The condo market is going South… Pacific.
Developer and building owner the Moinian Group has made it possible to buy a $1 million condominium with no cash down — and take a free round trip to Tahiti while waiting for the closing.
The perks are the result of a new agreement with American Express that allows the purchaser of a unit at the Atelier at 635 West 42nd Street to charge the down payment to an Amex card — and rack up the resulting reward points.
As long as a buyer replaces the cash in his or her account before the end of the first monthly period, the program is an opportunity to float the entire down payment for 20 to 30 days, while earning a reward points bonanza.
The points on a 20 percent down payment on a $1 million apartment will earn eight continental U.S. round trips in coach, four to Hawaii, three to Europe or two to Tahiti or Nairobi.
According to Angelo Kakolyris, an American Express representative with the company’s establishment services group, “Our cardmember base is obsessed with award points. Our mandate is to provide them as many ways as possible to use their card and redeem points.”
Buyers at the Atelier can apply their monthly maintenance charges to the card as well.
Along with the Related Companies, Moinian is one of the first building owners in New York City to allow tenants to charge their monthly rent to their Amex card. However, Moinian is the first to offer this incentive for a condo purchase.
The charge program can act as a kind of bridge loan for the down payment on the condominium.
Beyond the first month, of course, the finance charges that kick in can be much higher than a normal mortgage interest rate — up to 18.24 percent, depending on the terms of the particular card.
“That’s up to their own financial planning,” says Kakolyris.
Designed by Costas Kondylis, the Atelier offers 478 studio, one- and two-bedroom units at prices from $640,000 to $1.475 million. The building is scheduled for occupancy at the end of 2006.
The developer is also in talks with Amex to extend the program to the 280-unit Downtown Club at 20 West Street, but no agreement has been announced yet.
The Downtown Club, a conversion of the historic Art Deco skyscraper that housed the Downtown Athletic Club, offers studios from $450,000, one-bedrooms from $650,000 and lofts from $725,000.
The Moinian/Amex program comes at a point in the market where the pace of condo sales is slowing and inventory is increasing.
But Elad Dror, director of residential properties for the Moinian Group, insists that even though the program will set the company back 2 percent on down payments and monthly maintenance, it was not instituted because of any downturn in sales.
It’s an extra convenience for our buyers and residents,” he said.
American Express charges venders in most industries a transaction fee of 2.95 percent, but reduced the rate to around 2 percent for Moinian in an effort to break into the condominium market in New York City.