Manhattan lofts running the bulls on Greene Street, large + pricey

2 Soho lofts took a week to contract just under $6 million

Two large lofts on the same Soho block closed a day apart at very similar price points and very similar trajectories: the “2,964 sq ft” loft #4B at 54 Greene Street sold for $5,600,375 on June 20 and the “3,300 sq ft” loft #4E at 33 Greene Street sold for $5.75mm the next day; the first took eight days to get into contract last November, the second only seven days in April; the first is on the southeast corner at Broome Street, the second is on the northwest corner at Grand Street. They are found on different sheets on my Master List of downtown Manhattan loft sales because the first was a new development sale, the second a resale.

The buyers of each respective Soho loft probably didn’t consider buying the other one, as the contract dates were six months apart, but they closed almost simultaneously, so they look like they were competitors, kinda sorta. Let’s compare!

You would be forgiven for thinking the two footprints are identical, as the floor plans are very similar:

nearly square, this one claims to be 10% larger (thx Compass)

more open floor plan (slightly), only 4 columns (Halstead images; thx)

how much do the cosmetics matter?

Your mileage may vary, but these lofts have a very different feel to me. The larger one is darker, more flat, more sleek; the smaller is bright (white and blonde), textured (cast-iron columns, tin ceilings), and (to some) a more ‘classic’ loft.

personally, I hate dropped ceilings in a loft, + love columns with character

“classic”, ’nuff said? (please don’t say “boring”)

I’m guessing that architects love the 33 Greene Street look, while designers appreciate the canvass at 54 Greene Street.

pulling out all the stops (+ millwork)

“let it be”

 

“dramatic” (with much nicer columns than in the great room)

stark (not quite Starck), with no distractions

From a marketing perspective, the buyer pool for the dressed-to-the-nines loft at 33 Greene Street started with folks who love the woodwork, and pretty much ended there. The buyer pool for 54 Greene Street included everyone who loves classic lofts, including folks who prefer to dress up a loft a-la-33-Greene.

dollars vary, only slightly

You’ve seen the clearing prices and the sizes, so you know that the (slightly) smaller loft at 54 Greene Street sold (slightly) higher than 33 Greene Street on a price-per-foot basis, but not in absolute dollars; the $5.75mm for 33 Greene Street comes to $1,742/ft versus $5,600,375 and $1,901/ft at 54 Greene Street. At this dollar level and scale of space, the difference seems more ‘noise’ than science. (Though it is consistent with my buyer-pool comment, that is hardly proof.)

More interesting, still, is that 33 Greene Street is a coop (maintenance of $3,102/mo), while 54 Greene Street is a condo (common charges and real estate taxes of $1,151/mo and $1,523/mo, respectively), so the condo monthlies are a good 15% more ‘affordable’. Neither offers a doorman, while the condo has the additional amenity of a common roof deck.

Data-driven clients of mine who ask about the difference between coops and condos in Manhattan know that my go-to answer always includes my go-to guy, aka The Miller. The Miller authored a study with the Furman Center at NYU (10+ years ago) that concluded that a hypothetical condo substantially identical to a hypothetical coop would be about 8.8% more valuable (i.e, have a higher market value) because it is a condo.

Here, the price-per-foot difference is 9%, before considering the difference in monthlies. Sweet!

market conditions vary over time (d’oh) but buyers are … weird

As I noted, both of the lofts went to contract extremely quickly, but that’s not the whole story. You know the contract dates were November 2016 and April 2017, but you don’t know (unless you scanned the StreetEasy links closely) is that the coop at 33 Greene Street failed to sell for four months last year despite being offered for the last half of that marketing period at $5.3mm. Thirteen months later, it sold (quickly!) for $5.75mm.

Of course, you might wonder about the buyer pool in early 2016 compared to the buyer pool in early 2017. Don’t … the StreetEasy Manhattan Price Index (my favorite single-number proxy of the overall market) is essentially flat in that period, up about 1%.

There is another explanation, but it does not speak well of buyers. Are buyers so incapable of ‘seeing’ a loft that the mis-value a paint job??

I’m not going to spoil your fun with the photos in this post, but if you click on the link for the unsuccessful marketing effort last year you might well be blinded by the colors. And the mirrors. (Click through to the kid’s room, please.)

The sellers were obviously in love with their decor, so much so as to name drop the noted designer and the architect. So much so that they over-priced the loft considerably, starting at $6.1mm until they dropped to $5.3mm after two months. There’s the same dropped ceilings, the same dark floor, the same wood columns in part of the loft, the same kitchen, the same millwork, and the same mirror and tiling in the master bath.

But what was vibrantly colored is now muted. The mirrored columns in the great room are now stripped. And the (wallpaper?) in the master bath has been removed. What does it cost to repaint a “3,300 sq ft” loft these days? If it is $20,000 I’d be surprised.

The folks who just paid $5.75mm could have bought the loft for $5.3mm a year earlier (as could anyone else) and, as they likely did not like the color scheme on the walls and the mirrors on some of the columns, could have spent a small amount to go white.

Kudos to the sellers for realizing (being persuaded?) that a color intervention was required, and to their (new) agents for realizing that a price increase would work.

A Bronx cheer to anyone who saw it in Spring 2016 and couldn’t get a quote on a paint job. And don’t talk to me about an efficient market ….

 

 

Posted in loft neighborhoods soho Tagged with: , , , , , , , , , , ,

American Felt loft at 114 East 13 St sells for 6th time at a gain

there are no guarantees in Manhattan residential real estate, of course, of course

Timing may not be the proverbial “everything” when it comes to Manhattan lofts, but it surely helps to have it on your side. The “1,164 sq ft” East Village loft #8A at 114 East 13 Street (the American Felt Building) is noteworthy for having a long string of history (StreetEasy goes back six sales, to 1996, and I’ve added a seventh to my Master List off Manhattan loft sales from the Corcoran listings system, from 1993), the more so because each sale is at a higher price than the one before it. I expect that if I find another Manhattan loft with an unbroken string like this it will catch my eye.

Don’t be fooled, kids: not everyone makes money in Manhattan residential real estate! If there is a single question asked by my buyer clients more often than any other, it is “will this loft increase in value?“. The structure of my unfailing response is too often viewed as unhelpful, as I always flip the question to talk about the likelihood of the loft holding its place in the market, such that if the overall market goes down, the loft is more or less (I specify) likely to go down by a similar degree, or if the overall market goes up, the loft is more or less (I specify) likely to go up by a similar degree.

Not to get too distracted, but the more or less part depends on whether the loft is in a fully mature market (therefore, very likely to match the overall market) or is in a developing market that has greater upside and therefore greater downside than the overall market. And, still avoiding (much) distraction, I caution buyers about projecting gains without considering how long they expect to own, as it is usually difficult to realize a significant gain if you only plan to own for a short time.

