Rebounding from a few tough years during the economic downturn, New York City condo conversions are making a comeback. Although looked at with disdain by architectural critics, the practice of converting white-brick prewar rental buildings into luxury condos has become quite common.
Conversions have been happening all over the city, including Harlem, Times Square, Dumbo, the Upper East Side and even on Park Avenue. According to the New York State Attorney General’s office, there has been a rise so far this year in the number of plans filed. This office is responsible for signing off on all condo conversion plans.
A reason for this jump is that the time it takes to rehab an existing building, as opposed to building a new structure on raw land, is significantly shorter. This shorter turn-around allows for the quickest financial returns. It takes approximately two to three years to complete a conversion, as opposed to four to seven years for a ground up development. And it’s not just rental buildings that are being converted, office buildings are also becoming subjected to this fate. A planned office conversion is underway at 93 Worth, a 165,000 square foot office building located Downtown.
Part 23 is the state regulation that governs condo conversions, and filings cannot move forward until at least 15 percent of a building’s available units have been sold and those residents plan to move within the next 15 months.
Developers and investors are becoming increasingly interested in properties that can easily be converted to condos. A driving reason is that financing for new construction is more difficult to obtain than financing for conversions. In addition, demand for condo units has gone up since the economy has began to heal. There’s a backlog of people that were waiting out the downturn who are now ready to invest in a condo.
Experts predict that the demand for conversions will continue to grow for at least a few more years, as risks associated with building new developments remain high.
A conversion that recently got underway at 530 Park Avenue is a 19 story building designed by the famed George Pelham, Jr. It is being converted into 116 high end condos, which are listed at $3,250 per square foot on average. $70 million is being invested to renovate the building.
Not far from 530 Park is another conversion at Manhattan House. This building, located between Second and Third Avenues and East 65th and East 66th Streets, will be transformed from 583 rental units into 475 high-end condos. Renovations include adding new plaster moldings, enlarging windows, adding libraries and decorative iron railings and increasing ceiling height. It is currently 40 percent sold.
Astonishing, for a building that the Landmarks Preservation Commission once said was responsible for the general decline in apartment house design. It is now on the short list of options for people with excellent taste and money to spend.
At 1212 Fifth Avenue, a 16 story prewar rental building is being converted to condos. Prices for these units range from $735,000 to $7.99 million.
Regardless of your feelings about these types of condo conversions, one thing is clear – they are here to stay.