Co-ops ease restrictions on LLCs

TRD New York /
Apr.April 10, 2012 01:30 PM

Co-ops are finally descending from their perch above the reality of the New York City real estate industry and are reducing restrictions on buyers into their tightly held communities. According to Habitat magazine, more co-ops are reversing previous policies and allowing LLCs and family estates to buy units in buildings in an effort to remain attractive to buyers as the price of real estate soars in the city.

In the past, co-ops resisted those ownership structures for two reasons: a corporate buyer might use it as a pied-a-terre and diminish the sense of communtiy the co-op covets, and the entities are harder to hold responsible for unpaid maintenance or damage fees.

But as the price of co-ops has grown 89 percent in the last decade, the type of buyers snapping up co-op shares has changed. They are often celebrities or other people who possess enormous wealth and want anonymity and can benefit from a reduced risk of a residency audit for tax purposes. Still, the co-op boards often require a point person for an entity who can be immediately contacted in the case of damages or unpaid fees.

“It’s a reflection of the changing times,” said Siim Hanja, a senior vice president at Brown Harris Stevens. “It’s not another artist who moves in when someone retires and moves upstate. It’s someone from Italy with $100 million net worth.” [Habitat Mag]

Related Articles

110 Central Park South and Aleksandra Melnichenko (Credit: Google Maps and Getty Images)

Who’s buying what? Here are our top luxe resi sales

Lee Radziwill and her home at 160 East 72nd Street (Credit: Getty Images, Brown Harris Stevens)

Longtime home of Lee Radziwill, sister to Jackie O., sells for $4M

993 Fifth Avenue and Gilbert Harrison (Credit: Google Maps and GLC)

Retail exec sells Fifth Avenue co-op to Chanel heir for $19M

New York City co-operatives are increasingly adding new amenities to their buildings. From left: Trump Plaza, The Carlton Regency and The Dakota (Credit: Wikipedia, StreetEasy, iStock)

Keeping up with condos: How co-ops are closing the amenity gap

Princess Firyal of Jordan and 795 Fifth Avenue (Credit: Princess Firyal, Google Maps, and StreetEasy)

Duplex at the Pierre hits the market again, asking $60M

Former Bear Stearns CEO Jimmy Cayne and 510 Park Avenue (Credit: Getty Images and Google Maps)

Ex-Bear Stearns CEO James Cayne demands co-op records after board rejects 3 buyers

Clockwise from left: John D. Rockefeller, Izzy Englander, Steven Mnuchin, David Koch, Jacqueline Bouvier, and William Zeckendorf (Credit: Getty Images and StreetEasy)

For 15 years, David Koch lived at the world’s “richest building”

740 Park Avenue and William Lie Zeckendorf (Credit: Wikipedia and Getty Images)

Zeckendorf sells co-op at 740 Park Ave for $29.5 million