More Condo Buildings Are Converting To Rentals After Not Selling 15%.


Nick Hetherington
If you are a developer in today’s market and the original vision you had was to sell luxury condos at a high price psf but your sales office opened in 2008 or worse later, today you are being forced to restrategize.
There are several options open to you depending on the category for which your building falls under. So, which way do you go? Well, according to the Wall Street Journal [a pilot program, which aims to convert as many as 400 units, is designed to provide grants to real-estate developers and lenders to subsidize the completion of developments if the owners agree to turn the building into rental units for middle-income families. City officials said New York’s effort would target neighborhoods that are being hard hit by the condo construction bust, including Harlem in upper Manhattan and New York’s outer boroughs].

Ok, so some relief there for a few developers. What other options are there if you have a building outside these parameters? What if you’ve sold the requisite 15% of your inventory to be declared effective by the city? You could decide to create a rent to own program like 75 Wall street, Sutton Manor on East 53rd Street, 99 John Street, the Revere on East 54th Street and Morgan Court on Madison Avenue. In Brooklyn, the BridgeView Tower. Northside Piers and the Decora are among those with this option.
For more on this go to The NY Times article that appeared in December 2008.

For those of you that have been less than fortunate in moving your condo product, there is another option. Turn your building into a full rental property. This vehicle is reserved for projects that could not sell the requisite 15% that the city demands before they can declare the building effective as a condo property. The buildings that fall into this category so far are The Milan on west 23rd street and 6th avenue, The Remy on 6th Avenue and 27th street, rental prices here are quite moderate, so renters should take advantage while the developers are on the ropes. Others that may follow suit could include the high profile property with a great deal of celebrity traffic The Apthorp. The sponsors have until September 15th to make the grade. How much rentals would go for here is another question entirely.
But considering the drama that has surrounded The Apthorp, it will surely continue to make the real estate headlines.

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