The Real Deal

The Real Deal

New Developments Market “Co-ops with Condo Rules”

New Developments Market “Co-ops with Condo Rules”

Eagle-eyed readers of luxury contract reports and building marketing materials might have noticed a property type that some could be excused for thinking was a typo.

This hybrid model is called a “condop,” and it’s been around for decades, but its technicalities could frazzle buyers and agents alike.

The term originally described mixed-use properties with retail space operating as a condo and residential units as a co-op. But it has since morphed into a catch-all phrase to describe buildings operating financially as co-ops but with rules more akin to condos.

But some buyers with a strong aversion to co-ops may never sit down for the conversation about the building to learn the normal rules don’t apply, Aaron Goed, sales director at The Solaire, said. This could have a larger impact on international and investor buyers, who typically avoid co-ops due to restrictions on renting the property and intense board approvals.

Though this hasn’t impacted sales at The Solaire — which Goed said is not a condop, but a co-op with condo rules — which inked the largest number of contracts last year, according to a Marketproof report on new development.

Owners at the Battery Park City building can rent out their apartments whenever they want, with no board kickback or flip taxes required.

But ultimately, the building’s ownership structure has little bearing on sales or marketing, Goed said. Though The Solaire’s offering plan emphasized its relaxed condo rules, Goed said the majority of buyers come to the building because of its location, look and feel.

“Most people that are looking at this building are looking at it because it’s this building,” Goed said. “Ownership structure is not a part of the conversation. It’s not the first thing that they’re thinking about.”

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