WSJ: New Era for Skyscrapers, High Rise Condos
In NYC and elsewhere, high-end and high-rent high-rise condos are without question an emerging trend. My market specifically is abuzz with old class-c buildings being converted into expensive destinations for both young professionals who want the vibrancy of downtown and the newly retired who have money to burn and don't want to kill themselves mowing the lawn.
This particular tower is going to be both incredibly tall and incredibly skinny. Taller than the Empire State Building, it would alter the famous building scape of New York City.
On top of that, the developer is 34 years old. Yes you read that right. 34. I may have just found someone new to add to the "hero" list.
Developer Michael Stern wants to build a stairway to heaven in Midtown Manhattan.The managing partner of JDS Development Group and his partners at Property Markets Group are planning a skinny, ultra-luxury condo tower on West 57th Street, which will be about 100 feet taller than the Empire State Building. The venture's plans for the tower submitted last month to the city's Landmarks Preservation Commission call for an approximately 1,350-foot skyscraper that sets back from the street numerous times as it reaches higher—resembling tall, thin steps.
"It's really going to enhance the skyline," says Vishaan Chakrabarti, a partner at SHoP Architects, which designed the tower. He says the planned tower would be clad with bronze-and-white terra-cotta stripes, so the building "sparkles during the day and has a soft glow at night."
It remains unclear whether the venture has obtained financing, a crucial element for any development, especially at a time that many banks are still reluctant to make loans for condo projects. A spokesman for JDS declined to comment on the financing, but said the developer hopes to break ground early next year.
Should it be built, the tower would be the latest entrant in the luxury condo-fueled skyscraper race that is reshaping the Midtown vista and ushering in a new era for skyscrapers in the city. Up until now, the city's skyline has been dominated by office towers that house thousands of workers. But lately many of the new towers rising, particularly around Central Park, have been skinny apartment towers.
On 57th Street alone, two condo towers taller than 1,000 feet—Extell Development Co.'s green glass One57 and Harry Macklowe and CIM Group's 1,396-foot 432 Park Avenue—are under construction. Extell also is planning another tower on the street.
Developers are responding to soaring prices for high-end condos, in part from international buyers who view the apartments as stable investments. Extell has said it has reached deals to sell two penthouses for more than $90 million at One57, while the builders of 432 Park have said they have signed a contract for a $95 million penthouse.
Mr. Stern has been planning a building on his 57th Street site since it was purchased in 2012, although initial schemes called for a building of less than 700 feet.
Earlier this year, Mr. Stern's group increased the size of the project by cutting a deal for additional development rights from a nearby property owner and by buying a neighboring building—the 1925-built home of piano maker Steinway Musical Instruments Inc.'s flagship store—and its air rights. In all, the venture has spent more than $250 million on acquisitions, according to property records.
In addition to its height, the building is notable for being so thin. Its lot is just 43-feet wide, according to city records, and many of the floors would be 4,000 to 5,000 square feet in size, Mr. Chakrabarti says.
The building is slated to include many full-floor apartments with views all around. "There will be moments in these apartments where you can see Midtown to the south and Central Park to the north," he says.
If built, the tower would be by far the most notable development by Mr. Stern, 34 years old, a relative newcomer to New York City real estate. He's best known for converting the Walker Tower in Chelsea to condos, along with Property Markets Group. Mr. Stern has since made multiple other acquisitions, and he's planning a pair of flashy apartment towers on Manhattan's East Side.
Mr. Stern and Property Markets Group are planning to convert the Steinway Building into an apartment building and transfer its development rights. The new tower must get approval from the city's Landmarks Preservation Commission because it's next door to the Steinway building site, which is a city landmark.
Last week, the landmarks committee of the neighborhood community board voted to give a nonbinding endorsement of the plan. The full community board is set to take up the issue this week.
In the RE market today I would be willing to bet they could finance the project on the basis of pre-sales alone.
very cool
When you said he was 34 and doing high-rise in NY and Miami, I immediately thought, ok another rich brat like Dan Miller or Alex Sapir. But maybe there's more to this guy ... if so, good for him: "Mr. Stern, of Long Island, started his career in real estate as a project manager for a developer in Miami after high school. He was hooked, he says, because it was a job that produced tangible results.
