Michael Stern is one of the boldest luxury developers in the United States. Projects under his JDS Development Group include the skinny supertall at 111 West 57th Street and Walker Tower at 212 West 18th Street in New York City, and Monad Terrace and Echo Brickell in Miami. A new in-depth profile of Stern in the Financial Times reveals some great details about the developer and his approach to the business. Here are the highlights.
He really, really wanted you to love Ralph Walker
The original architect of the Verizon building on West 18th Street was Ralph Walker, a prolific designer who died in 1973. When Stern and his partners bought the building from Verizon for $25 million, they redeveloped it as luxury condos and rechristened it “Walker Tower.” To hype the building’s pedigree, Stern commissioned a historian to write a fawning book about the architect.
The book was titled: “Ralph Walker: Architect of the Century.” The developers also created a Ralph Walker exhibit in the lobby of the building. Walker Tower went on to become one of the big success stories of the luxury condo market, and set a new record for Downtown when a penthouse there closed for $50.9 million in 2014.
His behind-the-scenes partner is an Aussie ex-trader
Stern was just 27 when he met David Juracich, an Australian derivatives trader who had been looking to get out of finance. “Wavey Dave,” as he was known, went in on a condo project with Stern in Gowanus, at 202 Eighth Street. Stern persuaded Juracich to put up $2.6 million to get the project going.
The project stalled during the Great Recession, and the partners restarted construction in 2011, this time developing the site as a rental building. They sold the property to Werber Management in 2013 for $37.8 million.
He landed Barry Sternlicht as a key investor in Walker Tower
Coming out of the crisis, private equity was desperate to put big money to work, and Barry Sternlicht, the founder of Starwood Capital, was no exception. Sternlicht visited Walker Tower and once he went up to the roof and took in the sweeping views, it didn’t take much to convince him.
He “walked around for 15 minutes, then said to his guy, ‘Get this done!’” Juracich recalled to the FT.
111 West 57th construction was a “war”
The skinny supertall at 111 West 57th Street was one of the most complex construction projects in New York condo history. Stern and his fellow developers had to leave the landmarked Steinway Building in pristine condition and ensure its tenants were not disturbed by the formidable business of putting up a supertall. So instead of using heavy demolition equipment, the developers had to bore 70 feet into the rock below – with hand drills.
“They [Steinway] were selling and tuning pianos while we were working underneath them,” Stern told the FT. “It’s hard enough to build that in the desert with nothing around you — but to build that in the urban context, through a landmark, without disturbing existing occupants, this was a war.”
He’s a “no guts, no glory” type
Audacity is generally a prerequisite to be a condo developer in New York. Timing is everything, buyers are fickle, and even a few months of delays could mean millions of dollars of losses. The ones who put themselves on the line over and over, such as Gary Barnett and Harry Macklowe, are also the ones who’ve built the most-talked about buildings. Stern certainly belongs in that club.
“He wants to be great,” someone who has worked with Stern told the FT. “He wants to be Harry Macklowe, and he’s willing to go bankrupt a few times along the way.”