Condo vs Coop

[David Goldsmith]

Back in the late 1980s it seemed like >95% of listings were Coops. Today it's about 50/50.

TRD Pro: 12 Years of Manhattan Condo and Co-op Sales Inventory

Manhattan co-op sales inventory is greater than condo inventory, but StreetEasy data reveal this wasn’t always the case.

therealdeal.com

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What happened to NYC’s condo glut? Here’s a look inside the numbers​

Data reveal historical swings as oversupply problem came and went​

Snap quiz: Over the past 12 years in Manhattan, which has been more available, condos or co-ops?

Sorry, trick question. The answer has changed repeatedly as developers tried — sometimes in vain — to match their products to market demand.
Generally, buyers have gravitated away from co-ops in favor of condos, pushing the latter’s median sale price significantly higher. According to real estate appraisal firm Miller Samuel, the median sale price of Manhattan condos in the third quarter was twice that of co-ops at $1.6 million versus $800,000. In 1994, they were virtually identical.

In October, the borough’s co-op inventory was 4,714 units while condo inventory was 4,414.

Manhattan condo and co-op inventory have swapped places over the past decade, with each outpacing the other for long periods.
According to StreetEasy data, from September 2010 to November 2013, co-op inventory exceeded that of condos by an average of 603 units.
Then, condos began a seven-year run until June 2020, during which inventory was greater than for co-ops by an average of 558 units.

This, of course, was unwelcome by condo sellers, especially developers whose sales projections were thrown off by the glut of units on the market.
There was only one month during that streak, in October 2019, when condo and co-op inventory were nearly identical.
The two eventually swapped places again, and since July 2020, co-op inventory has been greater by an average of 326 units. July 2022 was the only month when condo availability exceeded co-ops’ — by a mere one unit.

Even since the condo glut abated, some sellers have struggled to unload their units for the prices they expected. High-profile sellers including Julie Koch, former treasury secretary Steve Mnuchin and former Merrill Lynch CEO John Thain have all struggled to sell their trophy co-ops. Their properties have either spent years on the market, sold for deep discounts or both.

In the past 12 years, the median number of condo and co-op listings have been close: 4,142 condo units and 4,025 co-ops.
Condos remain desirable for investors, as buyers cannot only shield their identities behind LLCs but avoid extensive disclosure requirements and approval from hoity-toity if not outright discriminatory co-op boards.

 

[David Goldsmith]

Ranking of NYC Brokerages for Co-op Sales

Four top firms sold 54% of NYC co-op volume in 2022, with Compass leading with nearly 18% market share.

therealdeal.com

Compass No. 1 as four firms dominate NYC co-op sales​

Brokerage had nearly 18% market share, followed by Elliman, Corcoran, Brown Harris Stevens
Brokering co-op sales can be tricky — agents don’t just need to find the right unit for a buyer, but also the right buyer for the board.
Last year’s deals show having an established network might give brokerages a boost with the property type. The city’s four biggest firms brokered more than half of all co-op transactions in New York City last year by volume, with Compass alone commanding nearly 18 percent market share.

To measure firms’ success in this market segment, The Real Deal drilled into the dataset of 58,000 deals from our recent overall brokerage ranking, but this time looked specifically at co-ops.
Compass sold 2,490 co-ops in 2022 with a total volume of $2.8 billion, according to an analysis of sold listings across the city from last year. That’s about 30 percent more — in both deal count and volume — than runner-up Douglas Elliman, which closed 1,739 co-op deals for just over $2 billion.

The Corcoran Group sold 1,578 co-op units last year for $1.98 billion, and Brown Harris Stevens moved 1,348 co-ops with a volume of $1.76 billion.
Those four firms sold more than 42 percent of all co-op units sold in the city last year and accounted for over 54 percent of dollar volume.
The No. 5 spot went to Sotheby’s International Realty, which closed just 357 co-op deals in 2022 but reached a total volume of $818 million. Sotheby’s average price of nearly $2.3 million per co-op unit was by far the highest of any of the ranking’s top 10 firms.

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BHS won the distinction of brokering the priciest on-market co-op sale of last year — the $25 million trade at 950 Fifth Avenue in Lenox Hill. That was just the third-most expensive co-op deal of 2022. The top two transactions — the $101 million sale of a pair of units at 4 East 66th Street belonging to the estate of Microsoft co-founder Paul Allen, and the $35 million sale of EisnerAmper co-founder Richard Eisner’s co-op at 1107 Fifth Avenue — were both off-market. Off-market sales accounted for nearly 16 percent of co-op deal volume in 2022.

