New York's Cooperative and Condominium Community

Habitat Magazine June 2020 free digital issue

HABITAT

CO-OP/CONDO BUYERS

WHAT CO-OP/CONDO BUYERS NEED TO KNOW

Luxury Condo Tower Caps String of Concessions with Big Price Chop

Lower East Side, Manhattan

COVID-19, condo sales, price cut, Extell, One Manhattan Square.

One Manhattan Square, derided by critics as "the Cheese Grater," is offering 20% price cuts.

May 5, 2020

Extell Development, developer of the 815-unit luxury condo tower One Manhattan Square, has topped a long list of concessions with price chops up to 20% on all unsold units “in response to global conditions related to COVID-19,” the Real Deal reports.

The tower beside the Manhattan Bridge was the target of vigorous resistance from advocates in the low-rise, largely low-income neighborhood on the Lower East Side, who dubbed it “the Cheese Grater” for its nubby glass skin. Struggling to sell units in the soft luxury market long before the pandemic hit, Extell waived common charges for up to a decade – an unprecedented move, even in a concession-heavy market. Later, it introduced a “rent-to-own” program.

It’s unclear how many units will be subject to the latest discounts. In January, an analysis showed that 223 of the building’s 815 units had been sold, 39 were in contract, and 553 were unsold. (A spokesperson for Extell declined to provide more up-to-date figures.)

To keep deals moving, brokers across the city have hastily shifted their operations online, conducting meetings on Zoom and showing properties virtually – the closest thing buyers can get to a look inside from the confines of lockdown. Some co-op boards have agreed to conduct interviews with potential buyers remotely, and some co-op and condo sales have been finalized at virtual closings, known as escrow closings, that take place without interpersonal contact.

“While we have adapted to selling our residences through a virtual sales experience, we recognize that it is also important to incentivize our buyers with this program,” Extell’s founder and chairman, Gary Barnett, says of the new round of price cuts. “Combined with low interest rates and a 20-year tax abatement, we feel this will make for a very compelling offering.”

The tower is currently advertising prices ranging from a one-bedroom unit asking $1.2 million to a three-bedroom unit asking $7.8 million. According to a 2019 analysis of sales at the building by the Real Deal, the average price of units that have closed is $1.7 million.

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