Developments go rental — not just in Rahway

Informative story in Sunday’s New York Times about condo projects turning to rentals, namely the state law that says after 75 percent of units are sold, “management shifts control to a homeowners’ association.”

It’s definitely worth a read, and particularly timely and relevant in Rahway. Apparently, it’s not uncommon in this market to go from condo to rental:

Developers often decide to switch from condo to rental, or vice versa, depending on which way the market is turning. Mr. Stolar said that he was aware of several condo developers who were contemplating the switch at buildings where sales are going slowly — or are even stalled — right now. And he isn’t the only market watcher to see this as an issue for a number of builders.

Switching to rentals is “a way to create cash flow,” he said, “and the rental market is still strong” compared with the condominium market.

Not only have two projects originally planned as condos shifted to rentals this year, but I’ve been asked a few times whether Sky View at Carriage City Plaza is converting to rentals. Not likely. While individual unit owners can rent their apartments (and several units have been purchased by the same owner, by my count), Silcon Inc. would have to seek approval from the Redevelopment Agency to amend the redevelopment agreement. And I’ve heard nothing to even hint that such a move would be sought — much less gain approval.

With 209 units in Sky View, 75 percent of the building would be 157 units. By my count, almost three dozen units officially have sold and appeared in property transactions, but I’ve heard that as many as 65 percent of the units have closed.

Happy Thanksgiving!