Co-ops get creative as fees climb

August 31, 2013 06:00PM

Co-op and condo buyers beware: maintenance fees are going up. With the contract for building service staff workers up for renegotiation and real estate taxes that are continuing to climb 5 to 12 percent annually, management companies have little choice but to raise fees in next year’s budgets.

And these inevitable increases are pushing buildings to cut costs, Aaron Shmulewitz, head of the co-op and condo practice at the law firm Belkin Burden Wenig & Goldman told the New York Times.

“Some unsophisticated people will say, ‘Let’s not have fresh flowers in the lobby, let’s not iron the doorman’s uniform so much, let’s cut the Christmas party,’ ” Shmulewitz said “So maybe maintenance will go up only 4 1/2 percent instead of 5 percent.”

But other – more “sophisticated” – buildings are getting creative. One way buildings are becoming more efficient is by monetizing every inch of unused space. For instance, 49 West 72nd Street, a prewar co-op, was able to sell back a superfluous third flight of steps to expansion hungry shareholders – a net gain of approximately 50 square feet.

Other spaces being monetized include: the backs of common halls, slivers of rooftop that can be added to penthouses, and equipment rooms. And as The Real Deal previously reported, these kinds of tricks seems to be working. For instance, common charges at Downtown by Philippe Stark at 15 Broad Street are just 92 cents per square foot, yet the building has been able to maintain top-notch services that include a doorman, a concierge, A Fitness Center And A Roof Terrace. [NYT]Christopher Cameron