CO-OP/CONDO BUYERS

According to real estate investment trust (REIT) AvalonBay Communities, the housing boom isn't in Manhattan, reports BloombergBusiness. The place to watch is southeast Brooklyn. In Sheepshead Bay, for example, the second-biggest publicly traded U.S. apartment landlord is reportedly "planning 200 luxury rentals in the tallest tower the community has seen in decades." So much for all those luxury condo towers in Manhattan, particularly Billionaires' Row. "There's a lot of opportunity for developers to serve New Yorkers who are not billion-dollar bankers," David Maundrell, president of Brooklyn brokerage AptsandLofts.com, is quoted as saying. Maundrell adds: "To be able to build a luxury tower near the Atlantic Ocean in New York City is an extremely unique opportunity. It's probably the wave of something bigger." Maundrell, who takes a shot at hipsters from Williamsburg, nevertheless says the objective here is not to serve a market that is priced out of Manhattan. The idea, rather, is to "fill a void for luxury housing in an area that doesn't get much of it, and cater to people who work locally in Brooklyn or commute by car to Long Island or Staten Island." At least someone is thinking about those poor mega-rich who have nowhere outrageously expensive to live in the outer boroughs.

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When developer Vornado Realty Trust is finished, 220 Central Park South will have 118 units, split between a 69-story limestone tower and an adjacent 14-story villa. But already it looks like everyone wants a piece of the action in the latest addition to Billionaires' Row. The Real Deal reports that after just six weeks, one third of the condos in the building have sold. "Without a full marketing center, the REIT has commitments for over $1.1 billion from buyers," Vornado's CEO Steve Roth reportedly said during a first-quarter earnings call. Roth also called the accomplishments "extraordinary and unprecedented." Marketing guru Louise Sunshine is advising Vornado on the project and Corcoran Sunshine Marketing Group is handling sales, according to The Real Deal.

Rendering credit: Neoscape

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The real estate market in the South Bronx is on fire. And didn't we tell you that gentrification, once started, tends to build up momentum? It's good news for the middle class, which is scrambling for reasonably priced homes amid a city that is getting more and more expensive by the day. But it tends to spell out bad news for the poor who will most certainly be priced out of their homes. It may already be beginning. According to a new report from the Department of Finance on the banking needs throughout New York City, nearly 30 percent of all home loan applications were denied in The Bronx. DNAinfo reports that the "amount is well above New York's denial rate of 23 percent and almost twice as high as Manhattan's 17 percent," adding that "Assistant Commissioner Elaine Kloss attributed the high denial rate to a variety of possible factors, including the borough's comparatively low income levels and banks' reluctance to give out subprime loans following the 2007 recession." Driving up the denial rate is the number of people who could have qualified for subprime loans and are now getting denied. However, the data is from 2013, so Dr. Daniel Miles, director at Econsult Solutions, the economic consulting company that submitted the report to the finance department, told DNAinfo that the South Bronx's newfound popularity as the next It neighborhood might not be evident in those figures yet, nor will it be for another one or two years.

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There's a new Fannie Mae rule in town, and if not checked, it could throw a wrench in hundreds of co-op and condo apartment sales. "It's like one step forward, two steps back," laments Mitchell Unger, controller at the management company The Lovett Group. He found out the hard way about this new rule, which Fannie Mae, instituted on March 31. A broker handling a sale at Forest Hills South, a Queens co-op Lovett manages, "was working with Citibank, who notified the broker that the buyers were being turned down at this tremendously healthy building since [the cooperative corporation] had more than 15 percent of its income generated from non-shareholder revenue." Citibank also turned down buyers at another Lovett property, the tony Upper East Side's 49 E. 96th Street. The so-called "80/20 Rule" was relaxed in 2008, but co-ops and condos have been waiting until now for 30-year lease terms to expire so they can charge commercial tenants market-rate rents. Fannie Mae's new limit hits co-ops and condos just when their buildings finally stood to earn some serious money. Watch this space as we follow the story. 

