New launch condo in Manhattan – being the earlybird
Posted by Wei Min Tan on March 23, 2020
Being the earlybird at a Manhattan new launch condo project usually means getting the condo at the initial pricing, known as Schedule A pricing. As a new launch condo development sells over time, the developer usually increases price, known as Pricing Amendments. A price amendment reflects increases in price for condo lines that are selling well.
Clients invest in new development condos for the anticipated price increase after the project is completed. The waiting period is around 2 years from the time the buyer puts in the contract deposit to when the property is completed. The below was our experience at 91 Leonard Street in Tribeca. We got into the sales office before the sales office even officially opened. This gave my client the best options.
91 Leonard was launched at the beginning of the down market back in 2017. Contrary to the strategy of other new developments, 91 Leonard was priced attractively and in-line with the slow market. Hence it attracted a lot of interest. This shows that regardless of market condition, a properly priced property will get the deserved level of attention.
Read about Pros and cons of investing in new property launches in Manhattan
Financials of the new launch Manhattan condo
Property: 91 Leonard St, New York, NY 10022 (Condominium). One bedroom condo.
Common charges: $997
Property taxes: $1,523
Rental return: At rent of $6,000 per month, rental return of 2.9 percent based on asking price. This is very high by Manhattan standards.
Size: 846 square feet
Read more, Buying Manhattan condo to rent out
Read about Wei Min’s style in Best Manhattan property agents and Role of a buyer’s broker.
$1,700 per sqft, a deal for Manhattan new launch condos
The condo is a large 846 sqft luxury One Bedroom in Tribeca. Key decisioning drivers were the Tribeca location, attractive $1,700 price per sqft and low contract deposit amount. The carrying costs were on the high side and that was a downside. Ceilings are high and the large windows make the apartment brighter. We got the best pricing by being the first buyers in. For comparison, the apartment one floor below ended up selling for $100,000 more while the apartment one floor above sold for $170,000 more. This was an excellent buy for the client.
Read about New property projects in Manhattan, how we pick winners
Interior photos of the apartment
High ceilings make the apartment look larger and is highly desired in Manhattan.
High end luxury marble bathroom.
Kitchen with top of the line appliances.
Amenities at 91 Leonard
91 Leonard, developed by Toll Brothers, is a Full Service building with Concierge, Fitness Center, Residents’ Lounge, Pool, Garden. The pool is a great differentiating factor because most buildings do not have pools. Obviously, the photos below were taken after the project was completed. At time of the buying process, we could only view renderings at the sales office. Asking the right questions and deciding based on limited information is a key skill needed when buying at new development projects.
Freehold condo is the way to go
Most Manhattan new development condos are freehold. This as opposed to the concept of leasehold where ownership is limited to a set number of years. In Battery Park City and certain Manhattan residential buildings scattered here and there, the land underneath the building is leasehold. In addition, there are a handful of new development projects that are Cooperatives, which means the apartment owners own shares in the building as opposed to owning real estate title.
A freehold condo is most desirable as it gives the most appreciation potential and allows the owner to rent out and do renovation without restriction. The project 91 Leonard is a freehold condo.
High rental return for Manhattan
The expected rent for this unit was $6,000 per month. After deducting common charges and property taxes, it provides an all cash rental return of 2.9 percent. The Manhattan average is about 2.5 percent, and anything close to 3 percent is high for Manhattan.
Close to 6/R/N/Q subway train lines.
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale
Read about Key questions for the foreign buyer interested in Manhattan property
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