French bank sells condo block

Real Estate Weekly, March 23, 1994

Banque Nationale de Paris sold a block of occupied sponsor units, reports Mark Zborovsky, president of Mark Zborovsky and Company Inc., a firm specializing in analysis, appraisals and sales of large blocks of sponsor units in New York which was a broker on the sale.

The 10 unit block is a part of a mixed-use condominium complex that is comprised of 7 commercial and 81 residential units.

The building was built in 1939 and is in excellent physical condition. Due to a condominium status of the units the block has a positive cash flow of approximately $85 per unit per month.

The property is located in Elmhurst, Queens. It was bought and converted into condominium by well-known converter Aaron Ziegelman in 1987.

Zborovsky, who represented both the seller and the buyer in this transaction, says that the vacant market value of the block is under $1 million.

CrossLand Savings Bank, FSB, which also took back a block of units in the building, has recently sold them to another investor as part of a much larger package (487 apartments in 14 buildings).

When apartment houses are converted from rental to ownership plans, some tenants choose not to buy their apartments but to retain their current status. These tenants continue to pay rent to the owner, the sponsor of the conversion, who is then responsible for paying his maintenance charges to the cooperative. These units can be sold by a sponsor to an investor at a discount. When a tenant vacates an apartment, the new owner resells it at the then market price and realizes a considerable profit.

This transaction is the seventh sale of a block of sponsor units in New York that Mark Zborovsky and Company, Inc. has arranged in the last 18 months.