Two New York condominium developments have begun accepting down payments from credit cards, and more projects plan to do the same.
American Express cards will be accepted for down payments at a second condominium development in Manhattan later this year and at two new condominium developments scheduled to open next year, bringing to four the number of residential buildings accepting the card for down payments.
At least 10 purchasers of units have used the card to charge down payments ranging from $50,000 to $300,000, or 10 percent of the purchases prices, at the 478-unit Atelier Condominiums luxury development since mid-September, according to Daphne Mayer Viders, a spokeswoman for The Moinian Group, developer of the four properties.
A similar response is expected later this year when the Moinian Group begins marketing the 283 luxury condominiums in The Downtown Club, an Art Deco landmarked building, she said. "And two other residential buildings that will be coming on the market in 2007 should also have the program in place," she added.
"We also will be building our residential portfolio in Los Angeles and hope to be able to roll this out there as well in 2008," she explained.
The Moinian Group, which has 20 million square feet of residential, commercial, industrial, retail and hotel properties throughout the U.S. and abroad, more than half of that in Manhattan, owns major property in Orlando, but, Viders said, "this is in the very early stages of development, so there will be nothing there until 2009."
Two years ago the firm began accepting American Express cards for rent payments at its rental residential properties in Manhattan, which now number six, and the success of this led to the expansion of American Express card acceptance to down payments, she noted.
Condominium purchasers, said Viders, seem to be using their American Express cards either to build up airline mileage or to delay having to actually put up the money for their down payments.
"If you charge the 10th day of the month, then you have 20 days to be able to organize the remaining funds in your account so that you're able to pay," she pointed out. "Otherwise you have to have those funds upfront. So this allows the card holder almost three extra weeks."
On its Web site for Atelier, the Moinian Group promotes this card use as "the down payment with the upside" by enabling condo purchasers to "earn valuable rewards by charging your down payment to your eligible, enrolled American Express card."
An American Express spokesperson said the company does not break down card usage by purposes and thus did not know how many times the card had been used for down payments. But the spokesperson did say that American Express had received inquiries from and was in discussions with other residential real estate developers in New York and other cities about accepting the card for down payments. Many of them already accept American Express cards for their rental properties, she pointed out.
Viders said that she knows that American Express is "going to make sure the process is in place before rolling this out with other developers. They have found this program to be very successful as we have. And now we're thrilled to be a part of it and hope to watch it grow."