140 Riverside A&E

I have no information about that only curiosity. How/why, would an established Coop convert to Condominiums?

There was a movement in the 1990s to convert Coops to Condos but I am only aware of 1 which actually went through the process - 30 West 90th St.

https://www.nytimes.com/2007/04/08/realestate/08home.html?ex=1333684800&en=2ef36848c429930a&ei=5088&partner=rssnyt&emc=rss

https://streeteasy.com/talk/discussion/13285-co-op-conversions-to-condos

Why would the Normandy consider converting to condos? What would be the upside to that?

Can't imagine why a Co-op would convert to condo now that cheap money has ended and the condo premium will come down accordingly.

Is it possible the subject is actually 140 Riverside Boulevard?
https://rew-online.com/cbre-arranges-sale-of-140-riverside-blvd-for-266-million/

Probably 140 R.B. 160 R.B. is the 2nd building that A&E has bought from Equity Residential (140 R.B. being the first), and it wouldn't surprise me if they added 180 at some point (also owned by Equity). But, they're not a company known for conversions, so that likelihood seems remote -- there may be some rationale for buying 180 and then converting the entire pile to some mega condo, but one would have to ask why bother, really. (Didn't realize that Equity controls some ~15,000 apartments across the city.)

Aaron,
What price per sq ft do you think a mid floor condo with water view in 140 will sell for? A and E paid $264mm for call it is 290,000 sellable sq ft.

My fastest back of the envelope calculation might be to compare this block of buildings (not all of which units will have water views) with a similar neighborhood grouping, and similar quality characteristics -- ordinary econoboxes of varying sizes, in relatively large buildings, nothing special re finishes, nothing special re location, other than some units with riv.vus, and similar quality of construction and overall attention to maintenance. Perhaps consider condos in BPC as a rough equivalent? (both locations suck equally, in my book so I'm not playing favorites here). Still, if I'm approaching a commercial transaction, I just want a blended ppsf across similar structures for the entire package. I think BPC units ask a range of $1.2k - 2.25k/sf, maybe $1.7k overall average, assuming 'as is'. The Riverside Blvd block might reasonably get $2k or a bit more if buyer takes a developer role and does some serious upgrading and has flashy marketing. So, very roughly, if the purchase was at $264m/290k.sf=$910/sf, and you're selling at 1.7k/sf, I would hope there's some profit locked away in there, even with some outlays for lipstick, wigs, and selling effort.

But, a little 'follow the money' diligence shows that the group providing some (the majority?) funding to the buyers is pretty closely related to USAA's CRE investment group, and they're generally in the 'long term hold' business not 'paint and flip'. Thus I would discount the idea that the building is changing modes any time soon. On the other hand, given the time deals take, this may have looked like a better flip project when the market was hotter and the deal was being worked out.

(and as background: doing some math on the totals provided in the news, A&E picked up 140 at an average price/unit of $751.4k, and the 160 transaction in August was @ $912k/unit. Their purchases in Qns of mostly rent-stabilized units earlier in the year was about $205.4k/unit. Cap rate specialists can discuss amongst themselves. Account for differences in int. rates, locations, and general quality. Please show your work.

Aaron, Thank you for the insight on condo pricing. I think this 140 with nice high-end updated finishes (call it $200 per sq ft) may do $1500 per sq ft as the ceilings are fairly low and there are no floor to ceiling windows vs the new condo developments. 140 seems to be inferior to 200 Riverside which is what I am using as a comp. $1500 Less selling expenses and taxes will be $1400 less 20% carry on $1100, condo plan fees, and management cost, if building is kept mostly vacant during reno = $1150. So tight spread. I think the project works if they keep renovate and sell condos floor by floor while keeping the other part rental as it will reduce carry.

https://streeteasy.com/building/200-riverside-boulevard-new_york

Perhaps, they can just squeeze reno to $150 per sq ft with updated baths, kitchens and new flooring. No structural changes or electrical upgrades.

"Perhaps, they can just squeeze reno to $150 per sq ft "

I just wonder if the new owners care about conversions (or are permitted to convert). They might be content to hold the property and collect a reasonably nice cash flow (consider how long NY Life held Manhattan House).

HSTPA of 2019 made conversions more difficult and the number dropped 80%
https://therealdeal.com/2021/05/13/rental-to-condo-conversions-drop-80-after-2019-rent-law-report/amp/

@30 - thanks for the link, I didn't realize how insane that part of the law was

The report attributes the steep drop-off to the new law, which stipulates that 51 percent of tenants in a rental building must agree to buy their unit for a conversion to take place. Before June 2019, the required threshold was just 15 percent of tenants, or so-called “insiders.”

The odds that 51% of the renters in a given building are even at the point of their lives where they are interested in buying, can afford to buy, want to own a unit of the exact size & location they currently rent.. are very very low. A developer would have to hand out a lot of free money to get 51% buy-in.

30, I hadn’t realized the conversion limit had increased to 50 percent. So I guess A&E has to keep the building vacant which makes condo conversion more costly and less likely.

In the meantime, do people believe the article from NYPost on strong pricing for multi-family on a forward looking basis after the rates have gone up? Of course, if mortgage taken out a lower rate with enough time remaining can be reassigned, free market multi family prices can have stability.

https://nypost.com/2022/10/29/why-nycs-multifamily-market-just-keeps-getting-hotter/

It's an interesting contrast to all the multi-family landlords currently holding almost 90,000 vacant Rent Stabilized apartments hostage attempting to overturn legally enacted rent regulations. They are crying poverty about how they are being sent to the poor house while willingly foregoing about $1.6 billion in annual income. Using stripper math accounting to try and claim the lose money if they rent the units. Lying about costs of renovations and that they need to gut all units due to lead paint law (refuted by lead paint experts).

