A developer who helped build modern New York City skyscrapers has moved back home to Michigan to fill a gap he sees in Traverse City’s market for luxury real estate.
Andrew McCarthy, formerly a developer with New York firms such as Uovo, Avery Hall and JDS Development Group, moved his family to Michigan full time last fall to focus exclusively on his new luxury residential real estate venture he founded in 2021.
Traverse City-based Freshwater Development is currently building the Penthouses at 111 State in downtown Traverse City, a boutique luxury development with two full-floor, more than 2,400-square-foot suites that hit the market for pre-sale on May 13 for $2.95 million and $3.25 million, respectively. Construction on the part-adaptive reuse, part-new construction project is expected to wrap up later this summer.
The 39-year-old McCarthy called the project a “labor of love” for its complexity, which included building a ground-up addition that he seamlessly matched to the existing 125-year-old structure at 111 State St. while also adding new subterranean walls to support the weight of a third story and rooftop deck.
“When you’re working around and through and with a 125-year-old structure on a very prominent corner, I think you have a real responsibility for the community to build something special, and we took that pretty seriously,” McCarthy told Crain’s. “That’s where the labor of love thought process came into play.”
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McCarthy also is renovating a trio of attached brownstones three blocks away, at 100 Park St., that will likely list in June. Each brownstone will include private boat slips on the Boardman River, which flows out into West Grand Traverse Bay.
Roots were calling
While in New York City, McCarthy oversaw the development of more than $4 billion in commercial real estate. That included nearly three years working on the design, development and construction of Steinway Tower at 111 W. 57th St. that overlooks Central Park. The $1.5 billion, 1,428-foot skyscraper is the city’s third-tallest building, where residential units have sold from $7 million to $70 million.
McCarthy was named a Crain’s New York Business Notable in Real Estate in 2021 as well as a Crain’s Rising Star in 2019.
But he’s also a Michigan native. Born and raised in Grand Rapids, McCarthy earned bachelor’s and master’s degrees in architecture at the University of Michigan, then moved to New York for further graduate studies in real estate development at Columbia University. He stayed in the big city for 15 years, working in construction and development.
Eventually, McCarthy felt his roots calling to him.
“In the summers growing up, I would always come to Traverse City and the Leelanau County area, which is a really beautiful area … and I grew to love it,” he said. “As I was in New York, it kind of became a place where I used to come back a bit in the summer with my family.”
Traverse City market demand
During the pandemic, McCarthy started noticing a trend of high net-worth individuals from across the nation seeking new secondary homes in quiet, beautiful locales. With seasonal, less-than-two-hour direct flights from LaGuardia Airport to Traverse City’s Cherry Capital Airport, McCarthy saw an opportunity to build a new career — and new high-end housing — in Northern Michigan.
He started out by acquiring 7 acres of waterfront property in Leland Township that had two existing homes that he repositioned, fully renovated and sold in 2022 and 2023. He then built a third house on adjacent property that sold for $4.7 million in 2024. His resounding success selling those homes assured McCarthy he was on the right track, prompting his permanent move to Northern Michigan.
Now a Traverse City resident, McCarthy is all in on Freshwater Development. He’s built a team of four employees, all of whom established themselves in construction, development and sales roles in larger markets before making the leap to join his team.
Lydia Wiley, a longtime real estate agent in the Chicago market, is filling dual roles as Freshwater’s director of sales and marketing and as a broker with Christie’s International Real Estate in Traverse City. The Christie’s Traverse City office will move into a new suite on the ground floor of 111 State when the building is completed. Wiley is also the broker for the penthouse listings.
Wiley, a Traverse City native, said the pandemic brought her home.
“I was working in the Chicago market as a broker for 10 years, and COVID was the catalyst to bring me back to Traverse City,” she said. “My family is still here, but I was definitely surprised at how much it had grown. I noticed that there was such a need for nice housing here, and there just was a big gap (between) what was available and what the demand was.”
In Chicago, Wiley found success marketing the Midwest as a climate haven for residents of the Southwest and West Coast displaced by fire and extreme heat and to those in the South affected by floods and hurricanes. She sees a similar storytelling opportunity for Traverse City.
“People out West are very attuned to (areas of climate resilience), because they’re very affected by it,” she said. “Michigan is supposed to do well in the future.”
Wiley said she saw Freshwater Development as a firm that came along at the right time, as the formerly “sleepy little vacation town” of Traverse City morphed into a place with James Beard Award-level restaurants and a vibrants arts, culture and retail scene.
McCarthy layers onto that his experience with rising real estate prices in New York, knowing that peers of his are fleeing the city in droves to find more space, beautiful views and cheaper home prices in places like Northern Michigan.
After finishing the three single-family standalone homes in Leland, McCarthy is eager to see the reaction to his nearly finished penthouse suites at 111 State St. Freshwater was the developer, architect and construction manager on the project, a model that McCarthy said is in his “DNA.”
He said the penthouses are of a “high quality” that is “in demand” but not yet available in Traverse City.
“When we sold the beach house, that was the feedback that we got last summer,” he said.
Wiley said she’s excited to market the properties to clients in Detroit, Chicago and beyond.
“It was really fun to partner with Andrew because he was interested in building to that spec and meeting that growing demand for high-end luxury properties in a growing area where people are coming from bigger cities, and they’re used to a certain level of finish, a certain level of quality, and they just weren’t seeing it in Traverse City yet,” she said. “We’re giving it to them now, and I think it’s really exciting.”
Just the beginning
The penthouses will each have private climate-controlled garages with EV charging stations, private elevators and private rooftop access with views of Lake Michigan. Each unit offers five bedrooms, three bathrooms, a library, an open kitchen and dining area, and a light-filled great room with expansive corner windows.
The interiors will boast natural marbles, white oak floors, top-of-the-line appliances, more than 10-foot ceilings, custom millwork and oversized windows that flood the space with natural light.
McCarthy spared no expense on the exterior, as well, aligning the new masonry with the old, rebuilding the windows for maximum energy efficiency and aesthetic historical accuracy. He’s also planned a mural on the side of the building that will overlook Rotary Square Park to align with Traverse City’s planned improvements to the park.
He said he’s looking forward to tackling more projects in Northern Michigan, particularly Traverse City.
“We’re really focused on the natural resources that are here,” he said, emphasizing “the trails, the beach, the waterfront, Boardman River where it goes right through downtown,” and properties that are on corner lots near waterfront to maximize light and views.
“This is just the beginning for Freshwater in Traverse City,” he said.
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