COPA Gives Nonprofits First Dibs, Leaving Investors Waiting
COPA cleared the Council, giving the city’s nonprofits a chance to skip the line when distressed multifamily buildings go up for sale.
But will landlords play ball with these nonprofits?
Eager investors will need to wait their turn now that the Community Opportunity to Purchase Act is on its way to the mayor’s desk, where it is certain to get his signature as a key component of his housing plan.
This comes as the estimated list of properties eligible for COPA increased by more than 1,000. Some 3,400 distressed properties that meet the threshold for violation count or participate in certain enforcement programs will be eligible for COPA if they go on the market, the city’s Department of Housing Preservation and Development estimates. Speaker Julie Menin cited a lower approximate number of impacted properties on Thursday before the bill passed, at just 2,100.
The question on investors’ minds now is whether nonprofits and joint ventures selected by the city will pony up competitive bids during the 145-day period at the beginning of the sale process. Some in the real estate industry don’t think housing nonprofits are financially equipped for the task at hand and expect most of these transactions to instead be prolonged and ultimately go to a for-profit investor.
“The structural problem is they haven’t figured out how these nonprofits could possibly not only afford to buy these properties … how are they going to repair and maintain it?” said Deborah Riegel, member at Rosenberg & Estis. “You may have people like Riseboro, Met Council, that’s certainly possible and they will have funding to purchase properties and funding to maintain and repair, but there’s a very limited number of buildings that those established nonprofits are likely to be able to buy.”
She added that landlords may simply wait them out until a deep-pocketed buyer is eligible to make an offer after the COPA window closes.
Riegel, who represents petitioners in an ongoing lawsuit challenging the Rent Guidelines Board’s vote to freeze the rent on one- and two-year leases, noted that she is examining whether any legal challenges to COPA will emerge as implementation begins, but that it was too early to say if any suit was imminent the day after the bill’s passage.
“I don’t think the mayor has been shy about the fact that he is inclined to try and put more properties into tenants’ hands — all he has to do is direct HPD to step up enforcement, which they’re already doing,” Riegel said. “Do I think people are going to give their properties away? I doubt it. Likely what happens is they reject [nonprofits’] offers and then they go to the market.”
What we’re thinking about: Will most of the COPA transactions just take longer and ultimately go to a for-profit player? Or will more nonprofits make compelling offers that get owners to sell their distressed buildings? Let me know at ben.miller@therealdeal.com
A thing we’ve learned: More than 25,000 suffragists marched down Fifth Avenue wearing all white on Oct. 23, 1915 to advocate for women’s right to vote, though the male electorate voted down the state amendment that November. Just two years later, New York State passed a referendum granting women full voting rights, leading to the national ratification of the 19th Amendment in 1920.
Elsewhere…
— Lawmakers plan to grill the Mamdani administration officials at a hearing to figure out why a $650 million vision to modernize the Hunts Point Produce Market fell apart over the summer, with Menin citing the overhaul of the city’s wholesale hub as “mission critical,” Gothamist reported.
— The MTA pulled fare enforcement agents from the city’s bus network after two incidents where agents assaulted passengers, with Chairman and CEO Janno Lieber claiming that they won’t be back on buses until a top-to-bottom review has been completed, Streetsblog NYC reported.
— Mayor Mamdani opened a time capsule at the Port Richmond Wastewater Resource Recovery Facility on Staten Island, which contained a note from 1976 penned by Mayor Abe Beame. The letter was full of well wishes for the future, lofty goals like eradicating hunger, disease and illiteracy that the world is still far off from reaching, Hell Gate reported.
Closing time
Residential: The most expensive residential sale recorded Friday was $26 million for 500 West 18th Street, PH35B. The new-construction condo unit at Chelsea’s One High Line is 5,000 square feet. In-house marketing team Corcoran and Steven Gold had the listing.
Commercial: The most expensive commercial transaction was $36.5 million for a pair of commercial condo units at 594 Bushwick Avenue. In 2021, Walker & Dunlop structured a $36 million loan for Cayuga Capital Management for the 64-unit, luxury, mixed-use building that had 14,000 square feet of rentable retail space, per reports.
New to the Market: The highest price for a residential property hitting the market is $19.8 million for 443 Greenwich Street, Unit PHF. The Tribeca condo unit is 3,500 square feet. Brown Harris Stevens’ Lisa Lippman has the listing.
— Joseph Jungermann
