Convert Co-op Back to Retail?
Started by trishrose_1540673
over 10 years ago
Posts: 0
Member since: Nov 2014
Discussion about
I have a 350 sq.ft. studio co-op in Soho. It's unusual because of its ground floor location, with large windows and direct access to the sidewalk. Over the past 100 years it's been a bakery, a real estate office, etc. I don't think it was turned into a residential unit until the 80's. My question: If I were to consider selling, would I have to strictly sell it as a residential unit? Or if I were... [more]
I have a 350 sq.ft. studio co-op in Soho. It's unusual because of its ground floor location, with large windows and direct access to the sidewalk. Over the past 100 years it's been a bakery, a real estate office, etc. I don't think it was turned into a residential unit until the 80's. My question: If I were to consider selling, would I have to strictly sell it as a residential unit? Or if I were to keep it, could it be turned back into a retail space, where I would receive rental income and the co-op also receiving a fair share of income? I know my co-op board has been brainstorming of a way to generate income. We have a beautiful old building and want a reserve fund to address any future repairs. I don't think they can afford to buy my unit outright. And I don't want to sell my unit for less than it's worth. Any creative thinkers out there who know what options I would be allowed to consider? [less]
The co-op should buy your shares from you for whatever the space is worth as a store. It should have no trouble borrowing the amount needed, as the collateral is the whole building, not just the shares.
Then the co-op can lease the space out as retail, for more than the loan payments and lost maintenance.
It could be that the offering plan and governing documents anticipate the space possibly going back to non-residential use, so you could check those to see whether you can keep it and rent it out.
How would we determine its worth as a store? Hire a commercial realtor to appraise it?
Hi Trish! I live in SoHo...I notice so many ground floor spaces on Sullivan Street that would do well as a retail store! If you are serious about selling you should find a residential agent who also specializes in commercial (and access to Costar). You can double the exposure to buyers that way. They would have to change the CofO to commercial.
My team does a lot of mixed use transactions so we have access to Costar.
Its also smart if owners on the second floor know of retail sales that are below them. They could command a premium if they dual-listed their second floor space with the retail!