Tuesday, February 24, 2009

Condo and Co-Op Crunch

As bad as the economy is, the worst is likely yet to come for those who live in condos and co-ops. Gothamist and Crain's are both reporting on skyrocketing maintenance fees for many Manhattan buildings, citing one Upper East Side co-op whose rates are shooting up 15%.

It is especially fierce in buildings that depend on retail and office rental income for their bottom line. Crain's notes:  "Ground-floor retail leases are major sources of revenue for many residential properties. For instance, such space in a building on Madison Avenue in the East 80s can fetch at least $300 a square foot. Retail rents can bring in millions of dollars, according to Faith Hope Consolo, chairman of Prudential Douglas Elliman's retail leasing and sales division."

With the retail vacancy rate in Manhattan closing in on 18%, the numbers look pretty grim there.

While there are advantages to buying in a depressed economy, condos and co-ops may be a really rough bet. Home-seekers may be better off renting for the time being. Who knows, maybe you can find your very own Greek temple.

No comments:

Post a Comment