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Marketproof New Development organizes new development condo (and co-op) buildings into three separate groups, each representing a stage in the lifecycle of a building: pipeline, sponsor sale, and resale.
Definition: Pipeline Buildings are being planned or built and have submitted an offering plan to state regulators. They are not yet selling units.
This phase begins when a building’s Sponsor makes it known that the building will be a condo. They do this by submitting an offering plan to state regulators. This filing officially kicks-off the beginning of a condos life.
The Pipeline phase spans the planning and development of the project. A building remains in the Pipeline phase until it’s offering plan is accepted and sales start.
Definition: Sponsor Buildings have an accepted offering plan and are controlled by the Sponsor. In this stage, the Sponsor has more control over the building than the unit owners.
The Sponsor Sale stage begins when the offering plan is accepted and sales start.
Marketproof selectively excludes buildings that have had an offering plan accepted, but for various reasons (construction delays, financing complications, market conditions, switched to renting, and others) don’t start selling.
During this stage, the Sponsor controls the condo board and the operations of the building.
This phase ends either five years after the first sale, when all (or nearly all) of the units are sold, or the Sponsor gives up control of the board to the owners.
Definition: Resale Buildings have been largely or completed sold out and the Sponsor has transferred control to the unit owners.
This phase begins when the Sponsor Sale phase ends and the owners assume control of the building.
During this phase the Sponsor may still own units, but the owners now control the condo board.
Additionally, sales are no longer conducted primarily by the Sponsor’s selling agent. Now, owners select the agent they wish to work with and units can be more redily resold.
Marketproof New Development has many tools that enable people to search buildings, inventory, and market conditions at each stage highlighted above. For more information go to marketproof.com/new-development.
Photo courtesy of 550 Vanderbilt in Prospect Heights, Brooklyn.