gene_golub, Home Buyer in New York, NY

Why Battery Park City condos have lower prices?

Asked by gene_golub, New York, NY Sat May 19, 2012

Can somebody explain me why Battery Park City condos sell for much lower price then Financial District or other close to it neighborhoods? I see their maintenance is twice higher then in other buildings but 200k difference in price hardly justifies that.

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7
Jenet Levy’s answer
Hi, Gene.
Battery Park City is on land lease. That means that the buildings do not own the land they are on. This is very unusual for NYC. There is a section of the Upper East Side that has a few buildings like this and a few other scattered around the city, but it is not the norm. The monthly charges are quite high because each unit in these buidlings pays common charges and then PILOT, which is what they pay for real estate taxes as well as the land lease. Because of these unusually high monthly costs, the units sell for less than other comparable condos around the city. That is so the mortgage and common charges/PILOT together will be in line with what higher purchase prices and lower monthly costs come out to. Otherwise no one would ever buy there.
3 votes Thank Flag Link Sat May 19, 2012
Here is an interesting article about land leases. http://www.nytimes.com/1998/11/22/realestate/your-home-co-op…

--
Thank you!

DOM PASCUAL, J.D., ESQ.
ASSOCIATE REAL ESTATE BROKER
Demsker Realty
"Your Experts in NYC Luxury Apartments & Lofts"
304 Park Avenue South
New York, NY 10010
Cell: (631) 741-2764
E-mail: dompascual@gmail.com
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** All information contained herein does not constitute any warranties, offer or commitment or obligation of any sort and/or kind whatsoever and is subject to change, error, omission and/or withdrawal without prior notice. **
1 vote Thank Flag Link Sun May 20, 2012
Historically, the PILOT charges in Battery Park City have reduced the value of the Condos
However, this is starting to change
Remember, most of BPC s relatively new. When other new buildings are built in Manhattan, their common charges are discounted for the first few years. Many of those discounts are now expiring and their common charges are about the same as Battery Park city.
Since 9/11, the area has experienced a transformation. New stores, new condos, new transportation hubs. This is an area about to explode in value.
0 votes Thank Flag Link Fri Aug 30, 2013
Many buildings in the area are landlease buildings. That condition effects both pricing and carrying charges. Joyce Mincheff- The Corcoran Group
0 votes Thank Flag Link Sun May 20, 2012
I am an expert in the Battery Park City area.

Like many other properties in Battery Park City, the condos in Battery Park City don't own the land underneath the buildings. In this case, the buildings lease the land from the Battery Park City Authority, a public agency that was formed in the 1960s to develop the then-nascent neighborhood.

The land-rent fees get rolled into the monthly condo fees that owners pay. In Battery Park City, the current amount paid toward ground rents range from about $30 dollars a month to several hundred dollars per condo unit, depending on the building.

What sets the Battery Park City condos apart from other properties is how the ground rents were scheduled to rise over time. Most buildings with ground leases have long-term agreements spanning around 100 years with predicable price rises.


--
Thank you!

DOM PASCUAL, J.D., ESQ.
ASSOCIATE REAL ESTATE BROKER
Demsker Realty
"Your Experts in NYC Luxury Apartments & Lofts"
304 Park Avenue South
New York, NY 10010
Cell: (631) 741-2764
E-mail: dompascual@gmail.com
Manhattan Networking: http://cityamicus.com
Company Website: http://demskerrealty.com/
Blog: http://dompascual.wordpress.com/
Listings: http://dompascual.postlets.com/
Twitter: http://twitter.com/dompascualesq
Facebook Profiles: Dom Pascual; Manhattan Broker

** All information contained herein does not constitute any warranties, offer or commitment or obligation of any sort and/or kind whatsoever and is subject to change, error, omission and/or withdrawal without prior notice. **
0 votes Thank Flag Link Sun May 20, 2012
The land lease definitely justifies the large difference in price you're seeing. And Dom misspoke himself ( I think that's a typo) when he said most condos don't own the land they stand upon, actually by law condos are not permitted to even have a mortgage on the land itself.

Here's another thing I don't like about the Battery Park situation. In 2010, Fannie Mae temporarily stopped purchasing individual mortgages there (see the link below to the Crain's article). Too bad if you were trying to sell your apartment at that time!

Purchasing in BPC has disadvantages compared with other condos and the price incorporates that information. To me those lower prices are thoroughly justified.

Karla Harby
Licensed Real Estate Salesperson
Rutenberg Realty
New York, NY
kharby@crrnyc.com
212-688-1000x146
0 votes Thank Flag Link Sun May 20, 2012
Its further away from transportation, so the price is lower, perhaps they make up for it with the maintenance.
0 votes Thank Flag Link Sat May 19, 2012
Your reference to proximity to transportation is wrong.
There are about 8 subway lines, the Path line, and three ferry stations within a 5 minute walk from The Condos in Battery Park city. That is amongst the highest number of transportation links than almost any other part of NYC
Manhattan comes to a point at the south end. That means we have quik access to both esst and west sides of Manhattan.
There is. Huge new transportation hub being built at the WTC. Bonus is the station will be new and amongst the nicest in the city
Flag Fri Aug 30, 2013
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