Billionaire shows how small buildings in New York can mean big money
US property tycoon Axel Stawski builds a fortune through his attention to detail and emphasis on boutique buildings
Axel Stawski is not the kind of real estate mogul who boasts about the size of his towers.
The developer owns six Manhattan office buildings, one of the largest being 565 Fifth Avenue, a 380,000-square-foot property completed in 1993 on the corner of 46th Street. At 30 stories, it’s not one of New York’s tallest skyscrapers. Yet what it lacks in size it makes up for in style, with abundant natural light, crafted patterned wood fixtures and 7-meter lobby walls made out of Italian marble.
“It’s not overwhelming, it’s not overbearing,” Stephen Sunderland, senior managing director of New York real estate brokerage Optimal Spaces, said of a typical Stawski property. “But you think, whoa, someone really thought this out.”
Attention to detail – and a focus on boutique buildings catering to a smaller number of tenants – has helped bring Stawski, the 65-year-old founder and president of closely held Stawski Partners, a net worth of US$2.4 billion, according to the Bloomberg Billionaires Index. That puts him near the ranks of Donald Trump, the New York developer turned presidential candidate who has a US$2.9 billion fortune, according to the index.
Stawski declined to comment to an e-mail sent on June 24.
Stawski’s Manhattan office properties average a relatively small 316,000 square feet – less than one-eighth the size of the Empire State Building. In comparison, Sheldon Solow – the city’s joint fourth-richest real estate developer, according to the index – has about half of his US$3.7 billion net worth tied to the 1.4 million square-foot building at 9 West 57th Street.
Stawski prefers smaller properties on corner lots, and has rebuilt two of his three Fifth Avenue office towers from the ground up. A focus on design makes buildings quicker to lease and helps to attract and keep desirable tenants longer, said Michael Cohen, president of the tri-state region at real estate services firm Colliers International Group.
“He has very good aesthetic taste, and that matters in this town,” Cohen said.
Stawski has emerged as a “dynastic developer” because he builds properties and holds on to them, benefiting from long-term appreciation of New York real estate that other builders may miss out on by choosing to sell and use money elsewhere, Cohen said. The billionaire also has benefited from being choosy about his projects.
“Axel’s track record is the opposite of prolific,” Cohen said. “There are some people that when they perceive the time is right, they buy and develop property like mushrooms, but Axel seems to be selective.”
Stawski’s tenants include Fitch Group, which has one of its two international headquarters at the billionaire’s Broad Financial Center at 33 Whitehall Street, and the central bank of Norway, at 505 Fifth Avenue.
“They’re very hands on – in a positive way,“ Sunderland said of Stawski and his team. “I’ve done this for 30 years and I’ve never heard anything bad said about him. That’s phenomenal in New York.”
Stawski also co-developed three residential buildings in Manhattan’s Soho and West Village neighbourhoods. At the newly constructed 27 Wooster Street, a US$28.5 million penthouse went under contract after just six days on the market in December 2014, according to listings website StreetEasy. The billionaire stuck to his boutique approach on the eight-unit building as well, such as through requesting that every window open inward so they’d be easier to clean.
“This was rather special from my point of view,” Douglas Hocking, an architect with Kohn Pedersen Fox Associates, the building’s lead designer, is quoted saying in marketing material published on the development’s website. “I have never seen a building where every single piece of glass was actually a window that you could open.”
Stawski was born in Frankfurt in November 1950 to Moniek and Sara Stawski, both Jews who survived the Nazi regime. His father – who spent more than two years at a Polish slave labour camp and weighed 36 kilograms (79 pounds) at the war’s end – began building apartments in Frankfurt in 1960 after running a small business selling chocolate, coffee and alcoholic drinks following the war, according to his autobiography, “My Life.”
Axel Stawski, the second of five children, studied in the UK as an undergraduate at University of Birmingham and later attended New York University where he obtained a master’s degree in law and an international law doctorate, according to the school’s website.
He had moved to the US by 1971 and received general power of attorney from his father two years later at age 22, which gave him enlarged responsibilities for real estate transactions, according to a September 11, 1984 filing with New York City Department of Finance. Axel became directly involved in real estate in the late 1970s, when a Long Island shopping centre in which his father had invested came across financial trouble, according to a 1991 story in The New York Times.
Around that time, the family bought 950 Third Avenue, a 32-storey office tower in midtown Manhattan, with German billionaire Karl-Heinz Kipp. The 343,000-square-foot building is owned today by Naomi Altholz, the youngest Stawski sibling, and her husband, Andre, according to a September 22, 2010 report from Real Estate Weekly.
Axel Stawski’s latest plans are for a 66-storey, 855,000-square-foot tower in Long Island City, Queens. It’s planned to have 921 apartments, a gym with a locker room, an indoor pool and a library, according to a May 13, 2016 filing with the New York City Department of Buildings.
Long Island City, with a skyline already dotted with glossy new rental towers, is seeing soaring apartment demand as a cheaper alternative to Manhattan. The median monthly rent in northwest Queens – which also encompasses the areas of Astoria, Sunnyside and Woodside – jumped 10 per cent in June to US$2,787, according to Douglas Elliman and Miller Samuel.
The tower will be Stawski’s largest since 505 Fifth Avenue, a 28-storey office and retail property that was completed a decade ago.
“I sometimes think that the axiom ‘location, location, location’ should be replaced with ‘timing, timing, timing,’ said Cohen of Colliers. “His timing has been excellent.”