Co-op and condo boards balance budgets with extras

<i>Co-op and condo boards rent roof decks, build storage spaces to keep monthly charges in line</i>


The Atelier rents out its roof deck for $5,000 to $10,000. The extra income has helped it reduce common charges.
The Atelier rents out its roof deck for $5,000 to $10,000. The extra income has helped it reduce common charges.

It might be the real estate equivalent of coupon clipping or small-time political fundraising: Many condo and co-op boards in New York are keeping a sharp eye out for creative ways to trim their common charges and bring in extra revenue for their buildings.

The strategies run the gamut from hosting photo shoots to scaling back on electrical usage, but the goal of improving the building’s finances is always the same.

For example, the Atelier, a 478-unit condo at 635 West 42nd Street, is renting out its Sky Lounge roof deck year-round for private parties. Hillary Clinton and Lindsay Lohan have each already rented out the space, according to Dan Neiditch, the president of the building’s condo board.

The building makes the space available once a week at rates of $5,000 to $10,000 and rents the space out a few times a month, Neiditch said. The revenue has helped the building lower its common charges by 10 percent, said Neiditch, who is also the president of River 2 River Realty.

In addition, the building constructed 40 storage spaces to rent to residents, which bring in an additional $40,000 a year in income (the spaces rent for a two-year minimum at $1,000 each). It also added a 100-unit bike room, with each spot going for $250 — and all the spaces are rented.

“We might lower common charges again next year; we’ll see how it goes,” said Neiditch.

Other condos are using similar approaches to raise cash. The Beacon, a 10-building Art Deco condominium complex in Jersey City, has used one of its unrestored buildings as a site for photo, movie, commercial and music video shoots. In the past, the Beacon has hosted musical acts such as the Pussycat Dolls, Avril Lavigne and others. Its latest booking was a Vogue cover shoot in January with Sarah Jessica Parker.

Though the revenue only goes to supplement the condo association’s revenue, “in an environment where operational costs are increasing, this is helpful,” said the Beacon’s developer, George Filopoulos, president of Metrovest Equities. Filopoulos did not disclose how much the building charges for each shoot, but he said that common charges have remained the same for the past three years.

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Andrew Barrocas, chief operating officer of the Real Estate Group New York, said if a buyer can save money on the common charges, then the sale price seems more desirable.

“Higher-than-normal common charges deter some buyers, and from a developer’s standpoint, it’s to their advantage to have common charges at par or below par,” he said.

The 37-unit condo called 96 Rockwell in Fort Greene, Brooklyn, which has been open for about six months, switched management teams early on when the board realized that the building’s energy consumption seemed high. Sponsor Joshua Landau said 96 Rockwell has lowered its common charges from $1 per square foot to 85 cents per square foot.

“Energy consumption as compared with the projections in the offering have been substantially lower due to our new management team,” said Landau.

In addition to raising money, the Atelier has also found ways to cut costs. The building trained its in-house staff to do tasks that had previously been outsourced, such as cleaning windows in the lobby, and bought a machine that the staff uses to shampoo rugs and clean the lobby’s floors, a task which previously cost the building $60,000 a year when it was done by an outside vendor.

Even older buildings can revamp spending and income to lower common charges.

Seth Hirschhorn — a sales manager for Citi Habitats and former president of his Upper East Side building’s co-op board — said the shareholders of his 125-unit building, which was constructed in 1958, voted to raise the flip tax from $5 to $10 per co-op share a little over a year ago.

Doing so will help to offset maintenance increases “every year moving forward,” said Hirschhorn. “The average apartment has 350 shares. Multiplied times five, that’s a difference of $1,750. If we have 20 sales we generate an extra $35,000 for the building.”

The co-op also converted what was formerly a boiler room into bicycle storage space that can be rented by tenants.