Feb. 13, 2018 By Christian Murray
The average price paid for a coop in Citylights has gone up by more than 75 percent over the past 12 years–to $645,000 in 2017–according to a new report.
Patrick W. Smith, a broker with Stribling and a Long Island City resident, has released “The City Lights Market Report 2006-2017” and has analyzed all 314 sales that have taken place in the building over the past 12 years.
He noted that the price appreciation of the average coop in Citylights was greater than that for the average Long Island City condo—up 70 percent–over that period.
“This report separates fact from fiction,” Smith said. “The fiction is that because Citylights has higher maintenance charges, the value is not there. However, sales data indicate that the prices paid for coops at Citylights are steeply discounted compared to condos making them a worthwhile investment.”
Smith said that he conducted the report after Citylights, which has 521 units, was profiled by the media last month with a focus on its rising maintenance charges.
Furthermore, Smith said, the building is worth studying since it generates a great deal of sales activity. He said that there were more units sold at Citylights between 2013 and 2017 than at any other building in Long Island City—with 146 transactions, at an average of 29 sales per year.
Smith’s research determined that the average sales price at Citylights increased from $367,500 in 2006 to $645,000 in 2017. Over that same period, the average sales price for a condo in the Long Island City grew from $647,000 to $1,103,000.
Citylights has come under the spotlight lately given the rise in its monthly maintenance charges. The charges will be going up significantly over the next 4 to 5 years, since its 25-year tax abatement program is being phased out.
The 5-year phase out period began this year at a time when the city hiked the building’s assessed value by 87%.
Coop owners saw their maintenance go up 9 percent this year, to cover the cost of the first year of the phase out, according to public records. The costs associated with the taxes are being phased in at 20 percent increments over the next five years until the abatement vanishes by the end of 2022.
The maintenance levels are expected to go up 9 percent each year–for the next four years– to cover the tax hike.
However, many condo buildings in Long Island City will see their tax abatements phased out in years to come and there are several buildings that don’t have them at all, Smith said.
But the building’s maintenance costs have always been high, largely due to the way the building was financed in 1997. At that time, an $86 million loan was put on the building to keep the initial prices down.
Units, based on data obtained by the LICPost, were initially priced at levels such as $15,800 for a studio and $64,500 for a 3 bedroom.
The building still carries a large loan, with it paying $4.8 million last year toward debt servicing. The building also has to pay rent on a ground lease to The Queens West Development Corp that expires in 2095, and for its elaborate amenities.
The monthly carrying charge for a one-bedroom, 677-square foot unit this year comes in at $1,564, according to Smith’s report. Meanwhile, the monthly cost of a two-bedroom, 1,029 square foot unit is $2,377; and a three bedroom, 1527-square foot unit is $3,527.
The average monthly carrying cost at Citylights for 2018 is $1,947, according to Smith, compared to $894 for a condo.
Smith said that buying a coop in Citylights still makes a lot of sense, given that it costs $1,103,000 to buy an average condo in Long Island City versus $645,000 at City Lights.
“In 2017, purchasers at Citylights saved an average of $458,000 through significantly lower purchase prices in exchange for paying $12,640 more per year in monthly carry costs on a pre-tax basis.”
In addition, Smith said, Citylights offers a superior location to most condos, with stunning views of the East River and proximity to Gantry Plaza State Park. The building also offers better amenities than most condos, he added.