Dear God, please keep the common charges low
Published: Aug 19, 2013
Low common charges, the building’s operational and maintenance expenses, have always been a factor of attraction for buyers on the hunt for a luxury condo.
Across New York City, board members are looking for creative ways to reduce common charges and, at the same time, beef up amenities. The goal: to make their buildings as attractive as possible to home seekers as well as to current residents.
The Real Deal magazine recently ranked condos in Manhattan below 100th Street with more than 50 units. They then delved into how a few are managing to offer both rock-bottom fees and top-of-the-line services. For those 366 condos surveyed, monthly common charges range from slightly less than a dollar per square foot, to nearly $4, according to data compiled by StreetEasy.
The lowest common charges are at Downtown by Philippe Stark at 15 Broad Street, where residents pay 92 cents per square foot, yet have a doorman, a concierge, a fitness center, a roof terrace and a host of other amenities.
An important element towards low common charges is the size of the building. There are 382 units at 15 Broad Street. The more space there is in a building the more common costs can be spread over a larger square footage, therefore reducing the cost per square footage.
Other buildings with low common charges are: the Atelier at 635 West 42nd Street, which charges 97 cents; the Alexander at 250 East 49th Street, 99 cents; 35 West 15th Street, $1; and Hudson Hill Condos at 462 West 58th Street and the Rushmore at 80 Riverside Boulevard, both $1.04 per square foot.
Buildings with highest common charges are: the Cove Club at 2 South End Avenue in Battery Park City with $3.98 per square foot followed by the Baccarat Hotel & Residences at 20 West 53rd Street, at $3.88.
The Cove Club is on a land lease since it sits on Battery Park City (the land is still owned by the Port Authority), this accounts for its comparatively expensive charges. The Baccarat ranks up there because of its ultra-luxury status.
One way a building can control its costs is through the efforts of the board members.
More-active boards can stay on top of management companies to make sure they are meeting the building’s goals and find ways to save and raise money (for example, renting out the amenities to third parties for special events).
Some buildings have even looked to reduce monthly fees by cutting staff, since labor costs - specifically pay and benefits - are typically a building’s biggest maintenance expense.
Other condos zeroed in on energy efficiencies to help their bottom lines. At 20 Pine, an LED lighting program that cost $380,000 has already saved $200,000 in electricity costs since it was installed last year. And the Atelier saw its electricity bill drop by 30 percent after it installed solar panels two years ago.
This is it for today, dear readers. I am available to answer your questions and provide you with more information on New York City, Miami and U.S. real estate.
• Riccardo Ravasini is a real estate maven and an active agent in New York and Miami. He grew up in Italy where he studied Business and Finance at Bocconi University in Milan before moving to the U.S. He enjoys assisting people in the search for the perfect rental apartment as well as international buyers looking for smart investment properties. Contact him at +1-917-214-2509 or email@example.com.