The Real Deal New York

Carnegie House residents bolting over Schron’s looming fees

The Midtown co-op doesn't own the land beneath it

August 27, 2015 11:02AM

Carnegie House at 100 West 57th, with Rubin Schon (inset)

Carnegie House at 100 West 57th, with Rubin Schron (inset)

An unusual ownership situation at Carnegie House in Midtown is undercutting prices and driving residents to sell in droves.

Shareholders of the 21-story co-op at 100 57th Street don’t own the land beneath the building, and must pay $4.1 million in rent to the investors who do, David Werner and Rubin Schron. In 2025, when the ground rent resets, that fee, set at 8.2 percent of land value, is set to jump fivefold or more.

The arrangement severely undercuts the value of apartments in the otherwise extravagantly-pricey neighborhood. Residents have begun to leave the building in anticipation of the change. According to StreetEasy, 49 of the 324 apartments at Carnegie house are now or will soon be on the market, Bloomberg reported.

Carnegie House’s board tried to buy the land last year, but was outbid by Werner and Schron. They paid $261 million for the 25,000-square-foot lot, the most for any land parcel in Manhattan in 2014, according to Real Capital Analytics.

A 450-square-foot studio is listed 21 percent below the Manhattan median for studio co-ops, priced at just $299,000. The priciest Carnegie House unit on the market is a three-bed unit with two terraces that’s listed for $1.35 million. [Bloomberg]Ariel Stulberg