Verizon tower land acquisition

Twenty-nine-year-old Michael Stern was riding the elevator in a Verizon-owned building at 212 West 18th Street when he found out that Lehman Brothers had filed for bankruptcy.

Stern’s company, JDS Development, wasn’t actively acquiring properties at the time, and he’d been dragged “kicking and screaming” by a broker to check out the prewar building, which Verizon was using as storage for copper wire. But once Stern saw the views from the upper floors of the Art Deco tower, he knew he wanted to turn it into residential condos.

Luckily for the up-and-coming developer, the Lehman Brothers collapse — and its subsequent devastation — discouraged others from bidding on the building, giving him the opportunity to buy it with partner Property Markets Group for just over $25 million.
Other industry pros thought he was crazy, he said. It was risky, especially in the midst of a financial crisis, and the commercially zoned building did not look ripe for residential conversion.

“A lot of people couldn’t understand how I’d make this building work as a residential building, ” Stern recalled, “but I knew the bones were great.”

Four years later, it looks like Stern made the right move. The conversion of what is now known as Walker Tower (after its architect, Ralph Walker) is complete, and it’s one of the only new development condos currently on the market. Stern, now 33, is working with residential brokerage Core to sell the building’s 50 units, some of which have already traded for up to , 400 per square foot, he said. Despite having just hit the market in June, the building is already more than 25 percent sold.

“That deal is a total grand slam, ” said Robert Knakal of Massey Knakal Realty Services, who has done deals with Stern but was not involved in the Walker Tower deal.

Walker Tower has, to some extent, propelled JDS into the spotlight, particularly in New York City, where Stern previously focused mostly on lower-profile, outer-borough projects. And Walker Tower isn’t the only project JDS is doing with PMG, the Manhattan-based real estate acquisition and development firm where Extell’s Gary Barnett cut his teeth. JDS and PMG now have plans to develop a 70-unit condo at 435 West 50th Street, another Verizon building and a 100, 000-square-foot retail and residential project at 105 West 57th Street.

John Cetra of architecture firm Cetra/Ruddy, which oversaw the conversion of Walker Tower, said Stern may be able to build on his current momentum.

If Stern “is able to keep that going, with the right properties, the right location, the right timing, ” Cetra said, “he could be a real player.”

On deck

JDS, working alongside PMG, is currently one of the city’s most active development firms, brokers said.

Last year, JDS and PMG paid just over $20 million for 101, 000 square feet of the West 50th Street Verizon building, including the penthouse, lobby and the 10th through 17th floors. The 70-unit condo, also designed by Cetra/Ruddy, is slated to hit the market in the spring of 2013.


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The quarterly cash flows from operating activities were negative primarily as a result of the need for working capital to cover large-scale development projects.

Q&A

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On average how much does verizon wireless pay a land owner per month for a tower being on their property

Verizon doesn't release this type of info to public, but some land owners claim they receive roughly $800 per month to have cell phone towers on their property.