events were occurring around the world. President Nixon resigned to avoid impeachment, and Gerald Ford stepped into the White House. OPEC ended its oil embargo, and Isabel Perón became the president of Argentina. And in Chicago Lara started construction on her second hotel, the Chicago Cameron Plaza. It was completed eighteen months later, and it was an even bigger success than the Cameron Palace. There was no stopping Lara after that. As Forbes magazine was to write later, “Lara Cameron is a phenomenon. Her innovations are changing the concept of hotels. Miss Cameron has invaded the traditionally male turf of real estate developers and has proved that a woman can outshine them all.”
Lara received a telephone call from Charles Cohn.
“Congratulations,” he said. “I’m proud of you. I’ve never had a protégée before.”
“I’ve never had a mentor before. Without you, none of this would have happened.”
“You would have found a way,” Cohn said.
In 1975 the movie Jaws swept the country, and people stopped going into the ocean. The world population passed four billion, reduced by one when Teamster President James Hoffa disappeared. When Lara heard the four billion population figure, she said to Keller, “Do you have any idea how much housing that would require?”
He was not sure whether she was joking.
Over the next three years, two apartment buildings and a condominium were completed. “I want to put up an office building next,” Lara told Keller, “right in the heart of the Loop.”
“There’s an interesting piece of property coming on the market,” Keller told her. “If you like it, we’ll finance you.”
That afternoon they went to look at it. It was on the waterfront, in a choice location.
“What’s it going to cost?” Lara asked.
“I’ve done the numbers. It will come to a hundred and twenty million dollars.”
Lara swallowed. “That scares me.”
“Lara, in real estate the name of the game is to borrow.”
Other people’s money, Lara thought. That’s what Bill Rogers had told her at the boardinghouse. All that seemed so long ago, and so much had happened since then. And it’s only the beginning, Lara thought. It’s only the beginning.
“Some developers put up buildings with almost no cash of their own.”
“I’m listening.”
“The idea is to rent or resell the building for enough money to pay off the debt on it, and still have money left over to buy some more property with that cash, and borrow more money for another property. It’s an inverted pyramid—a real estate pyramid—that you can build on a very small initial cash investment.”
“I understand,” Lara said.
“Of course, you have to be careful. The pyramid is built on paper—the mortgages. If anything goes wrong, if the profit from one investment fails to cover the debt on the next one, the pyramid can topple and bury you.”
“Right. How can I acquire the waterfront property?”
“We’ll set up a joint venture for you. I’ll talk to Vance about it. If it’s too big for our bank to handle, we’ll go to an insurance company or a savings and loan. You’ll take out a fifty-million-dollar mortgage loan. You’ll get their mortgage coupon rate—that would be five million and a ten percent rate, plus amortization on the mortgage—and they’ll be your partners. They’ll take the first ten percent of the earnings, but you’ll get your property, fully financed. You can get your cash repaid and keep one hundred percent of the depreciation, because financial institutions have no use for losses.”
Lara was listening, absorbing every word.
“Are you with me so far?”