The high cost of white gloves

By A. Ready | November 18, 2010 - 4:51PM

Whenever we run across an apartment with high monthly maintenance fees--like $3,898 per month for a 2 bed/2 bath Sutton Place co-op (whose design CurbedNY calls seriously weird)--words like "landlease," "crazy high underlying mortgage" and "run!" pop into our head. Not necessarily so, real-estate broker/writer Ali Rogers opines on StreetEasy.

"In the Sutton/Beekman area you have lots of little, boutique-sized buildings, so you have fewer owners available to support the expense of a full staff. If we say that a 120- or 150-unit building is an 'average' size, and that 35%-40% of the expenses of that kind of building are going to staff and associated costs, you can see what happens when that model goes to an 80-unit (or in the case of 444 East 52nd Street, 52-unit) building."

So how do you know if that's the case just from looking at the listing?

"Well," she explains, "the two big portions of a building's budget that are tax-deductible are interest on the underlying mortgage and property taxes, and the three big portions of a building's budget that are not tax-deductible are labor costs, utilities, and maintenance. So if a listing has a fairly low % T.D. (in the case of 444 East 52nd, 40%) we're going to make an educated guess that it's because of that white-glove service that Beekman/Sutton is so famous for." (StreetEasy, CurbedNY)

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