The 30-Minute Interview: Michael Stern
Mr. Stern, 34, is the managing partner of the JDS Development Group, which specializes in multifamily homes and retail space in the New York area and in South Florida. The company’s projects include Walker Tower in Chelsea and Steinway Hall, both of which it is developing with the Property Markets Group.
Interview conducted and condensed by
Q. How is business?
A. Business is extremely good right now. The market’s stronger than we’ve seen it in a long time coming out of the recession.
Q. Is your focus more on condominiums than rentals these days?
A. We historically have done more condos than rentals. Lately we have a couple of specific projects that are very large rentals, but we’ve always had a mix of both. I’d say it’s around 60-40 condos versus rentals.
Q. How many projects are you working on?
A. Between New York and Florida we have roughly 18 projects in various stages of planning or development.
Q. Mostly in New York.
A. Yes. We’re working on four projects in South Florida.
Q. Florida was where you started out in real estate.
A. I built a few hundred units in South Florida in the early 2000s, and I left that market completely. The market kind of disappeared and has made a roaring comeback recently. The oversupply from a few years ago has all been absorbed and it’s again a supply-constrained market driven by foreign money, predominantly South American. So we’re back for roughly the last 18 months or so.
Q. Do you still have a home in Florida?
A. I have a home in Bal Harbour Village. I also split my time between Long Island and the city.
Q. Let’s talk about some of your New York projects, starting with Walker Tower in Chelsea.
A. Walker Tower is almost complete — we’re doing final-punch-list items and removing scaffolding. We expect to be predominantly done with the apartments by the end of September and with the amenities later this year. We only have a handful of units left. We originally started with 55, but we had a number of combinations — the trend is toward larger apartments — and we’re down to 47.
Q. What kinds of prices have you been getting?
A. The pricing, on average, is above $3,500 a foot — almost $4,000 a foot.
Q. What’s the status of the Steinway Hall development, where a condo and hotel are planned?
A. We just closed on the Steinway building on 57th Street. We had owned the adjacent lot for about two years and we’re really excited about the assemblage that we put together there. We are just beginning our design process for that building; we have not yet selected an architect.
Steinway Hall is a beautiful landmark and we’re incredibly respectful of that and we’re going to design a building that complements the landmark — very reminiscent of the skyscrapers built in the ’20s and ’30s.
Q. Tell me about your plans for the property you just bought on First Avenue, between 35th and 36th Streets.
A. We closed on that property in February. There we’re going to build two towers — one tower is 40 stories, the other tower is about 49 stories — and that’ll be roughly 800 apartments, very, very high-end rental.
We just broke ground within the last few weeks, and we expect to be out of the ground and vertical in the first quarter of next year.
The facade of the building is very articulated and very ornamental and it’s going to raise the bar for what a rental building is. It’ll have an indoor and outdoor pool, a bowling alley, a boxing ring, a gym — and almost 30,000 feet of indoor amenity space. In addition, we’ll have a privately owned public park on the site that we’re designing in conjunction with City Planning.
Q. Your partner in that project is the Baupost Group hedge fund, right?
A. We have investors, and I can’t comment specifically.
Q. How was it dealing with Sheldon Solow, the reclusive billionaire who sold you the property?
A. I’m the only guy who’s ever successfully bought property from him, but I didn’t deal with him that much. I dealt with his handlers.
His reputation is that he’s difficult, but I found him to be a pleasure to deal with. I didn’t have any issue putting this deal together.
Q. What else do you have going on?
A. We actually just completed a few buildings out in the boroughs. We just finished two rental buildings in Brooklyn — one in Park Slope and one in Williamsburg — that are almost fully leased up. The one in Park Slope was 51 units, and the one in Williamsburg is 46. We’re going to come to market with the Brooklyn buildings soon.
Q. You don’t hold onto your buildings for long, do you?
A. We’re not long-term holders. We tend to build rental buildings and then sell them. We’re looking for returns that are roughly two times multiple of the capital that we invest and the only way to achieve those returns is to sell.
Q. Anything else in the pipeline?
A. We’re constantly looking. We have some land holdings in Brooklyn — in Brooklyn Heights, Park Slope/Gowanus — that we’re going to be looking to develop over time. We have a couple million feet on the West Side that we’re going to look to develop over the next five years or so. It could be a mix of uses — retail, condominium, probably not rentals.
Q. What do you do for fun?
A. I work.
Original Article: Click Here
Print: Click Here