Buyers reject historic NYC co-ops

Sotheby’s Nikki Field with 740 Park Avenue (Sotheby’s International Realty, Google Maps, Getty)

Once harboring near-mythical status in New York, legendary co-ops are shunned by luxury shoppers.

Trophy Co-ops Are Languishing In The Market And Selling At Deep Discounts, Curbed reported. Affluent buyers are turning to condominiums instead, which offer cooler amenities and less archaic barriers to entry.

Sales at 740 Park Avenue illustrate the trend. Julia Koch has been try in vain sell his apartment for $60 million. Steve Mnuchin, the former Treasury secretary, sold his spot for $22.5 million after 12 years of shopping and a $15 million discount from his original slate.

Former Merill Lynch executive John Thain spent four years trying to sell his duplex and has now listed it for the same price he bought it 16 years ago.

The building is not alone in its struggles, however. Other co-ops on Park, Fifth, Sutton and Beekman Places see similar trends working against them.

“In the past, big money needed co-ops to be accepted and established,” Sotheby’s International Realty broker Nikki Field told the publication. “But nobody needs 740 anymore.”

There are several factors that hold back cooperatives. Many don’t allow or cap financing, which makes it harder for people to buy. Condo buyers can also protect their identities — and many do, by using LLCs to mask their purchases — while co-ops require various financial disclosures and can reject applicants for no reason.

The ability of co-op boards to turn down candidates has attracted accusations of discrimination. Qualified buyers can be rejected for any reason or no reason at all, creating an exclusivity factor that once worked in their favor but is now attracting backlash.

Co-ops also tend to restrict how apartments are used. Renovations are harder to do in co-ops, which can veto even the simplest changes to an apartment.

Since the financial crash of 2008, condominiums have replaced co-ops as the place of choice for the city’s wealthy. Buildings such as 220 Central Park South, One57, and 15 Central Park West have features similar to the co-ops of yesteryear, but without the hurdles buyers must navigate.

That said, co-ops can still fetch a premium, and condominiums can still face their own issues, such as the structural nightmares allegedly robbed 432 Park Avenue. But as co-ops and their boards continue to resist widespread change, their status as some of the city’s most prestigious properties will continue to diminish.

—Holden Walter-Warner

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