Monday, May 12, 2014

Consider Both Sides In Land-Lease Deals

Question: I'm currently in the process of buying an apartment in a co-op building that has what's known as a land lease. The lease won't expire until 2058, but I know that my mortgage company needed to know when it expired because they would not give me a loan unless there were at least 10 years left on the lease. What exactly is a land lease, how common is it, and what are the possible detriments to buying an apartment in a building that has a land lease?
Emily, New York, N.Y.
Emily: A land-lease property is one in which the land beneath the building is owned by someone else. While such an arrangement can make buying a property a little more complicated and can in some cases reduce the unit's resale value, it's usually not a big problem, and it certainly isn't a reason to dismiss the transaction out of hand.
Although land-lease properties are relatively uncommon, they do pop up in some big cities, especially New York. Typically, they occur when a real-estate investor refuses to sell the land that a developer covets for a residential building. If the developer really likes the location, and can't find a good plot of land somewhere else, sometimes he or she will agree to a land-lease arrangement, paying to lease the land for a specified period -- like 50 or 99 years -- and then erecting the building. Land-lease arrangements are also known to occur when developers convert a rental property to an owner-occupied cooperative building, but the original owners refuse to sell the land.
There are downsides for people who want to buy units in these buildings. The properties are sometimes harder to finance and consequently harder to sell, possibly reducing their resale value. There also could be some extra costs involved in owning the units, as well as some negative tax implications.
But land-lease properties also have an upside: They're often discounted relative to other nearby properties, offsetting some or all of the risk and hassle involved in owning them. In some cases, that discount is tiny, but in other cases, it can be as high as 25%, real-estate agents say.
One reason for all the hassle is that someone has to pay for the lease on the land, and often, that cost is split up among the owners of all the units. In many cases, that monthly lease expense is tacked on to the maintenance fees that are being charged to individual unit owners.
Another weak point is that some lenders are afraid to extend credit for a land-lease property if the lease is likely to expire within a few years. Although it's extremely unlikely the landowner would refuse to renew the lease or decide to build something new on the site -- indeed, most leases are renegotiated in advance of the expiration -- lenders still worry about their collateral, and the owner could jack up the lease fee. That, in turn, would raise the unit owners' costs and possibly reduce the market value of the units.
Despite all that, if the land-lease arrangement has plenty of time before it expires -- say more than 20 years -- there's little reason not to dive in. Once some of the terms are worked out, "it's like any other purchase, and as long as you go into it with your eyes open," you should be fine, says Stephen Kotler, an executive vice president at Douglas Elliman, a New York-based real-estate brokerage. At the very least, you could be getting a bigger, nicer unit than you would have been able to afford otherwise.
If you're still antsy and want to learn more about the intricacies of land-lease deals, contact a real-estate agent who has experience in similar transactions. The leading New York City residential real-estate firms, including Douglas Elliman and The Corcoran Group, will have some agents on staff who know land-lease deals well.
By Patrick Barta, WSJ

Have you been thinking about selling your Real Estate? Now is the best time! Ask me about it.

Fernando Branco, GRI, ABR, CNE
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Tuesday, May 6, 2014

Priciest 551 West 21st Street pad comes with 61-foot pool

Priciest 551 West 21st Street pad comes with 61-foot pool

Renderings of 551 West 21st Street
Renderings of 551 West 21st Street

Gold-framed windows, storm-resistant design rounds out plush penthouse

The top penthouse at 551 West 21st Street comes with a rooftop pool and a $50 million price tag.
The Norman Foster-designed unit, which also boasts 4,000 square feet of outdoor space, is framed 
with gold windows, the New York Observer reported. Other high-end accoutrements in the 19-story 
building’s penthouse units, which start at $35 million, include double-sided wood-burning fireplaces, 
kitchens with Gaggenau barbecue and Teppanyaki grills, cooling and heating drawers, 12-foot 
ceilings, oak herringbone floors and free-standing bath tubs.
Developer Scott Resnick also decked out the building with a storm-resistant redesign following 
Hurricane Sandy.
The property’s other 41 units are priced between $5.75 million and $17.5 million, the Observer 

Apartment Features
Features: Washer/ Dryer; Layout: Penthouse; Full Floor; Rooms: Dressing Area; Kitchen: Chefs / Gourmet; Service Entrance; Stainless Steel Appliances; Bathroom: En Suite; Outdoor Space: Roof; Terrace; Pet Policy: Pets Allowed.
Building Features
Pool. Rooftop Deck.