I’m not going to try to reassess whether the (near) East Village loft market was more ‘mature’ or more ‘developing’ at each of these stages by comparing market niche numbers to the overall market, but these numbers show stable increases in value, though there is at least one long-ish period in which the loft was not tested against the market (and we know what happened in that intervening period):

June 21, 2017 $2.2mm
July 16, 2015 $2.05mm
April 25, 2006 $1.33mm
Sept 12, 2003 $944,500
Feb 26, 1999 $540k
Nov 15, 1996 $335k
May 4, 1993 $254k
1984? ??

The first step (or two) in that string is unknown, except that somebody bought this loft in the original offering (1984, from our listings system) and that original owner either held it for nine years or sold it to the 1993 seller in between. If the string had no additional steps after starting in 1984, the seven owners held on to the loft for nine, three, three, four, three, nine, and two years, or not quite five years on average.

For fun, let’s show this table with the percentage increase in value for loft #8A and with the index value from the StreetEasy Price Index for the month of each sale (I’d really love to use December 1984 as the baseline, but I don’t have a price for the original purchaser and the StreetEasy Price Index only goes back to January 1995), and then the percentage change in the StreetEasy Price Index, from one #8A sale to the next:

#8A increase Index value Index increase
June 2017 7.3% $1,000,791* 3.7%
July 2015 54% $965,161 24%
April  2006 41% $776,107 42%
Sept  2003 75% $546,302 67%
Feb 1999 62% $326,957 29%
Nov 1996 32% $253,603

(*April 2017 is most recent Index value)

So many winners here! Note that there are more winners on the #8A side, as all owners but one out-performed the overall Manhattan residential real estate market, at least as measured by the StreetEasy Price Index. Two sets of owners outperformed the market by a factor of two,: the folks who bought in 1996 and sold in 1999  and their successors-plus-one who bought in April 2006 and sold in July 2015.

To be precise, the recent sellers also outperformed the market by a factor of two, but the scale is small enough (and the time frame short enough) that there’s likely a fair amount of ‘noise’ in that math (though 7.3% is just a hair less than twice 3.7%).

I started this exercise without knowing how it would turn out, and I must say the numbers are fascinating; this exercise was so much fun I need a cigarette.

(Pause.) (YMMV)

On a long-term basis, looking only at the ‘objective’ market facts (clearing prices) since 1996 compared to the Index values, the overall Manhattan market is up nearly four-fold ($1,000,791 is 3.95 times $253,603) while the market value of #8A from 1996 to the present is up … (wait for it) … more than 6.5 times. In other words numbers, loft #8A has outperformed the market over the last 20 years by more than 50%. Remember my comment above the first table wondering whether the (near) East Village loft market was more a ‘mature’ or more a ‘developing’ market? Over 20 years, this single loft is consistent with a ‘developing’ market. As I say, this is just for fun … or else I’d have to consider why the second largest period of ‘over-performance’ by loft #8A was more recent than I’d have expected for the (near) East Village loft market to still be ‘developing’ (2006 to 2015).

Enough playing around ….

 but but but (informed Manhattan Loft Guy readers are sputtering), the recent sellers didn’t really make money

If you’ve stayed with me this far, and if you’ve read “profit” posts before, you see the problem with the recent sellers having sold for $2.2mm what they bought for $2.05mm 23 months earlier. That apparent gain of $150,000 was reduced by expenses before they considered their tax bill. We show the listing fee was 6%, so that’s $132,000 off … city and state ‘transfer taxes’ take another 1.825% (or $40,150) and they paid the so-called ‘mansion tax’ on the front end (1% = $20,500).

Big Picture expenses reduce that $150,000 apparent gain to a loss of $42,650. Remember my other admonition to buyer clients? (Hint: it is usually difficult to realize a significant gain if you only plan to own for a short time.) Here’s another demonstration of that, with a loft that appreciated at twice the rate of the overall market, but over too short a time to avoid red ink.

That tells me that something happened to this 2015-buyer-turned-2017-seller (change of job or family status, return to Canada??) because he apparently was willing to lose even more money (his ask was $2.15mm, only $100,000 more than he paid). At this price point, I’d expect most owners to be loss-averse, and willing to hold on to a loft more than two years rather than sell it and realize a loss. Stuff (life!) happens, and then we die. Or, then we sell a Manhattan loft. Sellers don’t have to answer to me, though they may be second-guessed in a (benign?) trying-to-figure-out-what-happened way. No harm in that, I hope.

a lovely loft, with many plusses, nets over $1,800/ft on a block that is more convenient than charming

I’m impressed that this loft sold at this price on this block. I bike this block quite often and (no offense, but …) this is far from the most charming block just east of Broadway. But it is hard by the subways at Union Square (and the other stuff at Union Square), plus the restaurants in the (central) East Village, in the Village proper (University Place), and in lower Flatiron. Great location! Just not a great block.

But the space exceeds expectations. Small for a loft at just under 1,200 sq ft, the sense of space is enhanced by “[s]oaring 12′ ceilings and enormous south and east-facing windows … [with] unobstructed city views and clear blue sky”, as the broker would babble. The kitchen is big enough for a loft twice this size, at 12+ ft x 8+ ft. The finishes are many and well done: including “open chef’s kitchen with Miele, Sub-Zero and Viking appliances”, “custom wood cabinetry, 12 inch baseboard moldings, refinished rich hardwood floors, … a large chef’s pantry and wall of closets in the bedroom”, an “en-suite Waterworks bathroom with a steam shower and Japanese soaking tub can be accessed from both the bedroom and a second doorway just for guests” (well, if you live there you can use that doorway, I hope).

All of the foregoing has been present for a while (at least since 2003, per our listing system, and possibly longer), while these are claimed to be both “[b]rand new upgrades [and] to the highest standard”:

custom sun shades, motorized blackout shades, sunshield protective UV coating on every window, custom A/C covers, aluminum grill radiator covers powder coated to match wall color, recessed lighting with dimmers and built in speakers throughout.

(Add the cost of the new upgrades to the net loss, alas.)

The photos are consistent with quality; as usual, the kitchen provides the money shot:

“chef’s kitchen”, of course, here big enough for 2 chefs (thx DE, for the pic)

Let’s count the balcony as worth 50% of the value of the interior space. That gets us to $1,827/ft for the entire loft.

a good-sized balcony, with views a long way east and south from 8 floor up

Pretty nice package, especially on this block, no?

the hazards of over-zealous babbling

This is more than a quibble: with a lovely loft like this, overstatement can be a turn-off. Hard to figure that happened with a buyer who paid $50,000 over ask, but still … this is not a loft that “can easily be reconfigured to suit your needs to include a home office, another bedroom or bathroom, additional closets and more” (my bold).

a perfect 1BR 1ba layout becomes challenging for a 2nd BR or 2nd bath, even for more closets; but yeah, put a home office (desk) anywhere you think it fits

That laundry corner could be a bath, but more likely a powder room than a full bath, unless you went overboard and re-did the other bath as well to accommodate ($$$$$). You can click on the alternate floor plan yourself, but if you add that bedroom, you (a) close off the kitchen from the loft and from that window, (b) reduce the (formerly) ‘great room’ by a third, squeezing dining, seating, and balcony access into 300 sq ft, and (c) and reduce the appreciation of ‘space’ on entry into the loft by more than a couple of steps. Then look at the lovely bathroom, sacrificed on the altar of the alternative floor plan to add a second full bath (there goes the Japanese soaking [or any other] tub). $$$$$!

