Every other week, we’ll highlight a deal to show you what title insurance costs, as well as what happens behind the scenes to streamline the closing process.
The vaccine is here, and there’s at least a perception that things are starting to stabilize. With that comes a revived interest in commercial assets in Manhattan and the opportunity to find some value-add opportunities. One deal in Tribeca had two very attractive qualities:
- The lots were to be delivered vacant
- The lots were zoned for both commercial and residential uses
This deal highlighted the value of due diligence.
The Deal
Purchase of vacant lots in Tribeca:
New York County (Acquisition of commercial assets for $18 million with $9 million in financing)
Fee Policy: $56,111
Loan Policy: $7,637
Title Fees: $1,000+
NYS Transfer Tax: $117,000
NYC Transfer Tax: $472,500
Mortgage Tax: $252,000
County Recording Fees: $1,000+
Title Grade: N/A
Cornerstone Insight
Many purchasers don’t understand the value of the due diligence that a good title company can provide. We are often the forgotten asset. In many cases, professionals don’t know how to engage with their title company.
Purchasing vacant land is a perfect example of this, and the current zoning doesn’t always tell the full story. Deed restrictions can prevent a developer from building what they want to build on it. For example, there was one situation where a developer planned to build a multi-family property, only to find out that the deed restricted an owner from building anything that was not a community or religious facility. A good title company could have discovered that restriction early in the process and saved the potential purchaser time and money.
If you have any questions about surveys or title insurance, or if you would like to discuss an upcoming or potential transaction, please contact us.