Property Summary 
Soaring 250 feet above the Hudson River and downtown Manhattan, this extraordinary 6,265 SF home offers column-free interiors and breathtaking panoramic views in every direction, combining the grandeur of scale and proportion with exceptional craftsmanship and detail. 551 West 21st Street's uppermost penthouse includes direct elevator access to a stunning, 4,000 SF private rooftop garden with infrastructure for a sixty-one foot pool, two kitchens with gas grills, and immense areas for dining tables, lounge chairs, sofas and gliders- providing the perfect setting for grand-scale entertaining and dramatic sunrise-to-sunset views over the Hudson River and Manhattan. With infinite views from every corner, Penthouse A is without peer.

Occupying the entire 20th floor of 551 West 21st Street, this dramatic full floor mansion is defined by an unprecedented attention to detail and features classic layouts akin to those of a bygone era. Elegant and gracious vestibules with custom millwork and cove lighting lead to stately center galleries which delineate the entertaining rooms from the private quarters. Twelve foot ceilings, white oak herringbone floors and sets of nine foot high double doors with deep wood thresholds, immense corner grand and club rooms with sweeping views, a central, double-sided wood burning fireplace and a thirty-three foot long loggia off the living room facing the Riverare just some of the features of this exquisite home.

A majestic thirty-five foot corner dining room off the center library floats high above the Hudson river, inviting lively dinner parties and impressive entertaining. Luminous metal reveals throughout perfectly frame each window and provide perimeter seating for quiet contemplation and breathtaking views of the west side's ever-changing skies.

An eat-in chef's kitchen designed by Foster + Partners and produced by Molteni & C-Dada includes beveled Blanco de Macael marble countertops and backsplash, and naturally stained oak cabinetry. Top of the line appliances, including a Gaggenau cooktop, grill and Teppanyaki grill, Miele integrated coffee machine and warming drawers, and integrated wine cooling drawers adorn this sunlit, south facing kitchen which also includes a separate butler's pantry with additional rows of refrigeration.

Stately double doors provide an elegant entry into the nearly 1,000 square foot, corner Master Suite and its thirty-three foot private loggia with collapsible glass doors which open to the warm southern horizon. The luxurious corner master bath, across from a stunning designed dressing room with custom millwork and direct terrace access, features enormous windows, a vanity and a freestanding bathtub. Two additional large bedrooms have en suite baths with Travertino stone tile floors, custom cabinets with beveled detail and Dornbracht fixtures.

Foster + Partners has infused Penthouse A with custom designed millwork and rich materiality. 551 West 21st Street features a private, gated drive court surrounded by a twenty foot green wall and a dramatic, awe-inspiring thirty-four foot, double height lobby with grand chandelier. Additional amenities include full-time doormen and a concierge, porter and valet services, a state-of-the-art fitness center with a his and her spa, yoga room, residents' lounge, children's play room, parking* for the residents, bike storage, a live-in super and a dedicated, separate service entry. Smaller units located on the 3rd and 4th floors are available for additional purchase. Occupancy anticipated for the Fall 2015.

Price: $50,000,000
Common Charges [monthly]
RE Taxes [monthly]$10,375
Financing Allowed90%

Apartment Details
Apartment SizeThree Bedroom
Square Feet (Approximate)6265

Building Details
Service LevelConcierge
Age / BuiltPost-war / 2015
Building TypeMid-rise
Building Size19 Floors / 44 Apts.
Pet PolicyPets Allowed