Buy it and do what you want, of course. But you’ll ruin it so much that if you really need two bedrooms … buy another loft. (The additional bathroom is more a money issue than a loft aesthetic issue; go ahed and burn your bucks if you have ’em.) My free advice (you get what you pay for!): if you need to put that second bedroom in, take down the wall before you re-sell, or you may just break the streak of owners-who-sold-for-more-than-they-paid. In the meantime, buy an armoire.

Posted in loft neighborhoods east villag Tagged with: , , , , , , , , , , , , ,

hints in the floor plan of a life lived in 32 West 20 Street loft as it sells after 23 years

the Manhattan loft  Floor Plan Whisperer says … not a conventional plan, is it?

If you owned an (officially, as always) “2,000 sq ft” loft that was nearly square, with two exposures and plumbing risers in multiple locations, you could draw many different configurations of lines on the footprint to maximize its utility for your life. Certainly, you could imagine an en suite bath; possibly, multiple bedrooms. You would not, if you had choices and resources, put a half bath through a locked door across a shared hallway, as the most convenient middle of the night toilet or morning tooth-brushing station. But if you’d owned it since way back in the day, and that was the way it always was, and it is was quiet and private and suited your lifestyle just fine ThankYouVeryMuch, you might deliver a floor plan like this to a new owner, as the longtime owners of the “2,000 sq ft” Manhattan loft #8S at 32 West 20 Street did a month ago:

this is a very old school residential loft layout, likely close to original from the residential conversion (thx Douglas Elliman, for the images)

Judging from the fact that the alternative floor plan suggested in the listing retains that corridor on the west wall, and only moves (and expands) the plumbing rooms so that they attach to the living space, I will bet you a quarter that the corridor provides fire escape access for other units on the 8th floor (see the open window on the floor plan?), and must be retained. (Other wise it would be fully integrated into loft #8S, right?)

The key to my hypothesis about the floor plan is that the recent sellers lived here for a long time. You can’t tell from StreetEasy, but our listing system shows that this loft last sold in 1994 (for $343,000, as you know if you checked my Master List of Manhattan loft sales under $6mm). That, and the fact that this is a residential loft that has been ‘improved’ to the slightest extent possible consistent with having a closed room in which to sleep.

Put the big plumbing rooms (kitchen, full bath) where the greatest number of plumbing risers seems to be, leave the rest as open as possible by putting the single real wall in a corner that leaves a vast rectangle for the (truly) great room with eight windows. And give the denizens of that bedroom quick access to a half bath through the fire corridor. Put the only closets in the space along the entry wall, so that once you clear that corner (about five steps after entering) the rest of the loft opens up before you.

This is the sort of ‘design’ non-architects did on a napkin, back in the day when lofts were not nearly so fashionable, when loft owners typically didn’t have banker money (for purchases, for renovations, for anything else), and when much of the appeal for loft dwellers in those days was more about ‘space’ than about finishes. (Trust me: I paid $134/ft for a larger loft than #8S the year before these recent sellers bought at $171/ft, six short blocks due north of this loft.)

The broker babble and the photos amply support that this was and remains a basic loft, minimally improved over the years. The babble is enthusiastic about “opportunities”, with nary a word about finishes. Even the kitchen photo is all about volume and scale, not materials or appliances:

a kitchen built for entertaining at scale (16’6″ x 15′!), while being open to the loft over the sink and around the frig

Even the kitchen floor tile reminds me of loft kitchens built in the 1980s: sturdy, cheap, and easy to clean, rather than ‘designer’.

Do you see the column in the kitchen photo? You need to squint a bit, and may need to scroll up to the floor plan to see exactly where it is; then you will notice it easily. This column, like two of the other three, is treated here as a neutral element, painted white to disappear as much as possible (this one blends in quite well!), with what was (probably not coincidentally) the least expensive treatment for sealing and finishing cast iron columns. (And note on the floor plan that one of the four columns is hidden completely, in a closet.) I will bet you a quarter that this loft gets a gut renovation that includes a natural finish on the columns. (Imagine that column in the third listing photo as a focal point.)

Finally, note the complete absence of the bath and a half in the babble and photos. They won’t survive long in their current condition, which is part of the “endless opportunities”, indeed as part of “the ideal backdrop for your own unique character”.

The new owners paid $2.53mm for the opportunity (say, $1,260/ft), and will put another … what … $500,000 into it to bring it up to 2017 standards. Still, not bad for a prime Flatiron location and all those south-facing windows. (And the columns; please do the columns!!)

they’re not the only long-time owners

The past sales history for this smallish building (18 units, converted to residential living in 1970, and to a coop in 1978, according to our listings system) is fascinating. The entire 4th floor of this building sold seven months ago, again as an ‘opportunity’ (indeed, as “a rare opportunity for a buyer with vision”). It took 17 months, price drops of $1.75mm, and a further discount of $735,000, to get to contract, but it did sell. No need to have pictured or described the kitchen or baths, as any buyer with vision would gut them. This floor was “owned continuously for 35 years”, taking us back to almost to the creation of the coop . (In comparison, the #8S owners were relative interlopers, having bought in 1994.)

There’s a tiny loft on what looks like the northeast corner of the 8th floor, probably carved out in the 1970s. It was described when it sold in 2014 as “open raw loft space” with “original wood floors” and a sleep loft. Gonna guess that this was a writer’s space back in the 1970s, sold as raw in 2014 for someone to gut (they preserved that flooring, I hope, I hope!).

The north loft on the 6th floor sold in 2012 in “industrial chic” condition with a snazzy kitchen and features like in-wall sound wiring (for $2.199mm, if you check the “#6N” deed record). You can’t tell from StreetEasy, alas, but those 2012 sellers bought that loft in “triple mint” condition in 1999, according to our listing system (for $1.05mm, for completists).

You have to click on the listing photos for the entire 5th floor when it sold in March 2012 (for $3.8mm): you will see what was then “the home and work space of one of New York’s most influential figures in fiber arts, [and was offered as a] … sprawling canvas … ready for your architect to craft the perfect space for your luxury home”. I wonder if that fiber artist was an original owner, as we have no record in our listings system of any prior sale.

I can’t swear that our listings system is complete going back to Olden Times, but it appears as though the 2nd floor owners have been in the building since 1994 and the 3rd floor owners since 1997 (we might have missed a private sale, but if it was a listing from a similar firm in the 1990s, we’d probably have it).

And it appears that no part of the 7th floor has sold since 1996, but StreetEasy knows that the north loft on the 7th floor was offered for sale from Fall 2014 to Fall 2015 without selling. That listing is worth a few clicks as it is completely dressed to the nines, “designed as a showcase for entertaining and an extensive contemporary art collection”, with Venetian plaster walls, central air, “a Craig Roberts Associates designed lighting system that can switch modes effortlessly providing both ambient and specific art lights”, and more! The photos show a loft that is as unlike loft #8S as you could imagine. That tasteful owner also owned for 20 years, but had different needs and a different lifestyle, certainly.

