Issue 105 – Combining Apartments for Greater Resale Value — When 1+1=3

Who hasn’t dreamed of having an extra room in their home? For some, that dream can become a reality by strategically buying two units and combining them into a larger living space.

This approach particularly appeals to the many people who love their current building and apartment. Buying a connecting unit — to either side, above, or below — can be incredibly beneficial because the owners can remain in their beloved residence while expanding their square footage. It allows them to capitalize on the place they’ve called home in creating a more expansive footprint.

Just imagine: Buying an adjoining unit means not having to change your commute or leave your memories behind. Your very identity might well be engrained in the dwelling. It also means avoiding the hassle of searching for another place to buy, dealing with the timing of selling an apartment to buy a bigger one elsewhere, and (importantly) enduring another stressful board interview! Adding onto your apartment is the most seamless way to increase precious living space with minimal disruption and change.

Of course, the above assumes a connecting unit is or will become available. Another, likely easier, option is to buy two units together in a new development in the preconstruction stage. This way, you can view the floorplans before the build-out has begun and discuss how best to combine the units with the developer. Namely, you can make the finishes consistent throughout, and the developer can ensure the plumbing and gas lines are efficiently integrated.

Whichever way you go about combining two units, there are a few significant drawbacks to keep in mind. A primary concern should be whether the size of the combined space will have enough value to justify this endeavor. You want to be sure the value is both immediate and increases over time so you can get a solid ROI when it is time to sell, even if that won’t happen for a decade.

For example, combining units might deprive the space of two highly desirable qualities: abundant natural light and impressive views. Or it might result in an awkward layout (more on this below). This value assessment can be complex when you hope to remain in your preferred building, but a place on, say, the third floor that doesn’t hold value would not be prudent.

Large entertaining and living spaces with sizable bedrooms that feel comfortable garner the most value. Specific examples include a great room with 13 to 28 feet of frontage, a luxurious primary bedroom with dual bathrooms, and a chef’s kitchen that becomes the heart of the home. The ultimate win? Integrating two corner units with panoramic views.

Other factors to consider before embarking on this endeavor include financing, building and city regulations, demolition and construction costs, and tax liabilities. You should also assess whether a precedent exists in your building, especially if it is a co-op. If not, doing a combination can be challenging and frustrating, causing much stress and expense. Because of “wet-over-dry” rules, you might be unable to add a bathroom or move the kitchen where you want. In addition, buildings may say that they will allow something only to reverse course after you’ve purchased the second unit.

An essential preliminary step is consulting with an architect and developing a firm plan. Do you want to add a smaller unit to an existing large one? According to a recent article in Brick Underground, duplexing up or down might prove more difficult because it involves building a new staircase requiring structural changes. Many boards will not approve this large-scale work.

You should avoid ending up with a Frankenstein apartment, meaning one that is put together haphazardly with no natural flow. A big no-no is a random hallway or weird entry that doesn’t fit into the fuller space. Ditto an apartment that feels like a maze, where you can’t tell which way to go.

Another potential pitfall is that unless you file with the city as a single-family residence, meaning just one permit for the entire space, the carrying cost can be slightly higher than you’d prefer because you are incorporating an additional unit into your original space.

Finally, although it is wonderful to avoid the general upheaval of moving, the labor and construction fees can be exorbitant, notably if you have updated your present apartment and the add-on unit may have done some renovations along the way. Labor fees can really become a factor if the condition of the apartment is not on the same level. It can be even more expensive if the combination requires plumbing upgrades and matching the flooring and finishers, some of which may have been discontinued. It gets even more complicated when you must file plans with the DOB and deal with your building’s architectural requirements, such as knocking down support walls or creating a duplex.

The ultimate advice is to do your due diligence. Always and proactively read the alteration agreement with a fine-tooth comb, looking for rules that would preclude completing your combination. Find out ahead of time if the building is supportive of this type of change. Ask any neighbors who have undergone this kind of renovation.

One additional note: Depending on the scope of work, you may have to move into a short-term rental and put items into storage, or at least have limited use of your everyday space, for a period.

The overarching goal is cohesion throughout, making every area as functional and aesthetically pleasing as possible. The rooms should be right-sized and have a clear purpose—is it a bedroom or a study? They also need to be carefully organized, or your home will feel discombobulated.

The bottom line is that combining two — or even three! — units can be a massive boon for anyone interested in increasing living space and resale value if they know what to look out for and what to avoid. This single step can create an architectural masterpiece and a genuinely unique home.

Issue 122 – Foreign Demand Re-Emerges as Luxury Buyers Underwrite Political Risk

As we head into summer, we are seeing a very notable resurgence of international buyers entering the New York market — and frankly, in a way we haven’t seen in years.

Let’s explore why.

Historically, global capital gravitates toward stability, discretion, and internationally recognized assets. In New York City, that typically translates to park-facing residences, trophy properties, and globally recognizable “name-brand” buildings. These include Aman, Four Seasons, Related developments, and legacy Park Avenue or Central Park South product with strong service infrastructure and long-term value preservation.

