Like Father, Like Son: Murray Hill Properties’ David Sturner
Billy Gray Oct. 1, 2013, 11:53 a.m.
David Sturner’s long tenure at Murray Hill Properties began in 1995, when the full services real estate company launched its asset and project management departments. But his roots at the firm go even deeper than that: Mr. Sturner’s father, Norman Sturner, is MHP’s president and chief executive. Since coming onboard, the younger Mr. Sturner, 46, has risen in the ranks. The onetime project management specialist now also oversees operations and asset management and two years ago was named chief operating officer. Mr. Sturner spoke to The Commercial Observer about the transformation of MHP, growing up in a real estate family and the quest for fortune over fame.
You’ve been at MHP since 1995. Where were you before then?
I went to school at Boston University and came out with a marketing degree, which in 1985 was basically worthless. I was able to earn $16,500 a year, and that made it impossible to live in Manhattan, which was my dream. I looked at my father [Norman Sturner], and he said, “What do you want to do?” I said I wanted to work with him. And he said, “No, you’re not. You have to bring something to the table. Go learn something I don’t know, and teach me about it.”
At this time, we were just taking on management. My father said we needed to learn construction. So he sent me to Structure Tone. I learned the business from the ground up there and over six-and-a-half years was a super, then a project manager, then an estimator. And Structure Tone had the best training program for a guy who knew nothing.
And in your almost 20 years at MHP, how has it grown?
At the time I joined, we had about 2-and-a-half to 3 million square feet and one broker, a guy named Stan Kleger. He started our brokerage department. When I got here, we were just changing our business—better buildings, certainly, bigger buildings and more capital requirements so there would be a real added-value aspect instead of just holding and changing the tenancy, but also where our money was coming from was changing. It was once based on limited partnerships: doctors and dentists giving $10,000 each into syndication. When the Tax Reform Act [of 1986] happened and they couldn’t pass on depreciation, all the benefits of owning real estate went out the window. We had to look at more investment-type partners.
What was it like growing up as a child of the industry? Did your father inundate you with it?
I’d say it was held at arm’s length, unless I had a specific interest. He was always more than happy to explain things. Although when I was young, this company was just being built. We’ve seen all sides. A lot of people say, “Oh, Murray Hill, the Sturners, that’s a lot of money.” Truth be told, my father started out as, I would say, blue-collar white-collar as you can get. We lived in a small ranch in Matawan. He was doing financial consulting, mostly as a CPA.
But he got lucky. Someone had a contract for a small building in Murray Hill. And he didn’t close. My father didn’t know anything about real estate, but it was cheap enough at the time. So he bought it, and, within a short amount of time, there was a great increase in value. This was in 1972, and I was about 12 or 13 years old when this shift happened. But we were always frugal. I grew up understanding the value of a dollar. He said something funny when I left for college. He gave me a Gold Card and said, “David, don’t take advantage of me. But this is one thing: Go have fun, because, when you get out of college, you’re going to work.” I said, “What about grades?” And he said, “Oh, yeah, that too. You’re not there for four years just to have fun.”
Do you deal with people who perceive you as being in your position thanks only to your dad?
Lucky sperm. Forgive my French.
So at times you’ve felt you really had to go an extra mile to prove your worth?
Of course. Not to the outsiders. Mostly to my dad’s partners. Neil Siderow and Michael Green were my uncles, basically. And they didn’t make it easy for me. I wasn’t necessarily concerned with the outsiders as much, meaning outside brokers, because I wasn’t executing deals as I am now. I was really focusing on project management, building the infrastructure, redoing lobbies and elevators. That was really my concentration.
And is base building still the primary focus? Your role has certainly expanded into operations and asset management, right?
Absolutely. I became the COO about two years ago, because I was instrumental in helping form the asset-management department. I brought on new hires over the last 20 years. I like to say that the three or four top people in the department were ones I recruited. And I’m proud to say that none of them have been here for fewer than 10 years. It’s a well-groomed machine that buys and sells buildings and adds values in between.
What are some recent firm highlights?
There’s 1250 Broadway, 509 Fifth Avenue, which we sold about eight months ago, and 530 Fifth Avenue, where we partnered up with Jamestown and Rockwood, as well as Crown.
How would you boil down your role in transactions like those?
This is what I really bring to the table: I’m able to take all the information in all the departments and funnel it through my office. And that’s in order to keep all the due diligence in-house on our last, probably, 20 purchases. And the reason for that is we have done 19 of the 20, or possibly all 20, off-market. That’s our specialty. And people are shocked by some of the people selling to us off-market. The reason they do it is really simple: When we shake your hand, we close.
My own added value is really the speed with which we do due diligence. And we do not go over our budgets. We have never needed a capital call. Well, I won’t say that. We did require recapitalization on two properties: 1 Park [Avenue] and 1180 [Avenue of the Americas]. That was in 2008, when everyone was losing their properties. So I actually think that keeping our partners in the deals without losing their equity was a feather in our cap.
Recent promotions within the firm have led [President of Brokerage Services] David Greene to proclaim a much more collaborative culture at MHP. Would you agree with that? How has the tenor of MHP evolved?
It has changed dramatically for two reasons: We’re more service-oriented, and we perform at a much more sophisticated level. That’s due to going from doctors and dentists to the Jamestowns and INGs. And that’s when we recruited new people. We can report with the big boys and compete with them. Our product is as good, if not better. And I find our detail has more information, because we’re landlords and know precisely what’s necessary.
Very rarely does one broker go out for a 10,000-square-footer without either one of my project managers or another lead broker. We add asset management if necessary. And I’ll even go to a meeting if the requirement is large enough where we pitch the whole package and hear their plans on a larger scale.
Do brokers do that? Of course, there are great brokers out there. But I don’t think Cushman necessarily goes to its project management department and pulls some guy out when they’re looking for information.
What can we expect from MHP over the next 12 months?
As always, we’ll look on avenues above the 30s and below the 60s for undervalued—say, B+—properties, not too far east of Third or west of Eighth. But that’s changing with Hudson Yards being built. And I think the B and C product will explode when that gets off the ground. We’re certainly looking farther and farther west than we normally would have.
And how do you see your own career and place within a more collaborative MHP’s hierarchy changing?
I don’t mind being the guy behind the man. I don’t want to be famous. I just want to be rich. I don’t have that big of an ego. It’s filled with so many other reasons to be egotistical. I don’t need it on the business end.