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March 8, 2023

Homebuyers in New York City may be presented with the opportunity to purchase a “sponsor unit,” a type of property unique to New York City real estate.[1] At the most basic level, “a sponsor unit is an apartment that has never been sold” before.[2] However, this term can have a different meaning depending on whether the unit is in a condo or co-op building.[3] Before choosing to do so, buyers should understand what sponsor units are, along with the advantages and disadvantages of purchasing one.

In a condo building, a sponsor unit is being sold directly by the developer.[4] Sometimes these are units in a brand-new building, or they may be units that the developer itself rented out.[5]  For many NYC homebuyers, the opportunity to purchase a unit that has never been lived in is a huge bonus.[6] However, in the competitive NYC real estate market, condo sponsor units may even be sold before the building is completed.[7]

In a co-op building, sponsor units are either being sold by the original owner or have been converted from a rental by the co-op corporation.[8] In either circumstance, co-op sponsor units are often in original condition meaning a buyer may need to make significant renovations.[9] Purchasing a co-op sponsor units may mean you’re not beholden to the same rules as shareholders in the co-op, including the sometimes-burdensome board approval process.[10] However, there may be significantly higher closing costs and more complicated legal issues.[11] Before purchasing a co-op sponsor unit, be sure to have an experienced real estate attorney view all the materials in the transaction.[12]


[1] Erika Riley, What Is a Sponsor Unit in NYC Real Estate?, Street Easy, (July 28, 2021), https://streeteasy.com/blog/what-is-a-sponsor-unit/#ib-toc-anchor-1.

[2] Id.

[3] Id.

[4] Hannah Frishberg, What Is a Sponsor Unit and Why Does It Matter?, Brownstoner, (July 8, 2016), https://www.brownstoner.com/real-estate-market/sponsor-unit-co-op-building-definition-mortgage/


[6] Riley, supra note 1.

[7] Id.

[8] Id.

[9] Victoria Alexander, What Is a Sponsor Unit?, Realty Collective , (June 22, 2020), https://realtycollective.com/what-is-a-sponsor-unit-2/

[10] Id.

[11] Frishberg, supra note 4.

[12] Alexander, supra note 9.