UES Development Update: Azure
I love trying to explain what a "condop" is to buyers. Do condops exist anywhere besides NYC? I somewhat doubt it - we do everything a little different here when it comes to real estate! There are several definitions of a condop, but in the case of Azure, a new building going up at 333 East 91st St, a "condop" is a co-op with condo rules.
"Why would someone build a new co-op instead of a condo," you might ask. Azure has a 75 year lease on the land under the building. The City of New York owns the land. You can't have a landlease building that is a condo, so the next best option is to build a co-op that has condo rules. The developers of Azure agreed to rebuild a school next door as part of their development. The public school will be a "gifted and talented" middle school. In working with the City of NY on the school and on building low income housing outside of Manhattan, Azure may well be one of the last new buildings in Manhattan to receive a 421(a) tax abatement.
Since the building is a co-op with condo rules, it is investor friendly. You can rent out your apartment right away and there is no board approval for buyers when you sell the apartment. So you avoid the frustrating headaches that can come with owning a co-op. The building also requires only 10% down and the rest at closing. Generally in a new development, buyers would need to put down another 5% sixty to ninety days later. They are also offering closing incentives and attractive financing rates through their preferred lenders.
I think this building might be a tough sell for some people. In 26 years the land rent will be renegotiated with the City of New York and will be based on the market value of the property at that time. In 26 years in Manhattan, the value of land dramatically increases. So in 26 years, the land rent will increase and hence, the maintenance will increase. Additionally, in 10 years, the 421(a) tax abatement will be over, so those low monthly payments will only increase (recall Noah's post on 421A abatement). You'll never be one of those lucky co-op buildings that pay off their underlying mortgage & the maintenance actually goes down.
You're also paying almost the equivalent of condo closing costs (about 4% of the sales price for apartments over $1M, about 3% for apartments under $1M) but you're getting a co-op (usually your closing costs would be about $2,500 for anything under $1M).
15% of the apartments are sold and the sales office has been opened since November (unfortunately for them, November is probably the worst time to open a sales office, so they weren't blessed with great timing). The apartments are not exactly flying off of the shelves especially with the current market conditions.
The building's finishes are nice, the developer is open to combinations and buyers even have 4 choices for their kitchen cabinets and 3 choices for their counter tops. Usually, you get whatever finishes the developer says you get & all apartments are delivered with the same kitchens and baths; so its nice to have some level of 'choice'. Some of the apartments are around $1,000 per square foot, which is probably the lowest price per square foot for a new building on the Upper East Side. The 2nd Ave Subway will one of these years have an entrance on 94th street. Maintenance is around $1/ft on the lower floors, increasing to about $1.50 for higher floors. Studios start at $650K & one through five bedrooms are available.
Sample pricing. Maintenance is 53% tax deductible.
4D, 724 sq ft studio, $780K, Maintenance with 421a is $720.
4F, 601 sq ft studio, $605K, $596/month maint.
4B, 1063 sq ft one bed, 1.5 baths, $1.098M, $1,054/month maint.
8C, 2 bed, 2 bath, $1.55M, $1,728 maint.
18D, 2 bed, 2.5 bath, 1487 sq ft, 100 sq ft balcony, $1.697M, $2,141
18A, 3 bed, 3 bath, 1810 sq ft, $2.407M, $2,206 maint
31A, 4 bed, 4 bath, 2496 sq ft, 67 sq ft balcony, $4,127M, $4,517 maint.
Valet, 24 hour doorman & concierge, Residents' Lounge with Private Dining Room, Children's Playroom, Game Room, Fitness Center, Roof Terrace.
Storage Bins are also for sale.
Estimated Completion: Spring 2009.