Real Estate: The Achievement Addict

Last Dec. 31 a boyish-looking real estate developer in Phoenix. Ariz., solemnly wrote down his 1961 New Year's resolution: to make his company a $100 million enterprise within the next five years. Even in Phoenix, whose postwar building boom has been among the nation's liveliest, the resolution was somewhat audacious. But such audacity has made David Murdock, at 38, the biggest builder in Arizona.

Though he has been at it for less than a decade, Murdock has already pieced together real estate holdings worth more than $26 million. In the past two years he has reshaped the Phoenix skyline by throwing up three major office buildings, including the town's tallest—the porcelain blue 20-story Guaranty Bank Building. Now, bent on expanding beyond Arizona, he plans to invest $20 million in baby skyscrapers in Southern California, last week broke ground for a $3,000,000 bank building in Roswell, N. Mex. "Fast as Phoenix is growing," says Murdock, "I can build office buildings faster than the town can absorb them."

Befriending the Bank. The son of a traveling salesman, Missouri-born David Murdock quit school in the tenth grade to go to work, was paying his own way even before that. Says he: "I can remember mowing lawns when I was so small I couldn't get both hands up to the lawn-mower handle." After a World War II stint in the Air Force, he drifted into Phoenix with a young wife, a trailer, and a $12,000 stake he had earned running a short-order restaurant in Detroit.

Plunging into partnership with a small-time Phoenix housing contractor, Murdock quickly lost most of his savings when his partner skipped town. Though he knew nothing about either building or real estate. Murdock was determined to pay off the money the partnership had borrowed at Arizona's Valley National Bank, finished the houses by working on them himself. So impressed was Valley National that it backed him on more houses, and in 1952 helped him move into commercial building. Two years later, at 31, he was worth a million, chiefly in land parcels north of downtown Phoenix that were soon to zoom in value.

The Zeckendorf Formula. From the start, Murdock consciously modeled his business and tax techniques on those of Manhattan's high-flying William Zeckendorf (who has had less success with them lately than Murdock). Invariably retain ing ownership of the structures he built. Murdock took advantage of the 1954 change in the Internal Revenue Code permitting accelerated depreciation on buildings. He multiplied his holdings by borrowing against the income from leases and the capital appreciation of the property. Hardly had construction begun on the $6,500,000 Guaranty Bank Building in 1959 when Murdock smelled the possibility of a new killing in the old downtown section of Phoenix, where values had been falling. Buying up most of a block, he spent $5,500,000 on two more office buildings, is now tunneling a $1,750,000 underground garage for 500 cars.