New York’s Housing Stability and Tenant Protection Act of 2019 not only imposed rent control but also made it much more difficult for landlords to convert former rental properties into condominiums.
Currently, 51 percent of existing residents in a building need to agree to buy their apartments before a property can be transformed into a condominium, a requirement that is difficult to attain.
Centurion Real Estate Partners’ 212 West 72nd Street is one of the most recent conversion projects in the city. Formerly known as The Corner, the property was once among the buzziest rentals in Manhattan’s Upper West Side. Built in 2010 as a premier rental, the building is now being transformed into a 126-unit luxury condo property. John Tashjian, principal at Centurion Real Estate Partners, talks about what makes the project attractive and what he expects for the New York City condo market going forward.
How is the 212 West 72nd Street conversion process going? What will be the building’s most enticing features?
Tashjian: As a rental building from 2010–19, 212 West 72nd Street commanded some of the highest rents in New York City due to its superior location, architecture, light filled spaces and attentive service. As developers, we recognized that these same qualities which made 212 West 72nd Street such a successful rental building, would also be attractive to residents interested in owning in a newly designed modern luxury building at the Upper West Side’s most convenient location.
While we started with many of the most important elements required for a successful development—location, light and convenience—the building’s interior design and new apartment layouts were critical to 212 West 72nd Street’s transformation. For this important architectural and design challenge we hired John Cetra and Nancy Ruddy of CetraRuddy Architects, with whom we collaborated on our condominium project, River & Warren in Battery Park City.
Starting with the floorplans, we spent months thinking about how New Yorkers—and specifically Upper West Siders—use space. We reduced the number of homes in the building from 196 to 126 units by combining units and, in doing so, we were able to create a mix of one- to five-bedroom residences with large, light-filled spaces that seamlessly flow from room to room. CetraRuddy’s interior design features a beautiful, soft palette of stones, woods and warm metals that reflect light and create a serene atmosphere above the bustling city below.
We also worked with CetraRuddy to transform the building’s amenity areas in order to create special spaces attuned to the needs of a busy New Yorker. The third floor features a gym, resident lounge and children’s playroom, along with an outdoor space that allow residents to enjoy an indoor-outdoor lifestyle while entertaining, relaxing or even working out.
There is also a large rooftop with commanding vistas of the Hudson River to the west, George Washington Bridge to the north, Central Park to the East and all of midtown Manhattan to the south. The rooftop lounge features a fireplace, grills and plenty of room to lounge, relax or entertain.
What makes the project unique?
Tashjian: It’s the location. Anytime I tell someone that we are developing a building at 72nd and Broadway, the first reaction is, “Wow, what a great location.” Our former tenants recognize that the location, combined with the convenience of having Trader Joe’s and Duane Reade in the building and the 72nd Street subway across the street, make 212 West 72nd street the ideal address for Upper West Side living. It’s why so many of them have returned to 212 West 72nd Street as potential buyers.
Is now a good time to work on conversion projects?
Tashjian: Well, to be specific, it’s the last time to work on a conversion project in New York. New laws put into effect in 2019 have effectively eliminated the ability to convert additional rental properties to condominiums. Accordingly, 212 West 72nd Street will be one of the last rental properties converted into a condominium offering for the foreseeable future.
The luxury housing market usually takes a hit during an economic crisis as high-income earners become more prudent with spending. What is making you optimistic about sales at 212 West 72nd Street?
Tashjian: Despite broader economic challenges, the demand at 212 West 72nd Street has been very strong. Economic downturns do tend to slow marketwide demand. However, in my experience, what tends to happen is that the market bifurcates into the “haves” and the “have nots.” Those projects which are well-located, well-designed and well-built tend to absorb the vast majority of market demand. We are seeing that phenomenon happen again in this cycle and I’m pleased to report that 212 West 72nd Street is receiving an outsized level of buyer interest, when compared to its competitors.
How will the pandemic change buyers’ preferences?
Tashjian: I believe the pandemic will change the way people live in the near term and will reprioritize what residents look for in a home. Specifically, I think that a higher priority will be put on location, convenience and access to outdoor spaces. The pandemic has shown us that the ability to walk out onto a terrace or quickly go on a stroll through a neighborhood park are of critical importance to both physical and mental health.
Do you intend to work on conversion projects outside New York City?
Tashjian: As developers, we take time to study other attractive markets. We are always interested in learning about markets outside of New York City and we actively look at opportunities in markets where we see favorable market trends.
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What are your expectations for the New York City condominium market in 2021?
Tashjian: Those who have counted New York City real estate out in the past have been wrong every time. In 2021, I expect to see buyers reenter the market due to an overhang of pent-up demand and a recognition that this might be a once in a lifetime opportunity to enter the New York City housing market at a time with favorable pricing, low interest rates and a strong stock market.