Many buildings have square footage hidden away that could be converted to residential use. Hallways, rooftops, unused garbage rooms, basement closets, abandoned water tank rooms - all are potential additions to an adjacent shareholder's apartment. The financial outlay for the building is small and the potential for revenue - both through the sale of new shares and added future maintenance - is great. Creative co-op boards and their property managers are now looking at a new tactic that adds value to both the building and certain lucky apartments; they are finding unused common space, and selling it to shareholders to enlarge their apartments.
"You already own the land," says David Magier, a managing member of Harlington Realty, a Manhattan-based real estate management company. "There is an economic incentive to use it if you have additional floor space since land is so expensive."
Sometimes, a space will become available, and thus, the opportunity presents itself. This was the case for Robert Grant, director of management at Midboro Management, a full-service real estate company based in Manhattan. In one of the buildings Grant manages, one of two old water tanks was in need of retirement. When considering their options, the board decided to keep using one tank, and to remove the other. This left a bulkhead space available, which at Grant's suggestion was offered to the tenant directly below the now empty tank room.
The result was a win-win situation. "By converting that into residential space," explains Grant, "The shareholder had a duplex and added value to their apartment. The building added immediate income by selling shares for the new space, and permanent income in the form of increased maintenance."
Grant says there is no end to the places where usable space can manifest. As technology improves, entire mechanical rooms are becoming obsolete and emptied. Even a few feet of hallway space will add to the shareholder's square footage and quality of life. "Instead of going up, you can look down," says Grant. "Those sprawling garden apartments in Queens have acres of basements."