search

The Real Deal Logo

Trending

Musklandia: Tesla divorces gigafactory land from city of AustinMusklandia: Tesla divorces gigafactory land from city of AustinHousing deal finally passes; here are the detailsHousing deal finally passes; here are the detailsNew York developer loses 1-year-old D.C. multifamily complexNew York developer loses 1-year-old D.C. multifamily complexLawmakers reach sweeping housing deal with “good cause eviction,” new 421aLawmakers reach sweeping housing deal with “good cause eviction,” new 421a
Commercial
New York

Naftali files plans for UES building. Smart money’s on condos

Developer said without 421a tax abatement, rentals don’t pencil out

Naftali's Miki Naftali with 255 East 77th Street (Naftali Group, Google Maps)
Naftali's Miki Naftali with 255 East 77th Street (Naftali Group, Google Maps)

Another Naftali Group building is coming to the Upper East Side. Chances are it’s a condominium.

The developer modified its plans Monday to construct a mixed-use building at 255 East 77th Street, city records show. PincusCo reported the initial filing early this month.

The residential building will rise 36 stories, according to the development tracker Bldup, and include 55 units and over 3,600 square feet of ground-floor retail space.

Read more

The plans do not specify whether those 55 apartments will be condos or rentals, and Miki Naftali did not respond to a request for comment on what he has planned. However, the expiration of property tax break 421a suggests units will be marketed for sale, as condominiums will pay significantly less property tax than future rentals.

Since the 25-year tax abatement expired in June, industry experts have forecast that developers won’t be able to make the financials work for most rentals. Instead, they’ll be forced to pick between fully subsidized affordable rentals or market-rate condos.

Sign Up for the undefined Newsletter

Naftali has a penchant for the latter. Each of the developer’s buildings on the Upper East Side has been a luxury condominium: The Bellemont, The Benson and the soon-to-be-completed 200 East 83rd.

And Naftali’s architect of choice offers further evidence for a condominium to come.

Building permits list Hill West Architects as the designer behind 255 East 77th Street. Naftali also tapped the firm to plan Williamsburg’s 470 Kent Avenue, a massive two-building rental project turned condominium on the heels of 421a’s expiration.

During The Real Deal’s May showcase, Naftali said his firm had planned to set aside 30 percent of units built during 470 Kent’s second phase of construction as affordable. But without the tax break, that project didn’t pencil out.

“What other choice do we have?” Naftali said during the event.

As of mid-September, an offering plan for 255 East 77th Street had not yet been filed with the state attorney general’s office.

Tags
421aCondominiumsDevelopmentMiki NaftaliNaftali Group