Right now, buyers are looking for quality, security, and assets that feel insulated in uncertain times. NYC, despite all the headlines, remains a strong, long-term store of value internationally.

When there is instability abroad, New York City benefits. It offers legal transparency, deep liquidity, world-class education, finance, culture, and healthcare — and a real estate market that, while imperfect, is still well understood around the world.

What’s different now is that buyers are not necessarily purchasing because they think New York is “hot.” They are buying because New York is established. That is an important distinction: the capital is less speculative and more preservation-oriented. For many international families, a New York apartment is part lifestyle asset, part hedge, part legacy planning.

The headlines about wealthy buyers fleeing New York City are often too simplistic. Yes, some buyers have moved capital to Florida, Texas, or other lower-tax markets. But that does not mean New York has lost its global relevance.

The newly announced pied-a-terre/second-home tax in New York targets luxury second homes valued at $5 million or more, with the goal of creating an annual surcharge on non-primary residences. This proposal is certainly something international buyers are paying attention to, though it remains to be seen if this will impact continued investment. Rather than eliminating foreign demand, the tax likely makes buyers more selective, becoming part of the broader cost-of-ownership analysis alongside the mansion tax, carrying costs, and currency exposure. It may create pause around marginal purchases, but for a trophy asset, it won’t stop the buyer. It simply raises the bar for what feels worth owning.

The concern is less the dollar amount itself and more the perception. International buyers are highly sensitive to whether a market feels welcoming, predictable, and stable. Policy often moves perception before it moves fundamentals.

We’re consistently seeing foreign buyers generally gravitate toward turnkey product. The appetite for renovation or operational complexity is far lower than it once was. Buyers want ease, service, security, and a property that immediately translates internationally, both from a branding and lifestyle standpoint. For these global buyers, New York remains one of the few carrying both emotional and financial prestige.

Enter: Japanese buyers. The Real Deal recently reported a massive resurgence in Japanese capital, providing a lifeline to aging multifamily walk-ups. “Japan-linked firms have acquired at least $2.1 billion worth of New York City property since the start of 2024, according to analysis by Okada & Company and TRD Data,” the piece details.

This surge is driven by a stark yield gap: With low interest rates at home, Japanese buyers can borrow cheaply in Japan to acquire higher-yielding assets, a strategy supercharged by domestic tax incentives for multi-family purchases.

We are also seeing diversifying residential demand from Australian, Brazilian, Taiwanese, and Western Europe buyers. Eastern European activity is still highly selective compared to prior cycles, but international demand as a whole has undeniably re-entered the market. The usual suspects — such as Central Park South, Tribeca, Billionaire’s Row, and select Downtown properties — remain the primary anchors.

Target price points for these foreign investors vary by country of origin and the purchase’s purpose, with the most active international demand falling into clear segments:.

The serious lifestyle buyer ($3M to $7M): Typically targets a strong two or three bedrooms in a premier building, prioritizing service, security, and an easy lock-and-leave lifestyle.

The wealth-preservation buyer ($7M to $15M+): Focuses heavily on blue-chip locations — Central Park, Fifth Avenue, Park Avenue, Tribeca, Billionaires’ Row — or globally recognized branded residences.

The ultra-high-net-worth buyer: Prioritizes the asset above any price point, focusing on scarcity, pedigree, privacy, views, service, and long-term relevance. They are not asking, “Is this affordable?” They are asking, “Will this matter 10 years from now?”

Today’s foreign buyer is much more disciplined. They want turnkey and certainty. They want building quality, service quality, financial stability, and a residence that translates globally.

The biggest shift is that foreign buyers are not chasing the market — they are underwriting it. They are asking better questions: What are the monthly carrying costs? Who is the resale audience? How strong is the building financially? How liquid is this asset? Does this location hold value in multiple cycles?

Overall, cultural nuance matters more than ever. Buyers are underwriting not just the apartment, but NYC itself.

Five years ago, there was still more appetite for optionality — buyers were more willing to consider renovation, new development premiums, or speculative upside.

On the Japanese side specifically, what I’m noticing is a renewed comfort level with NYC real estate as a legacy asset class. The buyers I’m seeing tend to be highly analytical, long-term focused, and extremely quality-driven. They’re not chasing hype — they’re buying permanence.

The Brazilian and Australian buyers we’re seeing tend to be incredibly lifestyle-oriented while still highly aware of long-term value, whereas many Western European buyers continue to prioritize pedigree buildings, architecture, privacy, and stability. Taiwanese buyers similarly appear very focused on security, quality, and established global positioning.

For foreign investors, New York City still represents something very specific: legal stability, cultural prestige, liquidity, access, education, healthcare, and global identity. The buyers I’m seeing are not ignoring the headlines. They are simply looking past them when the asset is strong enough.

New York is no longer a market where everything trades easily. It is a precision market. But for the right property — the right building, the right view, the right service, the right location — foreign buyers are still very much there.

The common denominator across almost all of them is that they are buying selectively — but decisively — when the product feels globally relevant.

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