Unique Life Estate Listing in Chelsea for $499K Aims to Help Keep Older New Yorker in Her Apartment

Here’s an extremely rare deal in New York City real estate. In fact, it may be the first time a purchase arrangement like this has ever been publicly offered in the city.

The 81-year-old owner of a Chelsea apartment is seeking a buyer who will pay now for the 1-bedroom co-op unit, but grant her the right to live there for as long as she is alive.

It’s called a life lease, and while it’s a real estate transaction tool often employed in Europe, it’s far less common here in the United States, let alone New York City. The idea to employ this concept here is the work of Compass agent Dan Critchett, who holds this listing for 162 Ninth Ave. #3A, along with fellow Compass agent Steven Sinek.

“We had a client who wanted to sell her apartment, but didn’t want to move, so while I have brokered private, family transactions for life leases, I think this might be the first life lease ever offered publicly in New York City,” Critchett said.

As a former Goldman Sachs private wealth adviser with an MBA from Columbia, Critchett has extensive background in finance, and understanding of European real estate history. He decided to work out a purchase deal with his elderly seller and the co-op board for the landmarked, four-story, 1950 walk-up building.

The market price for the handsome apartment would be around $675,000, Critchett said, given its prime Chelsea location. The original list price was $525,000, but it has been dropped to $499,000, which has triggered a lot of interest.

“It’s a very active listing right now, with two offers and two showings this weekend,” Critchett said.

The deal would require an all-cash buyer, since a bank or mortgage company would not lend money under such purchase-agreement terms. That’s especially true under the rules of any co-op, where — unlike a condo, where a buyer gains an actual deed — shares of a cooperatively owned building are sold to an owner, who then gets assigned a lease.

The term “life lease” does not pertain to the actual purchase agreement, but instead refers to the sub-lease that the new owner of a co-op unit would write for the seller, allowing the seller to remain in the dwelling until she passes away.

Who would want a deal like this? Investors, perhaps, who see the long-term value of parking cash into a NYC building, especially a landmarked one like 162 Ninth Ave., which dates to 1835 and is part of a four-building co-op complex between West 19th and 20th streets in the heart of Chelsea.

“It’s a great foothold or pied-à-terre opportunity for anyone who may be out of the country at this time but who eventually wants to be back in New York,” Critchett said.

He said the deal may also appeal to buyers who seek a long-term play in Manhattan, and said the reduced sale price is an inducement similar to the way European properties have been sold.

“Families over there have sometimes owned property for hundreds of years, like on British of French estates. Or sometimes a buyer falls in love with a historic property in a city and there’s a older owner who has no heirs and needs money. These are circumstances where life leases are used,” Critchett said.

It’s also a device more older sellers could consider using, since reverse mortgages are not allowed in NYC for the precise purpose of keeping buyers or lenders from preying upon older property owners.

As for the seller’s apartment at 162 Ninth Ave., Critchett says he has offers in hand and more showings slated for this weekend. New York City may be on its way to recording perhaps its first public sale via a life lease deal.

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