Why Do Celebs Prefer Condos Over Co-ops?

Condo vs. Coop

Being a Hollywood A-lister comes with a lot of perks: Huge paychecks, coveted seats at restaurants, the adoration of millions, and, of course, the chance to network and collaborate with other famous faces that circulate in their rarified circle. However, even the most celebrated of celebs may find themselves refused entrance to some of Manhattan’s most prestigious co-operative apartment houses.

One of the most well known co-ops in Manhattan is the Dakota, located across from Central Park on the Upper West Side and known around the world as the New York home of Yoko Ono and former husband John Lennon, who was tragically gunned down outside the building. As the real-estate-focused website City Realty has noted, despite welcoming a handful of entertainment industry royals through its doors during its storied history, Roberta Flack among them, the landmarked building is said to have unceremoniously rejected many a famous face — including Madonna, Carly Simon, Billy Joel, Cher, Judd Apatow, Téa Leoni and Alex Rodriguez.

The general consensus is that exclusive co-op buildings such as 740 Park Avenue, where hedge fund fat cats live side by side with mega-rich industrialists and other captains of industry, and 1040 Fifth Avenue, where Jackie Kennedy resided until her death, typically favor low-profile residents. In other words, the rich and relatively unknown, or at least scrupulously discreet, are coveted — those who won’t bring negative attention to the building or its other well-to-do residents. Big name actors and globetrotting pop stars, who sometimes have large entourages and frequently attract paparazzi, are known by real estate agents to be strictly verboten at any number of co-op buildings. Indeed, some agents may tactfully dissuade a celebrity from even submitting an application. And so, increasingly, showbiz’s A-listers are moving away from exclusive co-op buildings and instead into swanky condo complexes.

The often intrusive selection process potential buyers are required go through to buy into a co-op has, in part, given rise to ultra-luxury condos such as 15 Central Park West, where owners have included Denzel Washington, Hong Kong heiress Karen Lo and Russian heiress Ekaterina Rybolovleva. Midtown’s 220 Central Park South, where Sting and financiers Ken Griffin and Dan Och have recently spent titanic sums on lavish spreads, is another condo tower attracting big name buyers, and Tribeca’s celeb-laden condo 433 Greenwich Street counts Jake Gyllenhaal, Meg Ryan, Blake Lively and Ryan Reynolds and Justin Timberlake and Jessica Biel among its illustrious owners.

So what’s the difference between a condo and co-op? And why are condos often a much easier proposition for celebrities and other high-profile people to buy? In short, buying a condo is generally a pretty straight-forward process. With rare exception, anyone with the money can buy one. Condo buildings are subject to by-laws that have to be approved by New York State’s Attorney General’s office and must be adhered when accepting owners. One of these by-laws states that a condo building can only turn a buyer away if the building’s governing board decides to match the potential buyer’s price for a unit. The purchase by the board usually has to be approved by most of the unit holders in the building, which can be a long and drawn-out process and, hence, rarely happens.

However, purchasing a co-op apartment, especially in the more prestigious apartment houses, can be a brutally intrusive process. Unlike a condo, a co-op dweller doesn’t actually own the unit they live in. Instead, they own shares in the building. Therefore, other residents of the building have an interest in making sure potential buyers meet the rigorous and sometimes mercurial building standards. In order to be considered, potential buyers, even A-listers and multi-billionaires, must submit an extensive application package that typically includes information about everything from income to assets, to credit card balances and even renovation plans. Some coops also ask for information about education, hobbies, and social contacts, just to make sure the buyer is of the right ilk. If a candidate’s application does not pass muster, they are summarily rejected as a buyer and the law requires no reason be provided by the board. On the other hand, if the application is accepted, most boards will request an interview, which is largely considered a formality. The lack of a formal oversight of co-operative apartment houses by governmental authority means that the final decision of who gets in and who gets turned down is left to the personal judgment of the board, and there’s no telling who or what, large or small might pique their concerns.

Perhaps in part to the Byzantine vagaries of the co-op approval process, the fact is most of the new construction in New York these days are shiny, amenity-filled condo complexes catering to every possible whim. Pre-war co-ops may have liveried doormen and elevator operators, but they simply cannot compete with the state-of-the-art screening rooms, Pilates studios and indoor swimming pools many of the new condo buildings provide. And, no doubt, the spate of high profile condo purchases by financiers, tech moguls and entertainment heavy hitters in glamorous condo buildings only encourages others to follow suit. After all, even if stuffy co-op boards don’t want celebrity pixie dust sprinkled in their hallways, most other places do.

  1. Michael B. says:

    It should also be noted that both the purchase prices and monthly maintenance charges for co-ops are almost always lower — ofttimes, substantially lower — than the prices and monthly common charges of their condo counterparts. Another significant difference is that residents of co-ops are generally obligated to live in their apartments and abide by house rules, whereas condo owners can rent them out to virtually anyone they want and have much greater freedom when it comes to matters of apartment alterations, keeping pets, having house guests for long stays, playing loud music at all hours of the day and night, and overall, disregarding the sensibilities of their neighbors. To sum up, each type of apartment has its advantages and disadvantages — although the last few words of my previous sentence should indicate where I, in the end, come down on the subject. 🙂

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