Net net, there has been extraordinarily little turnover in this 18-unit coop since the 1990s, and evidence that at least some long-time owners were, as we now say, creatives. Which brings me back to the recent #8S sellers.

Manhattan Loft Voyeur will not be shown on this channel

I am always curious about where long-time loft owners go after they sell a loft they’ve lived in for a long time. Alas (and alack), the deed record for the #8S sellers gives a law firm as their notice address, instead of a new residence address. You can sometimes find folks like this (by doing a name search in Property Shark, for example) but I wasn’t able to scratch my curiosity about whether folks who lived so long in such classic loft space (happily, if the decor in the photos is any indication) got tired of loft living and moved to Scarsdale, or cashed big royalty checks and bought an uber-loft in Tribeca, or wanted structure in their lives and bought an ‘apartment’ on the Upper East Side.

No dice. But having obsessed over the floor plan and listing photos I can confidently predict that they are cosmopolitans, without children. Having engaged The Google, I did learn more about each of them, but that is stuff less suited for a real estate blog like Manhattan Loft Guy than it is for another medium. Like Facebook. Like Manhattan Loft Guy’s Facebook page. Look there for a more voyeuristic angle on the #8S loft sellers, but not for a day or two.

The Math and The Feet

Finally, let me close (briefly!) on a Manhattan Loft Guy fetish. We have loft #8S at “2,000 sq ft” in our listings system, perhaps because that is a figure found in the Schedule A in the original 1978 prospectus. StreetEasy has the same figure on the listing but, curiously, Douglas Elliman has no square footage figure on their website. The floor plan, however, does have room dimensions (and a footnote on the DE site about not taking that stuff seriously), which suggest that the complete south loft interior space is about 46′ x 39′.

Hmmm … do that math (yeah, yeah, they caution you against doing the math) and you get 1,794 sq ft. But this is just the rectangle, and includes that winding fire corridor of 39′ (say, 3′ wide, or 117 sq ft). So if whoever did the interior measurements is right (I’d put my money on that person, though I only bet a quarter at a time), the interior space for this unit is about 1,677 sq ft, which is not terribly close to 2,000.

I wish there were a standard way that loft listings reported square footage, so that everyone could figure out a fudge factor. I wish there were a trade association to which agents at all the major firms had to belong that had the authority to set rules for stuff like this, as REALTOR® boards do everywhere else in America.

Oh wait … REBNY has such authority, and the means.

But REBNY lacks the will to help consumers in this manner. Instead, it employs lawyers to craft disclaimers so that REBNY members don’t get sued by consumers over stuff like this. (See my November 2, 2010, the square footage dilemma: REBNY “leads” by protecting brokers, not buyers.) Sigh ….

Posted in loft neighborhoods flatiron Tagged with: , , , , , , , , , ,

are Manhattan loft sellers more in sync with buyers this year? not really …

original loft asking prices are working with about the same frequency

To my mind, an asking price for a Manhattan loft is successful when it generates an offer from a qualified buyer that leads to a contract (more successful if it leads to multiple offers, but stick with basic success here, please). Another way to look at it is that owners of lofts that sell off an original asking price have done a better job of anticipating what buyers are willing to spend than owners who have to discount the ask to get a deal, and a much better job than owners who don’t succeed in attracting offers from qualified buyers. I believe that in periods of changing market conditions (especially, in markets in which buyers have relatively more leverage) it can be difficult for sellers to accurately predict where the buyer pool will bite. (Hence, my reference to sellers “chasing the market down” in 2009 in my June 16, Manhattan Loft Lab at 40 West 15 Street features building record, failed marketing, opposite styles, + more!.)

I have suspected that recent loft sellers were relatively better at predicting the sweet spot for the buyer pool than a year ago, but when I tested that surmise against my data … no deal! One the one hand, it hurts to be wrong; on the other hand, it is nice to have a data-driven answer to the question.

If you’ve spent any time with the Google Drive spreadsheet on which I share my Master List of downtown Manhattan loft sales below $6mm, you see a lot of color. For present purposes, the key color is blue, which I use in the original asking price column to highlight downtown Manhattan lofts that sold with no reduction in asking price. I generally add the colors after I do a update to the Master List, eyeballing the two asking price columns (“I” and “L”) for matches. (If I were a spreadsheet ninja I could automate that, I assume, but … never mind.)

The physical act of adding a fill color to a column, and then seeing how much that column fills with the fill color, can be startling, with sequences of five or six blue lines in a row. Hence, when I just completed a large update to my master List of downtown Manhattan loft sales, I added (what felt like) a lot of blue.

Going back to March 1, 2017, I counted this weekend 62 blue original asking prices, 44 not blue (or 58% of completed downtown Manhattan loft sales succeeded without reducing the original asking price). I looked at a similar period in 2016 and found … (wait for it) … a 55% success rate (86 blue, 70 not blue). (There were more data points in my 2016 set mostly because it takes a while for deeds to be filed, and if I ran this exercise again in a month for the period March 1 to June 8 there will be more data points, as more deeds reflecting closings in this period are filed.)

First reaction: hmmm, that’s hardly different. Second reaction: humility, with a touch of gratitude that I now have a factual basis regarding a previous suspicion.

Because I tend to get a bit anal about such data (once I look for it, ahem), I ran the same count for the same period in 2015: 97 blue listings and 41 not blue (or a success rate for original asking prices for downtown Manhattan lofts of 70%). Now that’s different! You don’t want such limited data sets (these are still small numbers, after all) to lead to rigid conclusions, but these limited sets imply that owners of Manhattan lofts were more successful at predicting where buyers were in a 100-day period two years ago than in the same 100-day period last year and this year.

Fascinating (to me)! But Your Mileage May Vary.

you may prefer different numbers to measure the Manhattan real estate market

I don’t compute the discount that successful Manhattan loft owners needed from asking prices to get deals that closed, but if you want to, the data points are in the Master List. Or, you could look to The Miller for the overall Manhattan market, as he reports the listing discount from last asking prices in his quarterly reports (for example, for the First Quarter of 2017, which shows 4.2%, compared to the prior quarter of 5.3%, and compared to the same quarter in the prior year of 2.1%). Good stuff, from a much larger data set, collected a bit more rigorously and comprehensively (ha!) than my Master List, measuring a slightly different thing.

More data is good!

the Manhattan loft marketing efforts that are invisible in this analysis

Permit me to make a distinction about what closed sales data reveals that is both obvious (in that it is definitional) and subtle (in that it is easy to overlook): closed sales data is not the only data in any market, as it omits, most specifically, Manhattan lofts that are offered for sale but not yet sold in any given period, as well as Manhattan lofts that were offered for sale and then taken off the market without selling.

The selection bias in my blue / not blue Column “L” as a window on how well loft owners predict buyer price interest is that it considers only loft owners who originally (blue) or eventually (not blue) predicted what asking price would lead to a deal that closed. In other words, only successful owners (those who become “sellers”) are included.