Compass owed its top-ranking dollar volume to its large number of smaller deals. The most expensive co-op the firm sold last year was just $9.8 million, coming in behind Elliman’s top deal at $16.6 million, Corcoran’s $24.8 million top sale and, of course, BHS’s $25 million transaction. Overall, Elliman handled four, eight-figure co-op deals in 2022, BHS six and Corcoran nine.
Coldwell Banker Warburg — formed by the national chain’s 2021 acquisition of one of New York City’s last independent brokerages — relied on co-op sales for more than 71 percent of its total deal volume last year, though its $223 million worth of co-op deals was only enough to earn the firm the No. 7 spot overall. Sotheby’s and No. 8-ranked The Agency both owed nearly half of their deal volume last year to co-op sales.

 

[David Goldsmith]

Poll Shows Broad Support for Co-op Disclosure Bill

Poll shows broad support for co-op disclosure bill

www.habitatmag.com

CO-OP/CONDO BUYERS WHAT CO-OP/CONDO BUYERS NEED TO KNOW POLL SHOWS BROAD SUPPORT FOR CO-OP DISCLOSURE BILL
Poll Shows Broad Support for Co-op Disclosure Bill
Bill Morris in Co-op/Condo Buyers on May 25, 2023

New York City

Co-op buyers, co-op boards, rejected applications, Intro. 915, disclosure.
May 25, 2023 — Public believes co-op boards should be required to reveal why they reject buyers.

A new poll suggests there is overwhelming public support for a bill now before the New York City Council that would require co-op boards to disclose their reasons for rejecting applications from apartment buyers. The bill, Intro. 915, introduced in February, is the latest in a long string of efforts to bring added transparency to the workings of co-op boards. It is vigorously opposed by co-op board advocates.

The poll, conducted in early May by the political consulting firm Slingshot Strategies, surveyed 1,500 registered voters in New York City — not necessarily co-op shareholders or board members — and found that 68% were in favor of such a bill and 15% were opposed. The support was high among all age groups, races, genders, political parties, boroughs and income levels. The highest levels of support by borough were in Manhattan (73%) and over $150,000 in income level (81%). The poll had a 2.5% margin of error.

“The support is pretty overwhelming” says Evan Roth Smith, a founding partner at Slingshot Strategies. “When we see this level of support among high earners in Manhattan, it suggests that the respondents were familiar with co-ops. It’s clear from this data that most people feel the board application process could be made better. I’ve been through the application process, and this wouldn’t be the first time shareholders and board members differed.”

The poll posed the following question: “Under current law, a co-op board is allowed to reject the buyer that the current apartment owner wants to sell to, and doesn't have to tell the rejected buyer why. Would you support changing the law so that co-op boards would still be able to reject a buyer for the same wide range of reasons as now, but would have to provide a written statement of reasons to the rejected buyer?”

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The question addresses one of the claims by opponents of the current bill and its previous incarnations: that such legislation would restrict the reasons for which co-op boards could reject purchase applications. In fact, Intro. 915 states: “No provision of this chapter shall be construed or interpreted to restrict or expand the reasons for which a cooperative corporation may lawfully withhold consent.”

(Public Advocate Jumaane Williams, a sponsor of Intro. 915, hired Slingshot Strategies as the primary data and polling vendor for his 2019 campaign.)

Intro. 915, which is currently stalled in the city council’s Committee on Housing and Buildings, requires a co-op board to give all reasons “with specificity” why it rejected a purchase application. “The statement must convey sufficient information to enable a prospective purchaser to take specific steps to remedy any specific deficiencies in that application,” the bill states. Boards will have to produce the written statement within five business days of the rejection. A co-op board’s failure to comply in a timely fashion can result in statutory damages against the corporation, ranging from $1,000 to $25,000.

When the bill was introduced in February, Marc Luxemberg, president of the Council of New York Cooperatives & Condominiums, called it an “outrageous intrusion into the functioning of boards” that's designed to “discourage co-op boards from turning people down.”

Geoffrey Mazel, counsel for the Presidents Co-op and Condo Council, added that the proposed fines are “punitive and outrageous.”

Craig Gurian, a lawyer who has pushed to expand the city’s Human Rights Law, disagrees. “One doesn’t need to live in a co-op to know about the discrimination and arbitrariness that characterize some co-op boards,” says Gurian, who has served on co-op boards and is currently a co-op shareholder. “Board members are outliers in terms of wanting to preserve secrecy and unaccountability. The rest of New York — including co-op owners, but not board members — overwhelmingly supports disclosure.”