The Co-op to Condo Conversion Specialists™

Why Convert?

Why Convert?

The Conversion of your cooperative corporation is proposed as a solution to a staggering reduction in values of units in the existing cooperative ownership structure. It is also a desired vehicle in which to assure prompt and successful sale of units, which a sponsor may continue to own. Moreover, selling shareholders will be able to liquidate their property at higher values.

By converting the cooperative units into condominiums, the inherent value of each shareholder's investment will increase. Moreover, the target market would expand to include those who would never consider purchasing a cooperative because of traditionally high maintenance costs. Upon conversion maintenance fees will be reduced to under one-half (1/2) of their current levels, thus reducing the stigma of high cooperative maintenance fees.

One concern that existing shareholders will have is the ability to maintain the status quo, if they are not desirous or able to redeem their units. This could be the case where a shareholder may have purchased his unit as a cooperative at a very high price and leveraged such purchase at the time of sale. At current market values, these shareholders may not be able to find lending institutions to provide sufficient mortgages to liquidate their share loan and have sufficient cash to redeem their unit from the cooperative. In those rare cases, Hutton will develop a strategy to allow these shareholders a certain period of time, post-conversion, to either sell their units as a condominium or to refinance their obligations once unit values are further enhanced through a post-conversion market plan.

Advantages of a Condo versus a Co-op

Enhanced Value
The primary advantage of condominium ownership over cooperative shares in a corporation is the enhanced value of the former, due to a general aversion by buyers towards co-ops as a consequence of high maintenance and the absence of real property ownership.
Broader Market
A larger market of buyers exists for condominiums rather than for co-ops and condo units will usually sell faster and at higher prices.
No Board Approval
The ultimate consummation of a condominium is much simpler and more certain, since no Board approval is necessary.
Lower Tenant Occupancy
More often than not, a reversal in a high transient tenant occupancy building will result since units in the building will be attractive and available to those who wish to be owner occupants. Wouldn't it be nice to live in a building where caring owners are your neighbors rather than transient tenants you don't even know?
More lenders are apt to provide mortgages to condo buyers or owners for refinancing at lower rates and more desirable terms.
Post-Closing Advantages
In a rising real estate market, a condominium owner can easily obtain additional equity financing through a second mortgage, whereas such a vehicle is virtually non-existent for a co-op owner.

The Many Reasons to Convert from Co-op to Condo