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Good Neighbors Make Good Profits

In this heady market, where there seems to be no end in sight to how high real estate prices will go, some New Yorkers have found a way to raise the bar even farther. All they have to do, it seems, is knock on their neighbors' doors.

More than ever before, neighbors are teaming up to sell their apartments together - to buyers who plan to combine them - to take advantage of the growing number of people looking for larger spaces and willing to pay a premium for them.

While sometimes it is the homeowner who comes up with the idea, more often it is the broker who, with listing in hand, recruits other neighbors - upstairs, downstairs, next door or across the hall, and in some cases virtual strangers - to sell. "It's been a significant growing trend in just the last six to nine months," said Deanna Kory, a senior vice president for the Corcoran Group, who says she has worked on three combination sales on the Upper West Side in as many months. "It gives the sellers the opportunity to get more for their apartments."

Last year, 4.1 percent of all apartment sales were combinations, up from 2.9 percent in 2003 and 1.7 percent in 2000, according to calculations by Jonathan J. Miller, president of the real estate appraisal firm Miller Samuel, who says the numbers may be on the conservative side.

The combinations have grown in popularity because the city just doesn't have enough big apartments to meet the demand. "More families are staying in the city and not moving to suburbia, so they need more space, but it's harder to find or very expensive," said Jacky Teplitzky, an executive vice president at Prudential Douglas Elliman. Even those with the financial wherewithal seem to have more limited choices. "We have a glut of Wall Streeters with bonus money, and nothing to offer them," said Dennis Rano, another Douglas Elliman broker.

So when two apartments are joined, "the whole is greater than the sum of the parts," Mr. Miller said. "One plus one equals two and a half." But in extraordinary instances, it can be much more. At the storied San Remo on Central Park West, two-bedroom co-op apartments would typically sell in the low- to mid-$3 million range. (One on the sixth floor sold last March for $2.95 million, according to broker sales reports.) But two adjacent neighbors each stand to take in nearly twice that after listing their two-bedrooms along with a 4,000-square-foot three-bedroom being sold in an estate sale.

The three 10th-floor units - totaling 8,000 square feet, and with stunning park views - were put on the market at the end of last year for $23.5 million. That works out to $11.9 million for the estate apartment, and $5.65 million and $5.95 million for the two-bedrooms, each around 2,000 square feet, according to the listing information from Stribling Private Brokerage.

Less than four weeks after the apartments went on the market, a Russian-born financier, Leonard Blavatnik, signed a contract to buy them, for close to the asking price, according to people familiar with the deal who asked not to be named because the sale is not yet final. Mr. Blavatnik is the chairman of Access Industries, which is heavily invested in oil, and last year was listed as No. 87 on the Forbes 400 list of the wealthiest Americans, with an estimated net worth of nearly $2 billion.

Carl and Jane Ekstein, who own one of the two-bedrooms being sold, said they have long fantasized about selling with their neighbor. "This was an opportunity of a lifetime," said Mrs. Ekstein, herself a real estate broker with Warburg Realty Partnership. The couple declined to discuss specifics about the pending sale, because it is being reviewed by the co-op board.

Indeed, all parties can clearly benefit from joint sales - even on a much smaller scale. Many buyers are finding it less expensive to combine two or more smaller units than to buy one large apartment (assuming they can even find one), and the sellers who can provide this much-needed space are often handed top dollar. "You can get around 10 or 20 percent more" than selling singly, Ms. Kory said, "and even up to 30 percent, depending on what is being sold."

Mr. Miller explained that in New York City "value increases in general on a square-foot basis as you assemble more contiguous space."



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