Samson Management, the owner of 905 West End Avenue, is offering short-term seller financing to help boost sales at the boutique condo conversion.
The company is temporarily allowing buyers to borrow up to 90 percent of the purchase price over seven years, at an interest rate of 4.875 percent.
Brokers at Halstead Property said the financing will help save hundreds of thousands of dollars compared with a traditional down payment.
“This is for people who recognize there are going to be a few hiccups and volatility in their assets and [don't want to] to put 35 percent down on a $4 million apartment,” said executive vice president Louise Phillips Forbes, who is leading sales at the property.
The offer comes at a time when commercial lenders have tightened underwriting standards on residential real estate, particularly super jumbo loans that exceed standards set by Fannie Mae and Freddie Mac. The agencies will not guarantee loans exceeding $729,000, which means banks cannot sell most luxury apartment loans on the secondary market.
Jonathan Miller, president of appraisal firm Miller Samuel., told The Real Deal that developers in newly converted buildings would likely have to consider seller financing to overcome tighter lending standards. Banks are increasingly looking for sponsors to sell more than half of their available units before financing apartments in condo conversions or newly constructed buildings.
“It would seem to me that some of the deeper pocketed sponsors in some of the new conversions would look at seller financing to get over that threshold,” said Miller.
Samson bought the building from the Nagel family in 2006 for $45.5 million, according to records filed with the city Department of Finance. The 13-story pre-war building overlooks Riverside Park and a majority of the buildings current occupants are rent stabilized.
The company, which owns about 7,000 apartment units in New York, operates with a traditional buy, own and hold strategy, Forbes said, and the building carries no debt. Forbes therefore argues that there is no pressure from lenders demanding quick sales.
After launching sales in April, Halstead originally offered buyers an option of buying existing apartments as is for $1.87 million or renovated units at $2.02 million.
But, current asking prices range from $1.7 million to for a 1,636 square-foot two bedroom unit to $3.5 million for a 2,290 square-foot four bedroom apartment, according to StreetEasy.
Forbes said the building, which has 53 units and is located at the corner of 104th Street, is attracting many buyers from the arts community who have been priced out of Greenwich Village and other nearby submarkets. She said she has three signed contracts, four contracts out for review and is negotiating deals with another 18 buyers.
“Because of my financing people that are living below 14th Street are saying here is my opportunity,” said Forbes.
Forbes said she expects closings will begin in March 2009.