Initial Promise: In 2011, Michael Stern and partners acquired the Art Deco New York Telephone Building in Chelsea, aiming to transform it into “one of the city’s finest luxury condo residences”. Renamed Walker Tower to honor architect Ralph Walker, the 1929 skyscraper was carefully restored and outfitted with top-of-the-line amenities.
The 50-unit conversion hit the market in 2013 to fanfare as downtown Manhattan’s most exclusive address, even achieving a then-record sale of a penthouse for about $50.9 million to an international buyer.
The project seemed a resounding success; by 2014 it was sold out and celebrated for marrying historic grandeur with modern luxury. Stern himself moved into a sprawling duplex, symbolizing his confidence in the development.
Failures and Controversies: Not long after, Walker Tower’s luster was tarnished by an international corruption scandal and plummeting values. The penthouse that sold for nearly $51 million was revealed to have been purchased with funds linked to the 1MDB Malaysian money-laundering scheme. U.S. authorities seized the apartment and, in 2020, auctioned it off for only $18.25 million – a 64% discount from its previous priceThe condo board was outraged by the cut-rate sale, which they said they never would have approved, and launched a failed legal battle to claw back the unit The 1MDB penthouse fire-sale shocked market observers and wiped out $32 million in value, underscoring how Walker Tower’s supposed trophy asset turned toxic. Other signs of trouble emerged as well. In 2017, Stern quietly sold his own Walker Tower residence for $21 million – 24% below the $27.8 million he originally asked – reflecting a softening market for the project’s ultra-luxe units. In the end, while Stern’s team walked away with profits, some condo investors were left with steep losses and a building mired in unwelcome headlines. Walker Tower’s saga served as an early warning that even a flawlessly executed development could implode in value if caught in broader financial scandals.
We hope that interested parties will send us any available information and documents exposing Stern’s fraudulent activities.