The Sabrina

Uncertainty about the market, uncertainty about the conversion, and maybe some lingering uncertainty about the neighborhood. Although the Ariel twins and Whole Foods are helping, 98th and Broadway still isn't 83rd and West End. In a downturn, marginal areas and buildings undergoing major changes figure to get hit harder than the established UWS co-ops.

Several risks:

1 - spend time in the lobby and you'll see all the rental tenants ... not that there is anything wrong with renters themselves, but you'll see smoking in the lobby, loitering, etc. This won't necessarily be a family building

2 - just undergoing conversion ... will be many many years of supply in the building, meaning unlikely to get the same type of price appreciation you'll see with typical buildings

3 - underinvestment in the building facade and structure. Based on the work done and the work being performed, there are major work projects to be completed over the next several years. The amount of the building reserve is undetermined as of yet, but my expectation is that any buyer has to expect some significant assessments in the future.

4 - new conversion, not new construction means high taxes

5 - type of building, and especially the rental base, means higher common / maintenance costs.

At about $750-800 psf, the risks above are probably worth it, in my opinion, with the biggest likely headache being #3

Mattthecat summarized the risks very well.

Just as an aside, I live in a similar building currently undergoing condo conversion. Only four insiders have signed, and there really isn't anybody left who can pay the asking prices, even with the insider discount.

The Sabrina is probably in the same bind: lots of rent-stabilized and rent-controlled tenants who have little incentive to buy, and who probably couldn't qualify for a million-dollar mortgage if they wanted to.