New York's Cooperative and Condominium Community
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How one Fifth Avenue co-op improved its sale prices.
Howard Slavin believes that bettering service increases value, and has the rising unit prices to prove it.
Howard Slavin,Board Vice President,1025 Fifth Avenue
Resident since: 1997
Joined Board: 1997
In his 21 years living at the 155-unit co-op at 1025 Fifth Avenue between 83rd and 84th Streets, Howard Slavin has been on and off the seven-member board many times, thanks to term limits. He is currently vice president of the co-op board and the principal at RoseTerra, a commercial property management company that expanded into residential management in the last year. A native New Yorker, Slavin says that his roles as a manager and board member have one thing in common: “I’m trying to make it a better environment for people to live in.”
Habitat: Your co-op board did something pretty impressive: you increased the value of your building. How did you do that?
Slavin: A number of years ago, I realized that apartments in our building were selling for a lot less than apartments in comparable nearby buildings. I’m not a broker, but what really hit home is that one of my friends sold his two-bedroom apartment around the corner for about 15 to 20 percent more than he would have gotten for a comparable apartment in our building. So I’m like, “What’s going on here?” I asked a friend of mine, a broker, to do a study, and it proved what I thought: our apartments were getting a lot less than comparable buildings. It didn’t make sense to me because we have an arguably better location and better amenities, including a garage with great prices.
Habitat: What did you do then?
Slavin: I brought this to the board, and they decided to form a “value” committee to look into it. The committee then invited some of the leading brokers who sold apartments in our building and some of our competitive buildings and asked them to, first, confirm that my observation was true and, if so, why? Three brokers confirmed that we were getting less in sales prices than comparable buildings in the neighborhood. They proposed the reasons why: “No. 1, you do need to know that your building is universally known for having great service, and everyone loves the guys who work in the building.”
But, they added, we were missing a lot of prospective buyers because of specific things: No. 1, we didn’t allow pets; and No. 2, we had a reputation as a difficult board because we had difficult financial requirements. That is more perception than anything else. Lastly, what the three brokers said was that we needed to change our management company. We needed to go with a more “name” firm. They wanted us to go with one of the top three luxury management companies, even though we were very happy with the management company we had at that time.
Habitat: You had all these things they were telling you, and you decided to make changes based on that feedback?
Slavin: We set out to correct some things first. We changed our policy to allow dogs. That was pretty much a no-brainer. Secondly, while we all felt there were good reasons not to allow pied-à-terres, we believed that this was a change we should make to increase value. Originally, the thinking was we shouldn’t allow that because when it comes time to do some type of capital project assessment, you’re going to get voted down by all the people in pied-à-terres because they’re not living there. They don’t see it, they don’t really care, and they don’t want to spend the money. Whether that’s true or not, that’s what the board was going on. Now we said, “All right, forget that. We need to be more competitive.” So we allowed pied-à-terres.
Finally, we interviewed three management companies, and we picked Brown Harris, one of the oldest of the old-line firms, which, I believe, manages the majority of the Park Avenue co-ops.
Habitat: What happened after you made the changes?
Slavin: We haven’t done an updated study, but anecdotally it seems as though the prices have risen. From what I can see, we have come much closer to our competitive set.
Habitat: How long did all this take?
Slavin: The original meeting about what to do was three years ago, but I would say it was probably five or six years ago that I first had this epiphany over the issue.
One other thing we did was to explain to brokers that, while our maintenance is a the same as similar buildings, it includes electricity. We’ll probably break the electricity out, so our maintenance will go down. We also put a leaflet together to give to all the brokerage community, pointing out all the great attributes of our building – including the new pets and pied-à-terre policies, the gym, and the garage at $300 a month.
Habitat: Are you satisfied now?
Slavin: Oh, no, we’re always – like all boards should – looking at improving the building. We’re looking at reconfiguring the whole basement in order to expand the gym and our storage units and just beautify the whole basement area. n\
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