My excuse is that I am not as interested in those data points and that they are, in any event, relatively more difficult for me to track. (So much data, so little time ….)

about the colors …

The Master List also has green fill in Column “F” to highlight lofts that sold above the last asking price, yellow fill in Column “I” to highlight lofts that sold at the last asking price, some reddish fill in Column “K” to indicate if the loft found a contract within 30 days of the original listing date, and even a purplish fill in Column “B” if I have blogged here about that loft sale. You will also find the occasional red numbers (not fill, but character colors) which i have started to use to highlight a number that I think is weird, or interesting, or otherwise special; though I leave it to you to figure out why in each particular.

Posted in market trends Tagged with: , , , ,

Manhattan Loft Lab at 40 West 15 Street features building record, failed marketing, opposite styles, + more!

the good news: loft #6A overcame an awkward footprint to sell over ask

The sale a month ago of the “2,100 sq ft” Manhattan loft #6A at 40 West 15 Street is a fascinating window on a variety of topics, but let’s start with the one that made these ballsy sellers happy: to market on March 17 at $3.125mm, they found a buyer (several buyers?) and a contract by April 5, and closed on May 15 at $3.325mm, two million dollars more than they paid eight years earlier.

Here’s what they sold: a ‘no details overlooked’ renovation that features ‘painstakingly restored wood beam ceilings’ and that, with a renowned architect’s help, made lemonade out of lemons by “embody[ing] the essence of open-plan large living while incorporating separation and privacy in its well-designed floor plan”. The market fact that this space is worth 20% more than any loft in this longtime Flatiron coop is confirmation that The Market will love design and finishes that are quintessentially loft-y, even if the “well-designed floor plan” means the two sleeping areas lack windows.

the oh-so-lofty loft, with kitchen way in the distance, restored beams, exposed piping, 12 windows of north light and views (Empire State!) (photos by Sotheby’s, obvs)

Here’s that well-designed floor plan (and awkward footprint):

the 2 (or 3) BRs have skylights, the master + BR/library have glass doors (as in the LR photo above), but light back there has to be an issue

That 900+ sq ft great room is a (errr …) great space for entertaining, with crowds no doubt drifting north to the 12 windows (Empire State Building + lots of sky), with this beautiful large kitchen in the corner:

’nuff said: “top-of-the-line appliances, Caesarstone counters and stainless steel rolling breakfast bar”

If people tell you that “no one” will buy a loft with bedrooms that lack windows, you show them this loft (and you’re welcome).

one neighbor is jealous

When loft #6A was brought to market on Green Beer Day at $3.125mm, the other folks on this top floor were three months past a marketing campaign that was brief (at two months) and unsuccessful (at $2.95mm). The “2,000 sq ft” next door loft #6B is beautiful in its own right, but so different in style as to be surprising that the pair are in the same building. From the ceilings to the flooring, this is more a black and white palette, with a single cast iron column establishing classic loft cred.

and all that south light! (pix here by Douglas Elliman)

The footprint is equally awkward as next door, but all but the guests sleep with windows:

again, lemons from lemonade

Will the success of #6A bring these folks back to market? Maybe, but the #6B owners were on from October 21 to December 22 at $2.95mm, well more time than it took #6A to negotiate multiple offers into a contract $375,000 higher. For present purposes, what is striking to me is the quick success of one loft and the lack of success of the other. Well, that, and the fact that these two lofts look completely different.

there is yet another Manhattan loft style on display, 3 floors below

The folks who sold loft #3B just two months before #6B came to market made very different style choices than in either  of the top floor lofts and they ‘solved’ the awkward footprint in a very different way than the #6B owner. That, and they were successful at a price that should have given the #6B owner confidence in coming to market at $2.95mm.

They squeezed a lot of utility into (almost exactly) the same awkward footprint on the third floor:

no kids here, just a master + 2 guest rooms, plus den, plus LR, plus office (not the same grand entertaining space as upstairs, IMHO)

This layout manifestly worked for the woman who just sold it (possibly, for the new owners as well), but the result leaves a reduced sense of ‘volume’ than in either of the 6th floor lofts.

looking through the LR to the DR and the light, with the den on the left

Volume or no, this loft flew off the shelf: to market on June 3 last year, in contract two weeks later, and closed on August 25 at the full ask of $2.75mm.

Hence, the #6B owner came to market two months later at ‘only’ a $200,000 premium to this sale, with arguably a more sophisticated layout and renovation and the light from being three floors higher (with One WTC views). I, like him, no doubt, am surprised that #6B couldn’t negotiate to a deal after this neighboring sale.

On a side note, however awkward I find the “B” line footprint to be, it is evidently rather flexible. Look at the very different locations for the kitchens in the two “B” floor plans above. This is just one reason why I love real Manhattan lofts (in buildings converted from prior non-residential use, mostly in the 1970s and 1980s). Take virtually any “apartment” building, or most (if not all) newly built “loft” buildings, and the kitchen on one floor is going to be in exactly the same place (and likely be exactly the same size and configuration) as in every other unit in the same line. And if there were the possibility of different layouts, the coop or condo board is likely to rely on a no-wet-over-dry rule to prevent much variation. (Rant, ended, resuming ….)

sellers well rewarded, and they earned it

Did you forget that italicized number in the opening sentence, way up top? The folks who just sold loft #6A above ask at $3.325mm bought the loft on June 23, 2009 for … (you can guess, by now) … (but let’s draw it out) … $1.3mm. That full listing history is a doozy, and merits a column for annotations:

Mar 17, 2008 new to market $2.195mm 1Q08 was The Peak of the Manhattan market to that time
Sept 4 contract took too long to get to contract (11 days before Lehman’s bankruptcy filing)
Oct 21 back on market $1.795mm buyer got cold feet, or lost wealth as stocks dropped??
Oct 22 $1.85mm seller re-thinks pricing, mis-perceiving the peril
Oct 24 hiatus more re-thinking??
Dec 5 back on market $1.795mm “chasing the market down” was a saying back then
Feb 4, 2009 $1.695mm still chasing …
April 15 contract seller relieved, but unsure if deal will close, right?
June 23 sold $1.3mm 40% off original asking price

(I’ve ignored the week in February that StreetEasy has the loft “sold”, as it didn’t; this was likely someone hitting the wrong key in updating a listing.)

If you weren’t paying close enough attention to the overall Manhattan real estate market at that time, you won’t remember qhite how traumatic the market was after the stock market (and “lending” institutions) reacted to Lehman’s bankruptcy filing on September 15, 2008. Properties that closed in that first calendar quarter of 2008 recorded the highest prices ever observed in Manhattan (at a time when the overall US residential real estate market had been in a trough for five or more quarters), and by the end of the third quarter the bottom fell out. Having blogged it in real time (check the archives!) I know there was a constant tension faced by buyers as 2009 played out: yes, prices are down, but how much lower will they go?? The only sellers who closed in the six months after Lehman were sellers who really needed to sell; everyone else went to the sidelines.

