I feel compelled to point out what I believe to be errors in an article about Sponsor Coop sales:
www.brickunderground.com
First of all, if you do the search they said they based the article on you will see that a large amount of the Sponsor Coops listed are new construction and are not conversions from Rent Stabilized buildings. No one died of Covid and vacated these units. They are newly build and never had tenants. In fact that is their major selling point. The only reason a lot of them are Coops is that they are on leased land or other deal structures which prevents them from being condominiums.
Secondly, a number of these units were previously on the market as free market rentals. They have come on now as sales because of the rental market crash and these Sponsors see how much better return they can get selling these units. If anything, it's a vote of no confidence in the market and the smart/old money is getting out while the getting is good.
Thirdly, once a building has gone Coop, when a Rent Stabilized tenant vacates a unit it becomes free market. As far as I know this was not changed by the Housing Stability and Tenant Protection Act of 2019. So it is not true that "sponsors may be choosing to sell their remaining inventory as they become empty rather than continue to rent them, given they are no longer able to substantially increase rents on these units." They can increase them to market, it's just as I pointed out above "market" doesn't provide the returns it used to.
FYI I confirmed the above with a major "holder of unsold shares" and they said it conformed with their current position on the market.
An increase in NYC sponsor co-ops for sale is likely a result of Covid deaths
It's a small fraction of the market but it's still an opportunity for buyers.
First of all, if you do the search they said they based the article on you will see that a large amount of the Sponsor Coops listed are new construction and are not conversions from Rent Stabilized buildings. No one died of Covid and vacated these units. They are newly build and never had tenants. In fact that is their major selling point. The only reason a lot of them are Coops is that they are on leased land or other deal structures which prevents them from being condominiums.
Secondly, a number of these units were previously on the market as free market rentals. They have come on now as sales because of the rental market crash and these Sponsors see how much better return they can get selling these units. If anything, it's a vote of no confidence in the market and the smart/old money is getting out while the getting is good.
Thirdly, once a building has gone Coop, when a Rent Stabilized tenant vacates a unit it becomes free market. As far as I know this was not changed by the Housing Stability and Tenant Protection Act of 2019. So it is not true that "sponsors may be choosing to sell their remaining inventory as they become empty rather than continue to rent them, given they are no longer able to substantially increase rents on these units." They can increase them to market, it's just as I pointed out above "market" doesn't provide the returns it used to.
FYI I confirmed the above with a major "holder of unsold shares" and they said it conformed with their current position on the market.