Building Sale with Stabilized Apartments Sets Benchmark Post-Rent Rule Changes
A small apartment building in Greenwich Village recently sold, representing one of the first sales since new laws restricting rents were enacted. It provides an early indicator of the values of rent-stabilized buildings under new state rules. The five-story walk-up sold for $11.6 million, a 12 percent discount from the seller’s last asking price. Three of the building’s 13 units are rent stabilized.
The prior owner had the building for more than half a century before deciding to sell. The building was brought to the market at the beginning of the year for $15.5 million. But as talk of rent-rule changes gained momentum, the brokers responded by lowering the asking price to $13.2 million in April. According to the brokers, as passage of the law became all but certain in June, inquiries for the building had stopped.
In the broader market, sales of Manhattan apartment buildings with rent-stabilized units fell after June 14, when lawmakers passed measures severely restricting owners’ ability to raise rates on such properties, effectively putting a cap on their market value. Since then, there have been 10 deals in Manhattan, down from 20 in the same period last year.