The Market

WINDFALL!! A look at StuyTown's proposed insider prices

By CompsQueen  | September 17, 2010 - 1:06PM

Things are heating up over at Stuyvesant Town/Peter Cooper Village.   The neighborhood may be called boring, the residents either ancient or ready for the next frat party, and the transportation non-existent, but the residents of this secluded enclave may be about to enjoy their own 1980’s-style coop conversion bonanza. 

While numerous parties are said to be interested in potentially taking over the complex, recently one plan has been getting a lot of press

Gerald Guterman, a partner in Condo Recovery, LLC, told Reuters that the Condo Recovery plan would price the apartments at an average of what rent-stabilized tenants pay as their monthly rent, or about $290 per square foot.  It would also guarantee a mortgage of 85 percent of the cost.  According to Reuters, “[t]he market rate in the area is about $775 per square foot.”
We think $775 is about 10% more than a buyer would be willing to pay.
In StuyTown's favor, the monthly costs will likely be low: There will probably be little to no underlying mortgage, there are no doormen to underwrite, and certain pay-to-play amenities mean residents don't pay for a gym or playroom that they don't use.
Other selling points: The southern portion of the complex is close to the food and entertainment mecca of the East Village, while  "on-campus" recreation includes a weekly farmer's market, playgrounds, basketball, volleyball, organized kids' sports, and lots of grass (the legal kind). 
But StuyTown doesn't appeal to buyers allergic to campus-style living. And there are a number of other factors that argue for a lower-than-average market value:  Hard by the East River, StuyTown/Peter Cooper Village is too remote for many, and transportation can be an issue.  The northern portion of the complex, Peter Cooper, has few decent restaurant options.  The buildings lack doormen.  And the condition of the non-renovated units varies greatly.  Hence our assessment that $775 per square foot may be on the rosy side.
So how does this translate into real numbers for residents able to grab a piece of the insider pie?  Check out the two examples below, using Condo Recovery's $290-per-square foot number as an average insider price.
850-square-foot one-bedroom in Peter Cooper Village 
Current asking rent: $3,731
Insider price:  $246,000. With 15% down and a 30-year-mortgage at about 5%, that works out to about $1,800 per month plus maintenance.
Market rate: At $775-per-square foot the unit would sell for $658,000.   AT $700-per-square foot (the CompsQueen reality check price), the market value is $595,000.
1,150-square-foot two-bedroom in Peter Cooper Village
Current asking rent: $5,312
Insider price:  $333,000.  With 15% down and a 30-year mortgage at about 5%, that's $2,200 per month plus maintenance.
Market rate: At $775-per-square- foot, the apartment would sell for $890,000.  CompsQueen reality check price ($700-per-square foot): $805,000.
Over at Stuyvesant Town the units are somewhat smaller. But hey! They’d be even less expensive.
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