Manhattan loft listed at $4 million is a bargain — with a catch
A Greenwich Village loft listed for sale at $4 million is a relative bargain, but there’s a catch: The apartment comes with a tenant who has been there for decades.
The tenant pays $2,346.21 a month and, under New York City regulations, is entitled to continue to renew the lease, even if the unit is sold. The 5,800-square-foot (539-square-meter) apartment is rent-stabilized, limiting annual price increases to a typically small percentage each year.
Until the tenant leaves, the buyer would be operating at a loss. The current rent, well below market rate for the neighborhood, doesn't even cover the building's monthly common charges.
The apartment, on the 11th floor of the condo building at 12 E. 12th St., is being marketed to “INVESTORS ONLY,” according to the listing by Janice Bayer and Stephanie Rappoport of Compass. The agents play up the location, between Fifth Avenue and University Place, and note the “open views” to north, south and east. There are no images of the unit in the listing, and the floor plan doesn’t show internal walls.
The tenant has been there since at least the early 1980s, when the building was converted into condos, said Steven Hochberg, an attorney at Golenbock Eiseman Assor Bell & Peskoe who is representing the sellers. His clients “thought it was a prudent time” to see whether there was any buyer interest, he said.
The listing mentions two recent sales of apartments with the same square footage at significantly higher prices, a nod to the unit’s potential value for an owner who’s willing to wait for the tenant to move out. The 10th floor, with five bedrooms, sold for $10.75 million in April. The sixth-floor unit went for $9.475 million in February.
For the 11th floor, the asking price works out to about $690 a square foot, well below the $1,639 average for Manhattan sales that closed in the first quarter, according to appraiser Miller Samuel Inc. and the brokerage Douglas Elliman Real Estate.
The building requires a minimum down payment of 10%, and the buyer would have to pay $2,802 a month in common charges and monthly taxes of $5,498.