Thinking of buying a tax abated NYC apt?

I am constantly searching for apartments for clients and occasionally come across buildings that are tax abated. Generally speaking apartments above 96th street had 20-25 year tax abatements and below 96th street the length of the abatement was only 10 years. As a result, in the last several years, the abatement is phased out, and the taxes go up substantially.

When the monthly numbers are lower, buyers will pay more for the apartment which helps developers of new condos make more profits. But how do you analyze the value of a condo with a tax abatement expiring shortly and how much time is enough that is left on a tax abatement?

Let’s look at an example of a well known building on the west side- The Atelier which is located at 635 W 42nd street. This building has 1 year left on its abatement. Note the below table and all numbers are monthly taxes and for a certain unit with about 800 sqft(75m2)

2016 $600
2014 $400
2012 $200
2010 $28
2017 ???

As a result, and after looking at this example, I would not recommend buying into a tax abated building with less than 5 years left on the abatement unless you are fully aware of the risks associated with purchasing and factor that into your offer. Additionally, think of the tax abatement like the wind that pushes the sailboat either forward or in the case of headwind stops you in terms of appreciation. If you are buying at this time when the market is close to a peak, and you buy in a building with an expiring tax abatement, you may take a loss to sell if you need to liquidate in less than 5 years.

Here’s another example- 100 Riverside boulevard aka The Avery is an amenity rich building located at 100 Riverside boulevard right in front of Riverside Park. See the below example of the monthly taxes of an apartment with slightly more than 1000 sqft (92m2), and  2bd/2ba.

2016 $1000
2015 $680
2014 $374
2009 $200
2019 $1700 or more?

Accordingly, the taxes would be $21,000 or $1700 per month without the tax abatement. So an apartment with 1000 sqft 2bd/2ba, $1100 in common charges plus $1700 in taxes for a total of $2800 is going to be a tough sale if you need to sell soon.  As a result, said apartment has stayed on the market for more than 4 months with the current broker and in 2014 was on the market with another broker for 8 months. despite the current ask being a reasonable $1500 per sqft.

Based on these numbers, what do you think? Does it make sense to purchase in a Manhattan condo with less than 5 years left on its tax abatement? How much would you adjust the price for the expiring abatement if you are selling?

 

Thinking of buying a Manhattan new construction condo?

With new construction condos above $4 million already in a balanced market, now may be the time to make your purchase. Let’s assume you have decided to pull the trigger on a condo purchase in a new or converted building in Manhattan what should you look for? Here’s a checklist. Continue reading Thinking of buying a Manhattan new construction condo?

Central Park’s North Woods work being done

The North woods, the area around the Pool (aka the Lake) inside Central Park, in the West 100’s,  is getting some work completed. It appears that a grant has been given to do some restoration and infrastructure improvements as per the signage. About 2 weeks ago a fence went up and for a day or two a dark windscreen was up as well. The windscreen was removed but the fence remains. This is the area frequently photographed by residents and tourists alike.

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The North woods seen during a winter snowstorm in 2016
The North woods seen during a winter snowstorm in 2016

 

 

Free Wi-Fi replaces NYC payphones

LinkNYC is in the process of replacing 7500 pay phones across the 5 boroughs with Free Wi-Fi stations that will have a tablet for internet browsing, free superfast Wi-Fi and a vonage app for placing free calls.

It is now in the Beta stage and I saw this one on the Upper West side on Broadway near West 79th street.

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