But apparently when it comes to selling their buildings things couldn't be rosier.

Regarding conversions people forget how steep discounts tenants got for their insider prices. We (and many others) had entire businesses of buying "Insider's Rights" and then flipping the units at a profit. It's only recently that the concept of insiders getting substantial discounts has gotten painted as unconscionable. But just like with RS the pendulum is swinging back the other way and building owners are apoplectic that their "rights" to windfall profits are being chipped away. Wait until they find out you can actually lose money on Real Estate.

Side note: I've been battling on social media over these warehoused units. When posters have been bellyaching about how much money they are losing due to RS I have offered to buy their buildings for what they paid just to antagonize them. Boy does that work! And their true colors come out.

Recently I got into it with someone who I suspect is the owner of the building on 14th St & 7th Ave with the emergency vacate order due to the basement wall collapse who was bitching about the evil tenants.

30 is that the Southwest corner? I forgot to look at that.

Donut Pub.

Hey 30, any info on the building on the east side of 8th ave between 14th and 15th?

I remember Sandy knocked down the half the front facade and was torn down.

Its gotta be a dead lot going on 10 years now. I realize somewhere along the line original owner took an insurance check for the property, but someone has to own it now, paying/owing property taxes for a decade .

It's amazing there were no reported injuries given how much of the facade fell off.

It was illegally being operated as a hotel.

On that particular 8th Ave lot (block 764/ lot 75 for those playing along): Interesting that the market value history has steadily decreased over the last few years. (don't know how to show the assessed value, but assume there's a relationship). What element of the tax methodology lets it steadily decrease? Is Chelsea a 'has been' neighborhood?

Actually a good number of commercial properties have seen Market Value decreases recently. Valuations on all property classes have been all over the place. But don't confuse Market Value numbers with AV, or even taxes which can still go up even if assessed values go down. "Everyone" acknowledges the system needs fixing but "everyone" also thinks that their own personal tax bill should go down and that's not going to happen. For any revamp of the system a lot of homeowners in neighborhoods where property values have soared would see very large increases.

Aaron, 92 8th ave is a vacant lot. City just uses some type of average sale prices for recent vacant land sales and there are not that many of those. So the input data is limited and results are iffy. But I do find it interesting that valuation of the vacant land continued to go down which actually may be true as 2017 was peak in finished sale price and land values could have peaked before that. Since there are not that many vacant lots in the city, the city probably does not care much about the valuation of a vacant lot. This is likely no reflection on Chelsea coop/condo Market values as the determined by the city for tax purposes which I am sure continued to increase as the city figures a way out to get more revenues.

8th Ave has lost much of its former polish.

Did it ever really have much polish?

Agreed, the polish was a facade created by the booming economic / quality of life improvements that were city wide.

The corner building is interesting to. Former Commerical tenant HSBC now Citizens Bank.
THis building is overbuilt by a mile, built to 185,000 sq ft , air rights showing as (-) negative 127,000 sq ft.
Grandfathered before code in place obviously but how's that work if a hurricane takes it down?
Are you allowed to re-overbuild it back?

{How'd we end up so far away from 140 Riverside lol?}

@300 @ 30: Thanks for the insights. I was mostly trying to figure out what the annual costs are on a paid for vacant lot (taxes, +??). Wondering how much it costs to effectively warehouse a space like that. and given that block/area, what would be the future development plan.

The corner building was a monster when it was built in 1929-30 (following the setback rules of 1916). Built for Vincent Astor's investment banking firm. (And given how they were built then, probably not coming down in a hurricane.) Shame that the ground floors look so ratty now.

https://www.villagepreservation.org/2018/05/22/a-stroll-down-west-14th-street-commerce-and-industry/

@truth: We've moved downtown because the light's so much brighter there, and we can forget all our troubles, forget all our cares...

About a year ago we moved out office from 2nd floor above Hollywood Diner on 16th Street & 6th Ave to a storefront on 17th Street between 8th & 9th. Walking down 8th Avenue is scarier than I remember at any point in time back to the 1970s and if I'm ever in the office alone I make sure the door is locked.

Agreed Aaron, it would take way more than a hurricane

"we can forget all our troubles, forget all our cares..."

.....and everybody knows your name and glad you came? :)

Ha. I had to google the phrase and listened to be wonderful song. Thank you.

Come on 300! Petula Clark!!! Lol

I really never heard it before given my limited knowledge of music.

And even though they are so melodically different, the vibe of the lyrics always reminds me of the theme song to Cheers.

It was a big hit in its time. 8th ave was hot for a while in the '90's and up to the crash. It had a lively restaurant row scene going on at that time.

Right! I'm looking for... Someone who is just like me and needs a gentle hand to guide them along.

British songwriter Tony Hatch said, about the song: "’Downtown’ was written on the occasion of my first visit to New York. I was staying at a hotel on Central Park and I wandered down to Broadway and to Times Square and, naively, I thought I was downtown. Forgetting that in New York especially downtown is a lot further downtown getting on towards Battery Park. I loved the whole atmosphere there and the song came to me very, very quickly. "

Actually you're right about that stache. I think that was even late '80s that 8th Avenue had a handful of lively restaurants. I remember there was an Italian one that was quite good,

Now there are 2 unlicensed cannabis dispensaries a block apart around the corner from my office. I don't think there are any less restaurants.

https://newyorkyimby.com/2015/04/revealed-92-eighth-avenue-new-chelsea-apartment-building-replacing-sandy-damaged-structure.html

Nice find 30
Article is from 2015. That was a good time to debvelop a project like this.
I wonder what killed it