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Show us a New Yorker and we'll show you someone who depends on takeout. Living near a few good places that deliver is arguably as important as scoring some nice digs relatively near a subway. But as Ronda Kaysen points out in this week's "Ask Real Estate" column in The New York Times, living near one is one thing. Living above one, quite another. A condo in the Financial District has instituted a special assessment to cover the costs of a lawsuit brought by the building to prevent a restaurant tenant from occupying the commercial space on the ground floor. One unit-owners asks Kaysen whether a board can use an assessment forcing everyone to pay for a lawsuit that not all residents actually support. Kaysen explains that condo boards are allowed to sue on behalf of the building, "even if some owners disagreed with its merits." And condo bylaws allow boards to collect common charges and special assessments. In fact, adds Marc Luxemburg, a Manhattan lawyer who represents condos and co-ops, the Business Judgment Rule makes it particularly tricky for unit-owners to challenge the board's decision in this case.

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Last week, we shined a spotlight on how to choose the right venue for your board meeting. This week we take a look at the presentation the board prepares for the annual meeting. The presentation allows the board to keep building residents abreast of what's happening in the building, such as the building's finances and planned capital improvements or projects. 

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You've probably heard of crowd-funding, especially if you're on Facebook or any similar social media. It's a way for people to solicit funds for any number of projects via a crowd-funding platform. So, if you're a musician who doesn't have a powerful label backing you, you might use a crowd-funding platform to raise money for your next album. A craftsperson might use it to try to get his or her first business off the ground. Many people even use crowd-funding for charitable efforts or to try to offset medical expenses. Well, hold onto your hats, folks, because New York City's first crowd-funded condo project is about to hit the market. According to the New York Daily News, the project was "partially financed by investors who chipped in as little as $50,000 for a share." With apartment prices starting at $1.2 million, says the Daily News, "for once, the profits from the sale of pricey condos won't only enrich the developer." That's something. The project is a joint venture between crowd-funding platform The Prodigy Network and corporate apartment provider Korman Communities. The team "raised more than 10% of its equity from small-time investors to acquire and renovate the building. [And] those investors will catch their fiscal windfall when the building's condos sell out — and stand to make the 15% return that would normally line the developer's pocket." Not too shabby. The condos, located at 234 East 46th Street between Second and Third avenues, are all one-bedroom units and will very likely get snapped up by United Nations delegates. After all, nobody can resist a nice digs and an easy commute.

Photo by Prodigy Network

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It's not something you see every day: co-op owners in a building deciding to put the property up for sale. But that's what's happening at a seven-story building in Brooklyn Heights, developed by Francis Greenburger's Time Equities. According to The Real Deal, the co-op's board has put the 20-unit, 20,000-square-foot property at 159-161 Remsen Street, between Clinton and Court streets, on the market for $30 million. "The property has not changed hands since it was converted in 1982. The project [also] marked the first time that Time Equities had converted a vacant commercial building into a residential co-op." That's a long time. Matthew Rosenzweig, who TRD reports handles Brooklyn investment sales at Marcus & Millichap, "is marketing the building as a possible development site for [what else?] condominiums." And for a developer to get the most bang for his or her buck? It means demolishing the existing structure and replacing it with something that takes "full advantage of the 45,000 buildable square feet and 185-foot height limit." Go big or go home, eh? 

Photo by Nicholas Strini for Property Shark 

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New Yorkers love their views. They also don't shy away from expressing their displeasure when it comes to having those views obstructed — even if it's a lost cause. You might say that a New Yorker who doesn't complain isn't really a New Yorker. When the 14-tower got the green light in 2013 to rise on the north side of St. John the Divine on the Upper West Side, people were ticked off. They tried to stop it, but, reports DNAinfo, "the cathedral said it needed the millions of dollars generated by the [Brodsky Organization's 428-unit residential condo] each year in order to fund deferred repairs and maintenance on the aging structure." That doesn't mean Upper West Siders are going to quit kvetching about it, especially now that the tower is taking shape and blocking views of the historic cathedral. 

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According to a report released early this week by CityRealty, the average price of new development units in buildings such as One57 is expected to reach a record $5.9 million this year. Those "slumming it" in a regular old existing Manhattan condo can expect to pay closer to $2.7 million this year. That said, far fewer units are being built now than were build during the development boom of the mid-2000s; therefore, the number of closed sales is expected to increase more modestly than their prices.

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