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Norman Sturner Has the Midas Touch

Published by The New York Sun on 2005-04-28

He's had the Midas touch.

"Almost everything we've bought has turned to gold," Mr. Sturner said over lunch. "We've worked steadily, finding properties before the rest of the world knew about them, properties that were below the radar screen. And now, quietly, 35 years have gone by. It's been a wonderful time - and it's not over."

Since 1992, his company - which, he says, was also built on the "wisdom" of partners Neil H. Siderow and Michael Green - has brought 16 properties in Manhattan, whose 17 square miles contain 450 million square feet of commercial property. The acquisitions included iconic buildings such as 44 Wall Street, 30 Broad Street and 22 Cortland Street.

But, Mr. Sturner said, the last two years have been especially good. He has bought some 1.7 million square feet of commercial in this time.

"The Manhattan market really started to explode in 2004," Mr. Sturner said. "Money from China, South America, the Middle East, institutional money, it all started coming in. The Europeans were buying because of the decline in the dollar."

Among his own acquisitions were 225 Fifth Avenue, with 400,000 square feet; 135 West 50th Street, with 900,000 square feet; and 1412 Broadway, with 400,000 square feet. In all, seven buildings were bought, representing more than$450 million in value.

And now, Mr. Sturner said, "we've pulled a coup in this city again."

What sort of a coup, the reporter asked?

"We've signed a contract for a trophy building - it has a million square feet," he said.

Where was this building?

Mr. Sturner smiled conspiratorially, but declined to divulge the location.
So what explains his success?

"My stick-to-it-iveness," Mr. Sturner said. "I work 18-hour days. I just love the action, of being in midst of understanding the market."

Then he revealed one of his secrets.

"Before I buy any building, I walk around the block, I do my visuals," he said. "I stand across the street from the building and stare at it. I want to get its 'curb appeal.' It's a bit like hunting - you stalk your quarry first."

Mr. Sturner has been using that technique since 1972, when he bought 469 West 57th Street, a building with 31 apartments, for $140,000. He and Mr. Siderow raised $300,000 by persuading investors to cough up $14,000 each.

"The city was going through rough times," Mr. Sturner said. "They were giving away the city."

A succession of acquisitions followed. A building with 600 apartments in Queens was bought. Several properties in Manhattan were purchased. At that time, Mr. Sturner was not quite full-time in the real-estate business; he was still selling mutual funds.

"My partner, Neil, asked, 'Do you want to spend the rest of your life selling stocks?'" Mr. Sturner recalled. Mr. Siderow was selling insurance at the time. That's when they formed Murray Hill Properties.

And how did they choose the name?

"We were sitting in an office at 130 Madison Avenue, a building we'd acquired, and I was looking out of the window - when all of a sudden it occurred to me that we should call the company Murray Hill properties," Mr. Sturner said.

Such moments of epiphany have marked his professional life since his graduation from St. John's University, where he majored in accounting; he'd enrolled at college when he was just 16. The son of Polish immigrants, Mr. Sturner had met his wife Harriet just before he started college, and they were married before his graduation. That meant he had to work at nights to support his family.

He joined Horwath, a major accounting firm. He was given several intriguing accounts to handle, including those of the 21 Club, Longchamps, Judy Garland, and Barbara Walters. Ms. Walters, he said, memorably screamed at him for a perceived gaffe on his part.

He tells entertaining anecdotes from those early days of his career as an accountant. Then there was that time when his first child, a son, had just been born, and Mr. Sturner was handing out cigars at the office. His supervisor, a mercurial man, offered no congratulations but instead yelled at him over a minor matter. That's when Mr. Sturner walked out.

He became a part-time salesman of mutual funds, and then expanded his business in such a way that in three years he became the biggest dealer in Dreyfus funds. He also opened a private tax practice. Sometime during this period, he met Mr. Siderow.

"We had instant rapport," Mr. Sturner said of the man who was to become his partner in business.

As their business developed, Murray Hill Properties became what Mr. Sturner calls an "opportunistic purchaser of real estate."

The company's Web site says: "We create value by locating and actively repositioning, renovating and/or re-capitalizing under-performing or under-utilized assets. Our investment objective is to identify Class 'B/B+' office buildings, greater than 100,000 square feet, located on a main thoroughfare in Manhattan. This type of asset caters to a broad base of tenants and typically provides for a significant rental rate advantage over Class "A" buildings. With intensive management and leasing focus, such buildings can be extremely attractive to the astute investor and can produce superior investment returns (20+ %) during a typical holding period between 30 and 60 months."

The high rate of return has attracted a number of investing partners, such as ING Realty Partners L.P., Credit Suisse First Boston, Olympus Realty Partners, Blackacre Capital Management LLC, General Electric, and Seavest LLC.

These partners have heard legendary stories of Mr. Sturner's integrity. Before a man named Joseph Morningstar introduced him to Andrew Stone, then of Credit Suisse-First Boston, he said to Mr. Sturner, "I'm told that you're a handshake kind of guy."

Mr. Stone ensured that CSFB put up 90% of the money in Murray Hill's acquisitions; Murray Hill and its partners provided 10%.

"We've never taken a loss," Mr. Sturner said. "I've learned my trade very well."

A significant part of that learning process has been the cultivation of potential investors.

"I know every major investment banker in town," Mr. Sturner said. "I believe in building strong relationships. People will invest with you only if they trust you."

He's formed a "high-net worth fund," for which he's already raised more than $21 million. Another fund raised $45 million. His next fund, Mr. Sturner said, will aim for $150 million.

"We will spread our wings beyond New York to Boston, New Jersey, and Washington," he said.

But his love remains New York, Mr. Sturner said.

"This is the center of the world," he said. "There's simply no other place like it. The vibrancy of the city, the action, the life - where else can you find the spirit of New York? I live in New Jersey, but come Sunday evening, I just can't wait for Monday morning. I just can't wait to get back into New York."

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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