“They all laughed at Rockefeller Center, now they’re fighting to get in / They all laughed at Whitney and his cotton gin”

(Frank Sinatra — “They All Laughed,” lyrics, George Gershwin and Ira Gershwin)

When Harry Macklowe, the scion of one of New York’s most prominent real estate families, paid $1.4 billion in September 2003 for the General Motors Building on Fifth Avenue between 58th and 59th streets, people laughed at what seemed like an outrageous price.

While just three years ago the idea that a New York City office building could be worth more than $1 billion seemed preposterous, today real estate experts say the very same building could be worth more than $3 billion.

So began a dispatch by our David Lombino on December 11, 2006 that ran on our front page under the headline, “A Booming Real Estate Market Gives Harry Macklowe the last laugh.” Today, just a year and a quarter later, news that bids for the GM Building topped $3 billion makes our article look prescient. And they underscore the remarkable boom that New York has undergone in the past few years. Setting aside the devaluing of the dollar against gold, the appreciation of an asset in dollars from $1.4 billion to $3 billion over a little more than four years is a remarkable gain, a more than 214% cumulative return. For all the talk about the softness of the real estate market and the dearth of credit, stresses that forced the Macklowe family to a sale, if this deal goes ahead, it would be, the Wall Street Journal reports, “the most expensive price ever paid for a single building in U.S. history.”

The GM Building opened in 1968. When it was built, the company whose name it bears was one of the greatest in the world. Yet by the 1980s, GM optioned the building to raise $500 million in cash and finally sold it in 1991. It ultimately found its way into the hands of an insurance company, Conseco, and Donald Trump. The site has always been a microcosm of the economy and shows how important New York remains to the national, and global, economy. The space that once housed an automobile showroom now is home to a national television studio. Hedge funds and law firms now occupy the office space, and an Apple store and its landmark cube sit in the plaza on Fifth Avenue.

There is no shortage of gloomy indicators. The Wall Street Journal reminds us that New York “recently finished 50th in Chief Executive magazine’s survey of the best states to do business” and is 48th among the states in overall business tax climate. It also reported on a United Van Lines study that showed residents fleeing New York. It may be that those offering $3 billion for the GM Building are overpaying. Mr. Macklowe did, it appears, overpay in February 2007 when he spent $7.1 billion to buy seven buildings from the Blackstone Group. But they all laughed at Macklowe back in 2003, too. And the willingness of investors to risk private capital on commercial real estate in the heart of Manhattan is a welcome vote of confidence in our city and its future.