Are Co-ops Really Endangered or Is This Just a Lot of Hot Air?

Dec. 4, 2014 — A group of real estate executives recently sat with Gotham magazine to dish some dirt about New York City real estate — and what they had to say is worthy of some serious eyebrow-raising. According to the group, co-ops should be added to the endangered species list. "If you look at the resale as well as new-sell price data on condominiums, they are rising 30 percent over co-ops," said Nikki Field, senior vice president at Sotheby’s International. More scathing was Kirk Henckels, vice chairman of Stribling & Associates, who said: "Poor co-ops! They are stylistically and locationally unpopular; the structure of the deal is unpopular — they don’t have a thing going for them at this point." One piece of advice they offered? Convert co-ops into condos. Don't count the New York co-op out just yet, though. The group focused almost exclusively on a luxury market, but co-ops aren't about the 1 percent. They aren't country clubs; rather, they are communities — a major point the group seems to have missed. Consider also that sellers are going to prefer condos to co-ops; they are easier to sell because there's no board approval process, for starters. For all the stats they seemed to pull out of the air, the group also overlooked a pretty important one. In an economic downturn, co-ops endure. That annoying board approval dismissed as snobbery and "scrutiny [of finances]" puts co-ops on much firmer financial footing than condos, where unit-owners have a greater chance of foreclosing.