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Does anyone know the state of the land-lease agreement? Is it likely being re-negotiated?
It still terminates on 5/1/2049.
The landlord is carrying a mortgage of $27,000,000 on the property. There's no reason at all for the landlord to agree to change the terms.
So that would basically mean that maintenance would sky rocket?
What would happen if the landlord did not want to renew? What would it mean for owners of the units?
Anyone living in the building have any insight?
The rent the co-op pays to the landowner is most likely tied to the value of the land. In a typical lease, that value is reappraised every five or ten years or so. There're lots of other complexities and trade-offs incorporated in the terms, but that's the principle.
If the co-op doesn't want to keep paying the naturally-escalating rent, it can default. Then the assetless co-op is evicted and the shareholders become tenants of the landowner until the landowner can boot them out.
Same thing at the end of the lease. The co-op and landowner then negotiate a new lease, or the co-op can buy the land, or the landowner can redevelop the land if the co-op can't make a better offer.
All that depends on the particular property. This one might not be zoned so as to allow a high-rise, so the co-op might be in a better position at lease end than, say, 101 W 23.
What makes it fun is that the landowner was often the sponsor of the co-op, and may still own shares. E.g., when Two Fifth bought its land, a chunk of it was the Rudins swapping money from one hand to the other.
Isn't the co-op made up of unit owners though?
seems like a crazy situation
The co-op has shareholders, each of whom has a proprietary lease for an apartment. All of those leases end on 5/1/2049. (A sublease can't be for longer than the main lease.)
The co-op's only real asset is that lease with the landowner. When the lease ends, the asset is gone and the shares have no value. All the co-op can do is negotiate with the landowner for a new lease or to buy the land.
We haven't yet seen all the possibilities, because most land-lease co-ops and their leases date to a few decades ago, and their terminations are still decades away.
I can't believe anyone would buy here. Everything can be valued but....