The number of residential projects being developed as condominiums or cooperatives in Manhattan will remain low for the foreseeable future, new figures obtained from the New York State Attorney General’s office show.
Offering plans that were either submitted to or accepted by the attorney general’s office in the first quarter of 2010 were down by more than two-thirds from the same period two years ago, meaning the number of condo projects going forward will be just a fraction of those during the run-up of the market before the credit collapse.
Sponsors submitted fewer than a dozen offering plans in the first quarter of 2010, down 74 percent from 45 in the first quarter of 2008, and just nine plans were accepted in the first quarter, down 67 percent from the 27 accepted in the first three months of 2008, data obtained through a state Freedom of Information Law request revealed. The information did not include the number of plans that were rejected or withdrawn.
The attorney general, by statute, reviews condo and co-op offering plans, the highly detailed documents that reveal facts about the projects such as development financing and future operating procedures, as a measure of public oversight for buyers.
The sharp decline in both submissions and acceptances began in the fall of 2008, at about the time of the collapse of Lehman Brothers, the figures show.
“The drop in activity is reflective of the reduction in demand due to the restrained mortgage financing environment for new development buyers,” appraiser Jonathan Miller, president and CEO of Miller Samuel, said in an e-mail. “Lenders continue to be wary of the existing oversupply of shadow inventory of already built condominium units that have stalled or are slow to be absorbed.”
Several plans accepted recently include the seven-unit condominium at 949 Park Avenue in February, built on a 20-foot wide plot between 81st and 82nd streets; and the 57-unit 36 Gramercy Park East Condominium at 36 Gramercy Park East, accepted in March.
Of the eight projects that were submitted to the attorney general’s office in March four were sponsored by the city New York Department of Housing Preservation and Development, as projects to maintain affordable housing. The largest condo plan submitted in March was for an 84-unit newly constructed residential building at 305 West 16th Street, also known as 131 Eighth Avenue, being developed by Centaur Properties.
Real estate attorneys said it normally takes eight to 12 months for the attorney general to accept a plan. However, a review of the data suggests many of the plans submitted in early 2008 were never accepted.
The office of the attorney General did not respond to a request for comment on the data.
Eric Goidel, a partner with law firm Borah, Goldstein, Altschuler, Nahins & Goidel, said sponsors may have halted their plans as a result of the poor sales market.
“I can’t say with certainty, but it looks to me that a number of plans were abandoned or withdrawn,” he said. If so, the sponsor would have to resubmit the plan, he noted.
Goidel did not expect to see an uptick any time soon, because of the large amount of supply still available.
But Eva Talel, partner in the real estate group at Stroock & Stroock & Lavan and the chair of the New York City Bar Association’s committee on co-ops and condos, said there appeared to be more activity in the market.
“Anecdotally, it feels like more plans are being done,” she said.