Buying hallway space in a coop

Just curious - why would you want to buy 10sf of hallway space? What does that do for you?

Unless you put together 2 adjoining apartments and this gives a better flow

I did. It gives a better flow. But only marginally. That's why I want to know about implications of doing it...

My co-op's done that seven times over the last 20-odd years. The additional shares come to a bit less than 1% of those outstanding, or the equivalent of another small apartment, so the cash and additional maintenance income are good for the shareholders.

The co-op would just void your current stock certificate and lease, and give you new ones.

Your share-loan lender has your current stock certificate, so you'll have to let them know in order to make the swap. Should be no big deal.

Just buy it off your current mortgage. You own two pieces of stock in the corporation then. You can ask your co-op if they would agree at sale time to issue new stock to the new owner to incorporate the new shares to the new owner. The risk of asking for a reissue after your incorporate the space while you still have a mortgage is someone at the bank has a cow and wants a reappraisal to see if you violated the mortgage by harming the collateral.

We bought space from our co-op. Paid cash for it.

The building allowed us to have two stock certificates and leases as long as we signed an agreement saying they were forever "coupled" and indivisible; we could not sell one independently of the other, etc.

We had a separate stock certificate and just held it in our own safekeeping for a few years rather than get our original lender involved.

We later refinanced and were going to combine the stock certificates, but the bank (Citi) was perfectly fine accepting two. When we eventually sell, the building will combine into one certificate.

We've been considering doing this as well. What's the thinking on pricing (i.e. how much $/sf)?

Negotiations start at the recent going rate per share.

E.g., http://streeteasy.com/sale/1112384-coop-205-east-78th-street-upper-east-side-new-york, where the buyer paid $1,400,000 for 615 shares, and at the same time bought three shares worth of hallway from the co-op for $8700, a slight premium. If you want the space, you're a captive buyer.

The co-op will first calculate an appropriate number of shares to allocate to the space.

I've heard the opposite. It's undeveloped space that you (the shareholder) need to do a lot of work (for a very little amount of space) to transform into livable space. I probably wouldn't pay more than 50% of what regular shares are trading for...

I guess it depends when you're buying the space though.