Home assurance options, tuition credit spur interest in Riverdale new development

By James Kelly | June 29, 2009 10:38PM

Sales at new condo developments in Riverdale have been slowly sputtering along since the boom in 2006. But now, after introducing a few more options and incentives to potential buyers, two of the neighborhood’s projects — Arc Development’s Solaria Riverdale and Q-Real Estate Partners’ Latitude — have seen a recent increase in interest.

Since introducing two new incentives — free home assurance and a tuition credit — in April, six of Solaria’s units have gone into contract. Also, over the past two months Solaria has rented four other units.

The project, at 640 West 237th Street, still has a long way to go, however, because it only has 10 closed deals, 10 in contract (including the six since April), and the four being rented, out of the 64 units in the building, since sales began in 2006.

The units have generally leased for a one-year term, with six months worth of rental payments available for use towards a down payment for the unit after the lease expires.

“It’s really for people who are qualified buyers, but not sure whether or not they want to live in Riverdale,” said a spokesperson for Arc Marketing who asked not to be identified. Arc Marketing, an affiliate of the project’s sponsor, is the exclusive marketing and sales broker for the project.

Meanwhile, Latitude, a lower-priced condo targeting first-time buyers at 3585 Greystone Avenue, has seen increased interest from buyers after recently changing the whole building over to rent-to-own. Sales there began in late 2007.

Slow sales throughout the ‘hood

Despite the sales pitch of a less-than-half-hour commute to Manhattan, it seems buyers have been hesitant to close at any of the area’s new developments.  

Riverdale Court, at 3751 Riverdale Avenue, has three units in contract out of 10, but no units have closed since sales began in December of 2006, according to Linda Solomon, the Halstead Property broker who is handling sales for the project.

Riverstone Condo, at 3220 Arlington Avenue, has sold 50 percent of its 26 units since sales began in July 2007, said Amela Kadric, sales manager for Sotheby’s International Realty who is handling its sales.

These projects are lingering on the market at a time when condo resales in the area are slowing drastically and prices are falling.  

In the first four months of 2009, there were only five condo unit sales in zip codes 10471 and 10463, an area including Riverdale and neighboring Kingsbridge and Marble Hill, according to research firm GeoData Plus. They were sold at a median price of $325,000. Over the same period in 2008, there were 19 sales at a median price of $690,000.

Home assurance and tuition credit pique interest

With Solaria’s home assurance offers, the sponsor has been willing to negotiate an agreement where it would cover some of a buyer’s mortgage payments and maintenance fees in the event that they lose their job during a period of time — almost up to a year — after closing. In other cases the developer has offered to cover part or all of the cost of tuition for nearby private schools for the children of buyers.

Active listings at Solaria include one-, two- and three-bedrooms ranging from $770,000 to $1.245 million, according to Streeteasy.com. The Solaria’s prices are not inexpensive for the area. The building had six of the top 10 most expensive Bronx condos on the market last year, according to a September 2008 article in The Real Deal.

Marketing Directors first handled sales and marketing at the building when it hit the market it 2006, and Arc took over the job in August 2008. Sales remained slow there, however, until the introduction of incentives in April.

Turning rent-to-own to secure buyer financing

Over at Latitude, a rent-to-own program was launched for the whole building in mid-April, and since then, the building has received more offers, said Robert Quaco, principal of Q-Real Estate, the developer.

A major reason for the program’s implementation is that the developer’s preferred lender on the project, Bank of America, will not give buyers financing until 70 percent of the units are in contract.

Currently, eight of the building’s 53 units are in contract, or around 15 percent, said Jessie Torres, a sales agent at Atlantic Realty Partners, the sales and marketing agent for Latitude.  

While Q-Realty initially offered the rent-to-own program only for a two-year lease, around June 1 it began offering them for a one-year term, awarding the same total rent credit. This effectively doubles the percentage of rent that goes towards a buyer’s purchase. The average total rent credit at the end of a lease on a two-bedroom is $24,000. Rents start at $2,000 for a one-bedroom and $2,700 for a two-bedroom, and top out at $4,500 for a three-bedroom.

Units at the Latitude range from around $475,000 to $575,000; 80 percent of them are two-bedrooms.