One in Five Condo Units Are Sold to Investors

There’s a long list of reasons why many co-op and condo boards frown on excessive sublets in their buildings. The reasons range from the physical wear-and-tear of people constantly moving in and out, to illegal sublets, to shareholders’ difficulty refinancing their mortgages when renters outnumber owners. For most buildings, a high ratio of owner-occupied apartments is the Holy Grail.

Now there’s a new wrinkle to the equation: more than 20 percent of new condo sales are to investors, appraiser Jonathan Miller tells Curbed. And a growing number of the wealthy absentee condo owners who try to rent their posh apartments are not finding any takers, due to a glut of supply and sky-high rent.

Case in point: a poor couple from Beijing who paid $3.95 million in 2013 for a 40th-floor one-bedroom apartment with Central Park views at supertall One57. They bought the apartment as a “long-term plan” for their children when they go to college. Though the couple chopped the rent from $15,000 to just $12,950 a month, there have been no takers.

“The market has changed completely,” Douglas Elliman broker Sherri Shang says. “I never expected three years later that even with a Central Park View, that it would be so hard to rent out now.”