Of course I have no idea what the June 2009 seller was really thinking, or what pressures (financial or otherwise) he may have been under then. But there’s a good chance that his real estate life wasn’t too bad, compared to many other early 2009 sellers. You won’t find it on StreetEasy, but our listing system shows when he bought loft #6A (because it was a Corcoran sale). The 2009-seller-at-$1.3mm bought the loft way back in 1990 for $551,511. So unless he over-leveraged this asset in between, he actually walked away from that June 2009 closing table with a pile of cash and a capital gains tax bill. (Because of our listings system’s rich history, this sort of detail is included on my Master List of Manhattan residential loft sales under $6mm.)

Buyers who went into contract when the recent #6A sellers did (mid-April 2009) were, indeed, ballsy. They didn’t know it, but what I came to call The Thaw was just beginning. (I didn’t know it either.)  Hence, they just sold at $3.325mm the loft that they bought eight years earlier for $1.3mm. Sure, they did a lovely upgrade in between, spending more than a few bucks, but if any loft owners ‘earned’ a huge return, it is these June-2009-buyers-turned-May-2017-sellers.

I actually talked about these sellers as buyers, as an aside in a blog post about the next sale in the building, when loft #5A sold for $1.8mm nine months later. My April 9, 2010, closing at 40 West 15 St relieves ALL shareholders, is worth a read, if I do say so myself. If you lack the patience at the end of this long blog post, here’s the last sentence:

In a rational market, #5A and #6A would not trade 9 months apart with a half-million dollar gap.

Point being, there was no rational market in those days.

Posted in loft neighborhoods flatiron Tagged with: , , , , , , , , , , , , , , ,

65 West 13th Street loft owner bites bullet, finally becomes seller

how to make an impression on The Market

The mark of a serious seller is forcefully responding to negative feedback. The guy who just sold the beautiful “2,341 sq ft” Manhattan loft #3H at 65 West 13 Street (The Greenwich) probably had to swallow pretty hard, but was committed enough to find a market clearing price that he did this:

Jan 10 new to market $4.9mm
Feb 7 $4.3mm
Mar 9 contract
April 25 sold $4.2mm

He hadn’t quite been ready or willing five-plus years ago:

Sept 11, 2011 new to market $4mm
Jan 5, 2012 $3.95mm
Feb 17 off the market

Back in the day, dropping the price $50,000 didn’t do anything to generate buyer interest. (A 1% drop is purely cosmetic, as there are relatively few buyers who’d be interested in ‘the high 3s’ who wouldn’t consider an offering at 4-dot-zero.) Back in the day, he didn’t want to sell enough to compromise. (Presumably, he didn’t need to sell at all.)

Different story this year: instead of waiting four months to make a tiny change, four weeks was enough this time to prompt a 12% drop, and he then was willing to talk to the buyers who emerged, and cut another $100,000 off his ask to get a deal done. Contract signed within two months, 14% off the original ask, or $700,000 off.

Damn nice work.

when you love to renovate a loft, you might do it twice

The broker babble is very enthusiastic about the condition of this loft, but to my (jaundiced!) eye not over the top. There’s enough detail (so much detail!) that I suspect this loft is truly one that needs to be seen to be fully appreciated. (I won’t attempt to paraphrase, but it is worth a full read.)

Finishes aside (and they are wonderful), the scale of the place impresses me. The main part of the loft is wide (roughly 25′ by 78′) and ceilings are 13 feet. (It would be a classic long-and-narrow, but for the stub of the entrance gallery.) The ceilings are high enough that the front windows are ten feet. There’s not much in terms of structural elements that is classically loft-like (the one obvious column in the great room has been encased, alas, and if the three N-S supports are interesting, it’s not evident any longer), but the volume speaks for itself.

that’s a pretty big 2BR footprint, with a long gallery (foyer) to build suspense

 

can you feel the suspense??

If I had to quibble (force of habit!), I’d make two points about the layout: you have to walk through the dining area (around the table) to get to the great room and there’s no closet in the second bedroom (unless I’m mis-reading some squiggles on the floor plan). But otherwise, this is a wonderful layout.

I read the two sets of babble and the two floor plans as the same, with the exception of two triangles. The new triangle is the newly configured kitchen island, and looking at that photo reveals a new backsplash but not new cabinets or appliances. The old triangle was a raised platform in a corner of the great room on the circa 2012 floor plan. Otherwise, the walls and rooms seem the same, down to the Venetian plaster that was omitted from the more recent babbling, although the flooring is different (and runs E-W instead of N-S).

the present kitchen

the former kitchen (different lighting, too)

I love it when Manhattan loft owners spend money on things that increase their enjoyment of a loft, which is the way I interpret the change in the kitchen island. On paper, it’s not much of a change to take a rectangular island and make it a triangle, but these things aren’t constructed (or demolished) on paper. Personally, I love it as a triangle, more than the former island. And it makes me wonder if that was the first choice that was made, with the decision to replace the flooring one that followed. But I digress ….

Venetian plaster is another element that is ‘worth it’ if it makes you happy as a loft-dweller. The folks I’ve worked with who’ve done it have spent a fortune to do it, and they love the result. Not everyone appreciates it, however, so it is not necessarily an improvement that a seller can expect that a buyer will value enough to pay a premium for.

The texture is apparent (and lovely, to these old eyes) in the foyer / gallery photo above. But I wonder how the dining area looks in real life, after seeing this psychedelic lighting effect:

dramatic effect, but to your liking??

I really hope that the striations in this photo are the result of the camera interplay with a (too-bright?) light fixture ….

some loft owners are tempted to overly value their improvements aesthetic choices

The more care (and money) that a loft owner puts into renovations, and the more subtle the improvements, the greater the temptation will be for that owner to expect the general buyer pool to over-pay for the renovations. It’s not true in all cases, but the temptation is real, and it can result in a listing history like the one above in 2011-12.

Whether or not that was part of the owner’s thinking back in the day, it was certainly not the case this year, as demonstrated by the prompt $600,000 price drop. To repeat: damn nice work.

if only there were a nearby comparable loft from 2011 and/or more recent …

I’m curious about the degree to which loft #3H was over-priced the first go-round, and about how its market-clearing recent price fits into the overall market. Of course, neither life nor the overall Manhattan loft market is perfect, but sometimes things turn out pretty well. In this case, there is a single loft in the same building that has some significant similarities to loft #3H and that was on the market around the same time as #3H, twice. The 2-bedroom + 2-bath “1,898 sq ft” loft #8D is not a perfect comp, by any means, but it is good enough to talk about.

We’ll have to consider the appropriate adjustments for utility (#3H has the additional utility of a dining area and den, with lots of storage; #8D has an interior office), view (#3H doesn’t have one, while #8D is “flooded with western light”), and condition (a dicey element to compare based only on babble and photos), but the parallels are intriguing:

April 28, 2011 new to market $2.9mm
May 11 contract
July 6 sold $3,182,500
(pause)
June 9, 2016 new to market $4.25mm
June 27 contract
Aug 22 sold $4.175mm

It may help to compare and contrast these two in dollar per foot terms:

July 6, 2011 #8D clearing price $1,676/ft
Sept 11, 2011 #3H unsuccessful $1,709/ft
Aug 22, 2016 #8D clearing $2,200/ft
Jan 10, 2017 #3H unsuccessful $2,093/ft
April 25, 2017 #3H clearing $1,794/ft

Both times that #3H came to market the most recent 2-bedroom closed sale in the building was #8D, so whether the #3H owner considered the two lofts truly comparable or not, The Market was quite aware of the then-recent sales.

