All Co-oped Up

Amid New York’s condo and co-op conundrum, demand for the latter remains strong but not necessarily the most pragmatic choice for international investors

- Diana Hubbell

For roughly a century, co-operative buildings, or co-ops, have been a formidable force in the New York real estate market. Although the majority of urban areas around the world tend to favour condominium ownership, an estimate by Douglas Elliman Real Estate—the largest brokerage in the New York metropolitan area— reveals 70 percent of residential properties in New York stick to the co-op model.

This is even truer with highly coveted pre-war buildings in Manhattan and Brooklyn, which remain among the city’s symbols of prestige and are almost exclusively co-ops. For tenants, a co-op also has the distinct advantage of offering a measure of control over other residents in the building.

“For consumers who want a community to be a part of, co-ops offer that mode of living to a far greater degree than condos,” says Steven James, president and CEO of Douglas Elliman New York City. “Co-ops tend to be smaller buildings with a more cohesive structure. The co-op is really a club. It’s a corporation governed by a board of directors elected by the membership or shareholders. The board makes all decisions about the day-to-day life in the building—especially who can join the corporation or not.”