Turning Space Into Revenue: Amazon, Rooftops, and Amenity Rentals for NYC Buildings

First, the Amazon Question

Many boards assume Amazon will pay to put lockers in their lobby. Usually the money flows the other way. When Amazon launched its Hub apartment lockers, reporting put the cost to owners at roughly $10,000 to $20,000 per locker system. Amazon’s Key for Business, which lets drivers open a building’s front door, is installed free. The Associated Press reported that Amazon sometimes added a $100 gift card for whoever let the installer in, but that isn’t building income. Both can be worthwhile amenities that cut package theft and lobby clutter. Budget for them as amenities, not as revenue.

Where Amazon Does Pay: Hub Delivery

Amazon Hub Delivery pays local businesses to receive packages each morning and deliver them nearby, typically 20 to 50 a day. Amazon has advertised annual earnings in the tens of thousands of dollars for top partners, though it says that isn’t typical. Axios estimated the pay at roughly $2.50 per package at launch. Partners need a registered business, insurance, secure storage, delivery seven days a week, and room for a 24-foot box truck to unload. That rules out most residential boards. But a building with ground-floor commercial space may find it makes a retail tenant more viable, or attracts a new one.

Rooftop Telecom Leases

The classic rooftop income stream is a lease to a wireless carrier. Habitat Magazine has reported typical license fees of $2,000 to $5,000 a month, under long-term agreements. Demand isn’t what it once was: smaller “small cell” equipment is changing how carriers build out. Before signing, have the managing agent, building counsel, and a board representative review the lease. Include structural review, roof-warranty protection, and removal obligations. NYC also requires owners of larger buildings to report cell antenna income to the Department of Finance, and that income can raise the building’s assessed value.

Create an Amenity Space That Pays for Itself

An underused basement room, old storage area, or tired party room can become a bookable resident lounge, co-working room, fitness studio, or event space. The simplest model charges residents a reservation or membership fee, which keeps the space in the community and covers upkeep and cleaning. Some buildings go further and list spaces on platforms such as Peerspace for outside meetings, photo shoots, and small events. Here, co-ops and condos differ. In a co-op, the corporation owns the building, so renting common space is easier to arrange. In a condo, each owner holds a share of the common elements, which can make outside rentals legally difficult. Either way, check the governing documents, insurance, house rules, and security before opening the doors to non-residents.

Garages and Storage

Many NYC buildings signed long garage contracts during the conversion boom, and as those expire, boards can renegotiate or re-tender. Counsel interviewed by The Cooperator recommends keeping new garage leases to no more than 10 years. Boards can also choose whether to offer resident discounts. Storage is another proven earner. Bike rooms and storage lockers can be run by the building, or by an outside operator that installs them and shares a portion of the rent.

Co-ops: Mind the 80/20 Rule

Under Section 216 of the Internal Revenue Code, a co-op traditionally had to receive at least 80% of its income from shareholders. Otherwise, shareholders could lose their deductions for mortgage interest and real estate taxes. Money from outsiders, such as commercial rent, carrier leases, and outside event rentals, counts toward the 20%. Fees paid by shareholders themselves, such as storage and amenity fees, generally don’t. A 2007 change added alternative tests. A co-op can also qualify if at least 80% of its square footage is used by shareholders as residences, or if at least 90% of its spending goes to shareholders’ benefit. Have the building’s accountant confirm which test you meet before adding a major outside income stream.

Where to Start

Walk the building with your managing agent and list every underused space: roof, basement rooms, storage, garage, and ground-floor frontage. For each, estimate the income, the startup cost, and the extra wear, staffing, and insurance it brings. Run every option past building counsel and the accountant, especially in co-ops. Start with income that keeps residents’ quality of life intact. Done well, a new revenue stream can fund capital projects, build reserves, and ease pressure on maintenance increases.

• Are Amazon Delivery Lockers Your Apartment Building’s Next Amenity? — Marketplace
• Amazon Touts Hub Lockers as Way for Multifamily to Deal With Deliveries — Bisnow
• Amazon’s Mission: Getting a ‘Key’ to Your Apartment Building — Associated Press via OPB
• Amazon Launches Local Business Delivery Network — Axios
• Amazon Hub Delivery — Amazon
• How to Negotiate a Rooftop Cell Tower Lease — Habitat Magazine
• Must My Building Report Cell-Phone Antenna Income? — Habitat Magazine
• The Clubhouse Rules: Renting Out Common Areas — The Cooperator
• Giving Your Parking Garage a New Lease on Life — The Cooperator
• New Legislation Changes the Game: No More 80/20? — The Cooperator

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