With the cold-hearted and clear-eyed perspective of hindsight, The Market absolutely thought that #8D was worth more on a $/ft basis in Round One, with #8D selling quickly above ask and #3H sitting for five months at a tiny premium (2%); while the contrast was even worse in Round Two, when both found clearing prices, but #8D was at a significant premium to #3H (23%!), before adjusting for time (fortunately, for purposes of this exercise, the StreetEasy Price Index for the overall Manhattan residential real estate market was up less than 1% from August 2016 to April 2017). In other words, The Market knew that #8D had cleared at $2,200/ft before #3D came out at $2,093/ft, and wouldn’t even grant #3H the $1,837/ft it was asking after that big price drop in February this year.

Like the #3H owner, I would not have predicted this, but we are all now in a position to rationalize the results. First, I take it as a given that #3H is in significantly better condition than #8D, though I concede that the superior quality of finishes in #3H may be a matter of taste (and that Venetian plaster is hard to value!).

Second, the light! As bright as #3D may be with those ten-foot southern windows, it can’t compare to open western light five stories higher that clears nearby buildings. For buyers who must have light, #3H can’t compete, and some of those buyers may ‘overpay’ for that feature. Third, for buyers who have to have two bedrooms, each loft will satisfy, but one could be bought for fewer dollars (price per foot notwithstanding); and for buyers who’d stash a second kid in a dark room, #8D can satisfy, while #3H cannot.

Fourth, while the layout of #3H is (to me) luxurious, and a far superior footprint for entertaining and grand living, for others the ‘extra’ space that makes it luxurious also makes it (somewhat) more expensive in absolute dollars. That parenthetical is carrying a lot of water, as the facts developed that the extra space in #3H was worth exactly $25,000 more than #8D (after netting out the light), but that detail wasn’t specifically proven until eight months after #8D sold.

The more I look at this, the more surprised I am. It is good that I am still young enough to learn ….

Posted in loft neighborhoods village Tagged with: , , , , , , , , ,

funny math as first Sterling Mason loft resells: when is a $200k gain not a gain?

(you know this) when your transaction costs far exceed the ‘gain’

The suburbanites who just sold the first loft to resell at the uber-loft conversion slash new construction Sterling Mason, the “2,042 sq ft” Manhattan loft #4A at 71 Laight Street, really wanted to sell (or they don’t care so much about money). Having bought in September 2015 for $3.9mm, they sold on April 28 for $4.1mm. In arithmetic, that’s a gain of $200,000. In real estate, however, the computation is not a simple A – B = C, because it cost them something to get that $4.1mm.

Reduce that $4.1mm by the big ticket expenses of $205,000 sales fee (5%, per our listing system) and again by the New York Star and New York City transfer taxes of $74,825 (1.825%) and they are slightly below water, at $3,820,175 in proceeds received at closing. But wait … there’s more! Figure they paid for title insurance when they bought (at least 0.6%, or $23,400) and Property Shark shows that they took a $1.4mm mortgage, on which the mortgage recording tax would have been $75,075 (at 1.925%). The new big ticket math (before round trip lawyer’s fees, condo fees, miscellaneous fees; did they have to make a capital contribution on purchase??) looks like this:

A = $4.1mm less $205,000 less $74,825 = 3,820,175

minus

B = $3.9mm plus $23,400 plus $75,075 = $3,998,475

equals

C = ($178,300)

In cash terms, they brought to the closing table to buy in 2015 (net of these expenses and the mortgage) $2,598,475 or so and got back at the closing table to sell in 2017 (net of those expenses, after paying the mortgage) $2,420,175 or so, realizing that loss of $178,300.

In other words, taking a hit of $178,300 was preferable to remaining an owner of loft #4A. How painful this was depends on what $178,300 means to them.

They didn’t set out to do this, of course:

Feb 3 new to market $4.5mm
Mar 7 $4.25mm
Mar 24 contract
April 28 sold $4.1mm

But the numbers are close enough that even a full-price sale at the discounted ask in March would have resulted in a net loss.

cold comfort is out-performing The Market

The owner’s financial hit aside, the loft appreciated in value over the time they owned it (that apparent $200,000 gain). From the time they bought (September 2015) to the time they sold (April 2017), the overall Manhattan residential real estate market, as measured by the StreetEasy Price Index, was up 2.39%. The $200k gain represents just over 5% of the purchase price. Congratulations!

But new development sales are fuzzy for these stats, as they typically have an abnormally long time between contract and closing compared to coop or condo resales. In this case, the StreetEasy history shows that loft #4A was already in contract by the time it hit public awareness in July 2014. If you looked back at the StreetEasy Price Index for September 2014, The Market was up 7.6%. This is just one of the ways that new development sales distort market stats.

neighbors may not appreciate the dirty laundry being aired

There is no question that the recent sale was an arm’s length transaction, one that is a specific market fact from which comparisons will be drawn. For neighbors, the #4A resale is a Bad Comp, most specifically in the “A” line. Click on the Past Sales tab for Sterling Mason on StreetEasy and you will see that two neighbors paid well more than the recent #4A sellers for their identical units (#3A was bought for $4,067,908 20 days before #4A was purchased, and #5A was bought for $4,276,650 two months later), while one on a lower floor (which would be expected to be worth less, at least to an appraiser) paid the same (#2A, bought at $3.9mm two weeks before).

If another similar unit in Sterling Mason were to come to market soon, that unit would face the headwinds that #4A cleared at (only) $4.1mm on April 28. Unless a buyer really wants to live in this building, it will be a while before the upstairs and downstairs neighbors will walk away from the closing table with meaningful (net) gains. Assuming, of course, that The Market is rational.

meanwhile, back in the loft …

The next “A” line buyer might really love the place. For a 33-unit condo, the amenity package is rich (per the building babble):

Library Lounge, Interior Courtyard, Private Fitness Room with Yoga & Exercise Studio, Children’s Playroom, Parking Garage, Private Storage, Bike Storage, Concierge, Doorman, Full-Time On-Premise Resident Manager

The amenities are priced accordingly, at $1.61/ft for common charges per month for loft #4A, with another $1.11/ft for real estate taxes.

The interior of the loft is consistent with its heritage and era: a Morris Adjami design, sold in the latest generation of Tribeca uber-lofts, with only the most proper proper names for appliances and materials. The coffered ceilings and cast-iron columns provide classic cred, and the layout (not quite a long-and-narrow, as the bedroom wing is much wider than the public wing) provides volume: “2,042 sq ft”, with only two bedrooms.

