In yet another indication of the searing heat of the city’s residential market, developers are making bids to buy out supermajorities of co-op shareholders, collapsing the cooperatives and opening the way for conversions.
At Buildings Like 253 West 28th Street in Chelsea and 150 East 78th Street and 1025 Park Avenue on the Upper East Side, developers aim to accumulate a large proportion of co-op shares, usually 75 percent, which triggers an automatic rental conversion of the remaining units.
The targets for these maneuvers are often small buildings in popular neighborhoods, with unused air rights and lucrative retail spaces on the ground floor, the New York Times reported.
Stuart Saft, a lawyer at Holland & Knight, said the preferred approach for developers is to buy the physical building from the co-op. Buying up shares leads to higher tax payments for developers down the road, when the building is converted and the condos are sold. [NYT] – Ariel Stulberg