It incited the fury of neighborhood activists and politicians. It has been derided as the city’s tallest, and ugliest, cheese grater. And now the outsize, out-of-place One Manhattan Square luxury condo tower has hit the trifecta: sales are so sluggish on the 815 units that the developer, Extell Development, is offering to waive one decade worth of common charges, the Real Deal reports.
Yes, one decade. That’s how tough it has become to sell new condos in Manhattan, where new inventory continues to pile up amid shrinking demand.
“I’ve seen some pretty insane incentives before but that tops it by far,” says real estate attorney Petro Zinkovetsky, founder of the Zinkovetsky Law Firm. “Those incentives are going to cost them money; someone has to cover the operations of the building.”
According to an email publicizing the offer, buyers who close by July 4 will not pay common charges for five years on one-bedroom units; seven years on two bedrooms; or 10 years on three bedrooms. The building also has a 20-year tax abatement, meaning buyers can expect to save between $12,720 and $31,150 in annual taxes.
During the first quarter of 2019, there were just 157 unit sales in new development buildings, down a massive 39.4 percent year over year, according to data from appraisal firm Miller Samuel. The figure also represented the lowest market-share in four-and-a-half years.
It’s unclear how many units remain at One Manhattan Square, where Extell launched sales in late 2016. Prices run from $1.2 million for one-bedroom units to $3.5 million and up for three beds. According to the offering plan, projected monthly common charges are $746 for a one-bedroom unit; $1,452 for a low-floor two-bedroom and between $2,300 and $3,300 for three beds, depending on the floor. You do the math. If someone isn’t paying those common charges, someone else is taking a bath.
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