Stephen G. Kliegerman
President of Development Marketing
BY GABRIELLE BIRKNER - Staff Reporter of the Sun
An influx of available pre-war condominiums is reconfiguring city's purchasing landscape, in which would-be homeowners pining after crown moldings, high ceilings, and herringbone floors have had little choice but to buy shares in cooperatives.
Residential redevelopment projects in stately old buildings — 823 Park Ave., 220 W. 93rd St., and the Plaza and Melrose hotels, to name a few — are making possible what many buyers see as the best of both worlds: the inimitable charms of the pre-war and the flexibility of the condo. With well more than 1,000 pre-war units in former rental, hotel, and commercial buildings coming on the market over the next couple of years, buyers wishing to bypass co-op board red tape will no longer be forced to resign themse lves to putting down roots in post-war or contemporary buildings.
These reincarnations could impel young families in Brooklyn and Lower Manhattan to reconsider the Upper East Side and the Upper West Side, according to a managing director at Brown Harris Stevens, Kathleen Sloane. "Young people don't want the co-op world, which is one of the reasons they've moved downtown," she said. "To the extent that there are condo choices, I think that they would strongly consider living uptown. Thirty year-olds today are resisting the idea of the co-op, because this generation does not want to live in buildings that, for one reason or another, their friends couldn't live in."
While they may be appealing to 30-somethings, many of the pre-war condominiums aren't priced as starter apartments, even by New York standards.At the 823 Park Ave.,a Greek Revival building where Ms. Sloane is the exclusive sales agent, price tags range from $8.75 million for a 3,000-squarefoot three-bedroom to $49 million for the triplex penthouse.
These prices reflect not only the size, grandeur, and location of the apartments — 823 Park Ave., a former rental building, is situated off East 75th Street — but also the limited availability of pre-war condos.
Along Fifth and Park avenues and Central Park West, pre-war condos are even more rare, and will likely stay that way, as most apartment houses there went co-op in the early- to mid-1980s."They are what they are, and the likelihood that they will be converted to condos is not very high" Ms. Sloane said, noting obstacles like land-leases, tax penalties, and shareholder opposition. "The only thing left are rental buildings, and there aren't that many," she said.
Citywide, about three-quarters of non-rental pre-war apartments are coops, according to statistics from the Real Estate Board of New York. (In total, about two-thirds of the non-rental residential market is co-op, REBNY data shows). The relative scarcity of such units means pre-war condos can fetch 20% more than comparable coops, a senior vice president of the Corcoran Group, Carrie Chiang said. "New Yorkers love pre-war," she said. "During recent years, people started to dislike co-ops because of all the restrictions, and they feel more comfortable with the idea of a pre-war condo, but there's nothing there."
The picture is now changing, and Ms. Chiang is helping that along. She's heading up Corcoran's sales efforts at an Emery Roth apartment house at 1200 Fifth Ave. — a former rental building that recently underwent a condo conversion. While buyers will always pay a premium for a condo rather than a co-op, the pricing gap could narrow, she said.
Amid the demand for pre-war condos, several city office buildings have been reincarnated as condos in recent years. Many older hotels also are cashing in. In addition to the Plaza and the Melrose, hotels in pre-war buildings that have recently or are now undergoing partial or full residential conversions include the Essex House, now the Jumeirah Essex House; the InterContinental; the Stanhope; and the St. Regis. Although run very much like condos, the InterContinental at 110 Central Park South, and the Stanhope are cooperatives because the developers don't technically own the land on which the buildings sit, thereby precluding condo conversions.
Former hotel layouts, often comprising smaller bedrooms, kitchens, and windows, are no longer major sales obstacles, according to the executive director of development marketing for Halstead Propery, Stephen Kliegerman. "A few years ago, what would have been a big challenge to convert present themse lves as opportunities, as demand for studios and one bedrooms increase," he said.
The proliferation of pre-war conversions points to the need for residential purchasing opportunities in Manhattan, according to Brown Harris Stevens's executive vice president, Ruth McCoy. "People are coming into the market at a younger age," she said. "They're making that one-bedroom purchase."
Given that demand, and given the elegance and value associated with prewar construction, many developers, she said, are "looking for opportunities that exist, rather than building up from the ground."
Thursday, July 27, 2006