Why so many Citylights units for sale?

The high maintenance fees in my head were a bit of a scam. Folks are told they are "buying" and prices are cheap, but basically because the building had a SUPERhigh mortgage so most of what would have been the purchase price was in THAT debt, and you were paying that mega mortgage, too.

Chickens are finally coming home to roost.

also, LIC was just overbuilt.

Re. LIC being overbuilt: And even more buildings coming online...

By the way, I've been trying to guesstimate, given the number of shares of a unit and/or its cost of maintenance, how much exactly is one taking on in building mortgage debt, and also how to convert that to the "real price" of the apt. (offering price of the apt. + its building mortgage debt.)
The answers can be in either a dollar amount or percentage to be added to the offering price.

I'm sure some wiz out there has built a model... :)

I think a lot of the information for the model should be publicly available.

i seem to recall that 40-50% of your maintenance is the interest on the building's underlying mortgage, so that part is tax deductible. i did the math awhile back and realized that for the effective monthly cost (mort pmt + maintenance), you can get a comparably sized unit at some of the newer condos, which makes sense.

the building itself feels very dated, and the massive capital project seems to be going on forever, but on the plus side, it has none of the issues that other condos have.. probably the best location out of any building in LIC...

Citylights has been around 13 years now. A lot of people who bought into the building then were younger, single and/or without kids. As time has passed, their family has grown and they're looking to trade up to bigger spaces, I think.

The whole thing with Citylights is the views, which are pretty much set now since most of the area around it has been developed. You could argue that the Hunters Point South development will block some southern views, but I don't think so. Too far away to *significantly* affect the skyline views, but maybe you would lost some river views.

I've noticed every year people wait to put their places on the market during the spring, giving the appearance that the market is being 'flooded' with apartments for sale. This year is worse I think because of the economic crisis the last 2 years. I know several people who waited it out and sublet their apartments and are just now looking to sell.

And the facade work should be completed shortly, just waiting on the Department Of Buildings. The work itself is all done.

I was wondering, from way back when this building was in initial sales, if the underlying mortgage would be paid off on or before schedule (resulting eventually in a normalization of maintenance fees), or if it would just be refinanced and added to for all time.

Does anyone know what approach the Board is taking?

And what's the nature of the facade work? $$$?

If memory serves, I briefly considered buying there in the late 90's.
It was a very high floor (38 and higher) 2 bed/ 2 bath (it was small though, between 1000 and 1100 sq ft.).
The maintenance at the time was astronomical and turned me off ($2600 a month). And the sale price was cheap (around 180K).

Alanhart
Considering maintenance was $2600 THEN and those same units today look to be around $2400 per month, I'd say there was some serious restructuring.

Kafka
Are there really so many units for sale? There are 15 units for sale in a building that is 42 stories and according to the SE page has 522 units.

The underlying mortgage was refinanced within the last few years.

The facade work was mandated by NYC for a building this size. I believe it's required every 10 or 15 years. I forget which. The other waterfront rental buildings will have to go through the process too in a few years.

The true maintenance cost is a little more than $1000/month (depending on unit size). The rest of the maintenance payment is actually a mortgage payment to pay off the underlying mortgage. You get a tax deduction the same way as if you held the mortgage in your name (on the plus side the mortgage doesn't show up in your credit report). The underlying bldg mortgage was restructured a few years ago and the mortgage is being paid down significantly over the coming years.

For a 2BR unit, rule of thumb today is you should add $200k to the purchase price to make an apples to apples comparison. So if you purchase a 2BR unit for $625k/unit, then the "true cost" is more like $825k b/c of the assumption of the underlying mortgage. As the underlying mortgage gets paid down, you build up the equity in your unit. Let's say that Donald Trump magically came in the day after you bought your unit and paid off the underlying mortgage on the building (this is a fantasy, but play along), then you could turn around and all things being equal, sell your apartment for $825k.

Citylights still offers the best value and the best amenity package of any of the apartment bldg in LIC. It also has abundant, cheap parking and now storage. it's far superior to the View, which is losing mnay of the views and where the apartments are oddly shaped, feel small, and have no onsite gym or parking. The drawback to Citylights is that the unit finishes are a little dated so it's likely you will need to invest some money needs updating your unit.

2 questions-does anybody know how many years are left on the tax abatement and when the building pays off its mortg, will the maintenance go down?

anybody?

There was a $80MM 6.13% mortgage. I believe it was amortizing so will be paid down eventually (assuming they dont take out a larger mortgage when it refinances) This is a year old and they may be doing a refi soon.

It also a ground lease so you have to adj that compared to comparable condo which own the land they are on. Tax Abatement starts phasing out in 2018 (6 years)

Also I agree the statement the approx portion of mortgage is about $100k per $1000 maintenance (~$200k for 2BR/2BA)... But you don't have the flexibility to wrap it into your own mortgage at 4%. So you are paying 50% higher interest... I personally calculate a 50% higher amount for my comps.

When I looked there were over 100 sublets, building was old and I was thinking there is a lot of shadow inventory in this building... That said, I adjust down my price I'm willing to pay and would be willing to buy at the right price.

Does anyone know what kind of building (how high) will be build just west (and slightly north) of the building?

thanks dc, seems like the unit im looking at is way overpriced

The only space that's empty near Citylights is the library plot, which is west and north of CL. It is scheduled to be 8 stories, but there appears to be funding issues, so who know when it will be built.

And I believe there are less than 100 sublets in this building. Considering there are 522 units, still not bad, especially for this section of LIC.

The doormen have a list of available units for rent. Every time I have asked in the past 3 years there have been more than 30 units on the market, so 100 sublets sounds reasonable.

Freezer -- Can I ask what unit you were looking at? Also at what price (discount) might be reasonable?

There are two listings, one for rentals and one for sales. Three have never been 30 rentals on the listing at one time. Ever. I think currently there are only 4 at the listing at the front desk.