Seth Weissman’s Urban Standard Capital (USC) has launched a
$100 million investment platform to buy condo units from developers who need to
hit the 15 percent sales threshold to effectuate condo conversions.
Initially targeted at
the New York City market, the fund would buy enough units at a market discount
to enable the sponsor to turn the remaining units into rentals until the market
recovers.
The platform plays to the New York State condo conversion
laws where, in order to convert an occupied rental into a condo, a developer
needs 51 percent of the current occupants to buy their apartments.
“This change makes converting an occupied rental practically impossible,” said Weissman. “Our platform provides a solution to sponsors who need to generate cash flow today and want to maintain optionality to sell units at higher prices in the future.”