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Hakeem Olajuwon a real estate rocket man

Former Houston basketball star has made a fortune buying high, selling even higher

Published: Wednesday, December 6, 2006 at 3:00 a.m.
Last Modified: Tuesday, December 5, 2006 at 9:00 p.m.

HOUSTON - A former player for the Houston Rockets is becoming as celebrated in the city's real estate circles as he was on the basketball court.

Hakeem Olajuwon, the soft-spoken Nigerian émigré who led his team to two NBA championships, also has done extremely well flipping real estate in his adopted hometown. Following an unorthodox yet disciplined strategy, he has managed to make as much in real estate in the past 10 years as he did in his 17 seasons playing professional basketball.

"He buys high and sells higher," said David Cook, executive vice president with the commercial real estate firm Cushman & Wakefield, who has represented Olajuwon in several transactions.

Many of the former NBA All-Star's real estate plays caused market watchers in Houston to shake their heads because they felt he overpaid.

"He buys expensive user land that is already fully developed," said Marvy Finger, president of the Finger Cos., which specializes in developing multifamily properties in Houston and other cities.

Such land is usually excruciatingly slow to appreciate and even at risk of depreciation. But Olajuwon, 43, has managed to at least double and even quadruple his money, reselling often within a year or two of purchase, according to brokers and lawyers involved in the deals. Judging from changes in county appraisal listings, profits from his 25 total transactions have easily exceeded $100 million.

"His timing has been amazing," said Ed Wulfe, president of Wulfe & Co., a Houston retail broker and developer.

The properties Olajuwon buys are often ripe for further development, like parcels near Houston's new light rail line, in the Texas Medical Center and close to the city's baseball stadium, Minute Maid Park. He has also bought and sold centrally situated, or inner loop, properties near major intersections and highway exits. And in November he bought a prime 41-acre tract near the Johnson Space Center .

Olajuwon, who retired in 2002, divides his time between homes in Houston and Amman, Jordan. A Muslim, he has been spending more time in Jordan recently to learn Arabic, the language of the Koran. He already speaks English and Yoruba, a West African language. Reached in Jordan, Olajuwon said he used his imagination when looking at a property. "I try to see its potential, what it could be used for," he said, adding that he studies satellite views of Houston to help him identify good investments.

His advisers said he studied maps and continually sought additional information about nearby building valuations, planned public improvements and traffic patterns.

It has not hurt his fortunes that the real estate market in Houston has been on an upward trend in recent years.

"Houston real estate has continued to be strong across the board - apartment, retail and office," Wulfe said. "We added 75,000 jobs this year, so we're not feeling the pinch like other places."

Regardless, Olajuwon's friends said it was no accident that he had been so successful. He was well known for his intelligence and diligence as a basketball player. He won a gold medal with the United States at the 1996 Olympics and is the top shot blocker in league history.

Though real estate speculation is inherently risky, Olajuwon said he was more comfortable buying land than stocks: "I like real estate because, you know, it's real."

"He's an astute and opportunistic buyer who seems to be keenly aware of opportunities," said W. Michael Hassler, first vice president at the commercial real estate company CB Richard Ellis, whose clients have sold property to Olajuwon. "He buys whole or half -blocks and out parcels," which are valuable "doughnut hole" properties surrounded by land owned by someone else.

Another way Olajuwon minimizes risk is with cash-only transactions.

It's against Islamic law to charge or pay interest, so he never seeks outside financing.

Olajuwon said he now wants to move to the "next level" and try his hand at developing properties. He is a fan of architecture and design, particularly Islamic geometric styles, classic Palladian structures and the modernist work of architect Richard Meier.

Olajuwon has already transformed a historic bank building in downtown Houston into a mosque.

This story appeared in print on page 5

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