He moved back to New York in 2002, focusing mainly on low-rise buildings outside Manhattan. JDS stopped buying property during the economic downturn, but in 2009 "we started making moves," Mr. Stern says."
Awesome, I wonder how he first started.
Also given that the building is so skinny, it would actually be pretty scary living on the higher floors. I feel like this thing could snap in half at any moment.
Broad Street is putting a 25 unit condo building across the street from me. It used to be a school.... they hired the guy from Bravo's Million Dollar Listing, Fredrick Eklund to market it.
It's only supposed to be 7 stories though but still 65,000 sq ft. more luxury condos woohooo. That would be crazy to live in though, something that high would make me nervous at any floor.
I was wondering what they were going to build on Broad. Seems like that and the old JPM building are perpetually under some type of work lately.
One Chase Manhattan Plaza is actually up for sale
Here's a potential counterpoint to the enthusiasm behind this development: at some point the top of the market is going to stop being so frothy. http://online.wsj.com/article/SB100014241278873238646045790673936891376…
Yeah, that's exactly what New York needs: more super-expensive housing.
Thought the same thing but if people are willing to pay for it, why not?
Some would argue the opposite: http://www.nytimes.com/2013/08/30/opinion/gothams-towering-ambitions.ht…
Good piece, but it doesn't have to do with rent control. Opposition to projects like this is one of the reasons rents are so high.
@UFOinsider 'Broad Street' the development company is what I meant. Sorry I wasn't clear. Not surprising there is actual construction on broad street downtown though. Seems to be construction everywhere right now.
Looks like an attempt to one-up One57.
The skyscraper going up on Park Ave is already doing that.
Looks like we have a high rise hipster here
And how about 225 W 57th? Extell's topping itself
http://commercialobserver.com/2013/08/nordstrom-pays-102-5-m-for-midtow…
Panoramic views?! I'd take that over HBS or GS TMT
The city I work in (Denver) has a couple of newly constructed luxury high-rises that are, as far as I'm aware, completely hemorrhaging money. The co-developer of this one, (http://spiredenver.com/) The Spire, mentioned to me they're at less than 30% occupancy, which is pretty cringe-worthy given it's one of the top 5 tallest buildings in the city. The 4 Seasons had plans to be the tallest building in the city until the financial crisis hit, but I've heard they're planning on ramping up funding again for further "vertical" construction.
The demand for such buildings is absolutely there, but developers have to have a really good understanding of their market's fundamentals. In a city like Denver, there's not much reason to be spending $2mm+ on a condo downtown when ~10 miles outside of the city you can live on a country club with a huge yard for the same price. This clearly isn't the big case for places like NYC/Chi/Houston.
Always been fascinated by RE. Seems like its really picking up across the country. Trump's investment in the Old Post office in DC, recent interview with Rancic whos bullish on the market in Chicago. Ive heard a lot of major hotels are relocating HQ to DC - any idea why?
There's never going to be a shortage of Saudi Princes or Russian kleptocrats who want to be able to say they have a luxury apartment in NYC. More power to them. I'm focusing on an opening in the market and I think that modern efficiency apartments are an increasingly untapped market in NYC.
I'm not really going to argue the point further because 1) I've already hijacked the thread enough 2) the children here are obsessed with anything that associates them with sucking up to the wealthy and 3) hahaha I'd rather investigate this to make a buck instead of letting people rip my ideas off
@LIFinancier: not the issue. New York's building codes are so complicated and convoluted that these ultra-luxury buildings are the only worthwhile projects anymore. The "rent control" isn't helping either because it doesn't actually control rent.
Residential and Office real estate market in Houston is catching on fire. Not sure if any one here is from Houston or is familiar with whats going on down here....big towers are going up every where as credit eases up.
Houston is arguably the best market in the country right now. Take advantage of it while you can.
I think thats a stretch. Maybe for office. But still strong competition from Midtown South in Manhattan as well as San Fran.
Impressive this guy is pretty young. Sounds like he didn't go to college? I guess the time he spent gaining experience in lieu of being at university was well worth it.
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