With all this deluxe luxe, it seems churlish to point out that the sense of volume is not enhanced by ceiling height, but … 9’6″ (ouch).

The “A” line is the smallest in the building, and appears not to have gotten the premium layout (note the window count in the floor plan). Other units are much larger, and seven neighbors paid more than $9mm to own here. As I said, the next “A” line buyer might really love the place, but the #4A data point will be a Bad Comp for a while.

a final note, courtesy of Mike Myers

I hit many of the new development points above in my March 27, Mike Myers doesn’t care about super luxury Tribeca loft market, because (money), featuring an even larger loss on a new development resale. But these paragraphs are pretty good, I think:

File this one under The New Development Market Is Different Than The Resale Market. This project (443 Greenwich Street) looked a lot better in the Fall of 2014 than it did two years later, or now. Perhaps the story is the simple one, oft repeated in the media in the last year: softness in the luxury market. After all, at least ten lofts were sold at 8-figure prices in this single project (a quick scan of the Past Sales tab on StreetEasy tells you that). Apparently, the supply of $10+ million buyers is finite. (Go figure.)

But I think there is another aspect of this (emphasis on I think): the new development Manhattan loft market is (I think) more susceptible to emotion-based swings than the resale loft market. (Call it herd mentality, if you prefer.) In part, this is a commodity thing.

Lofts tend to be sufficiently different from each other, even within the same building, that they can more fairly be given the over-used broker babble label “unique” than typical Manhattan “apartments”. Even lofts with the exact same footprint in mature residential loft buildings tend, over time to look very different from each other, as owners with different tastes and resources change. Not so for the four “A” line units at 443 Greenwich Street, all with the exact same “unparalleled combination of space, luxury finish, location, and privacy”, as the Sponsor Babble put it, on the exact same footprint.

Posted in loft neighborhoods tribeca Tagged with: , , , , ,

lily gilded, 161 Hudson Street loft sells after deep price cut

what a difference a million dollars can make

One way to measure the difference between the seven weeks that the “2,314 sq ft” Manhattan loft #2B at 161 Hudson Street spent on the market in the Spring of 2016 and the five weeks that it spent on the market in the Spring of 2017 is by time (seven being, you know, greater than five); another way is by asking prices ($5.75mm then being much greater than $4.95mm more recently); but the most significant difference is result, with the more recent marketing having succeeded in generating the contract that closed on May 24 at $4.8mm.

Only the insiders know what was going through the owners’ minds last year, but that brief marketing suggests that there just wasn’t any market response (perhaps, few showing appointments). It wouldn’t surprise me to learn that the owners blamed their 2016 agents for the lack of response, as they not only changed prices dramatically when they came back to market around the same time of the year this year, but they changed agents.

The happy result (for the former owners, recent sellers) is that they got a deal only 3% off their asking price. Almost a million bucks off the first ask of 2016, but who’s counting? And they got that deal after only 5 weeks on the market, and closed only 10 weeks after starting. It is hard to get a more successful asking price than that.

they bought a beautifully renovated Tribeca loft in 2013 and sold a very different beautifully renovated Tribeca loft in 2017

People with sufficient financial resources can adapt even a beautiful Tribeca loft any way that they like, of course. These recent sellers bought a “beautifully designed and renovated … Architect’s residence” in April 2013 for $3.7mm. That iteration featured “exquisite custom mahogany built-ins throughout, stunning walnut floors [… , a] chef’s kitchen … completely customized and featur[ing] Poggenpohl cabinetry, with SubZero and Miele appliances”, as well as custom closets, central air, and Crestron home automation. They made significant changes to the overall look and feel of the loft, and to that chef’s kitchen, probably none of which generated many additional dollars in value on resale.

When they sold last month, the loft was fairly (and enthusiastically) described as “perfectly renovated and light-filled […,] the epitome of chic downtown style[, e]xpertly blending the grand industrial scale of Tribecas best architecture with a warm material palette”, featuring “extensive built-ins, high ceilings, central HVAC”, an “entry hall … with a built-in bench crafted from vintage wood and painted diagonal wall panelling”, (the same) “monumentally scaled original columns [and] wide-plank Brazilian walnut flooring, [and new] beautifully crafted exposed copper pipe lighting, electric solar shades”, and a master suite “featuring walls clad in reclaimed wood planks, which are also repeated on the ceiling of the en-suite bath”.

The partly-old partly-new kitchen

features top of the line appliances including a Viking range and hood, and a Sub-Zero fridge. Integrated into the Poggenpohl cabinetry are a Miele dishwasher, microwave, and espresso/cappuccino machine, as well as a Gaggenau wine fridge and a roll-up door appliance garage. Open wood slab shelves provide additional storage and complement the handmade aesthetic of the white-glazed Dutch tiled walls and the encaustic tile floors.

It is impossible to say from the two sets of broker babble whether the coffee machine or appliance garage is new, but it appears from the photos that the Viking range and hood came with the loft in 2013 (uncredited in that babbling?), yet we know that the Poggenpohl quotient is much reduced and the overall look completely changed, without changing most appliances (at least) or the footprint.

full Poggenpohl with same lower cabinets, same counter, and (dare I say) restrained lighting (thanks Warburg, on all Before pix)

new tile work *everywhere*, new ceiling, and open shelves (thanks Compass, on all After pix)

Aside from the functionality change from upper cabinets to open shelves, these are cosmetic changes. A great many cosmetic changes, swapping out expensive well-crafted elements for different expensive well-crafted elements. (Whether the Poggenpohl color changed, I can’t say for sure; but it certainly looks from the cabinet contrast with the old white floor as though the recent sellers replaced the remaining cabinet fronts to bright white.) It’s a free country, and people with money are free to demolish lovely cabinets and tile work, and to replace those elements with a style that suits them. I just don’t see any added value here, from the 2013 kitchen to the 2017 kitchen.

I won’t beat this horse further, but will add two more pairs of Before and After photos, each involving very different aesthetic judgments and some money:

such dark materials! and a completely different lighting scheme

opposite angle, but same area … just completely different cosmetics, with “beautifully crafted exposed copper pipe lighting”

let’s call this lighting ‘dramatic’, from back in the day, in an otherwise conventional master suite

a different sort of idiosyncratic choice: “walls clad in reclaimed wood planks”

Just to highlight two elements in the After pair, above … I consider the copper lighting in the public area of the loft and the wood walls in the master suite to be Love It Or Hate It elements, in terms of appeal to the broad potential buyer pool. The sort of choices that the Conventional Wisdom strongly argues against if (a) resale value is a consideration the owners care about when they renovate, or (regardless) (b) the owners think they might want to sell within three or four years. And neither of these elements came cheap.

performance against The Market runs slightly in favor

If the StreetEasy Manhattan Price Index is the best single-number proxy for the overall Manhattan market (as I continue to think that it is), the overall Manhattan market is up 22% from April 2013 (when these sellers bought) to April 2017 (they sold in May, but April is the most recent month reflected in this iteration of the still-awkwardly-located chart; select “Manhattan (All)” and hover carefully!), having risen from $817,151 to $993,592.

That implies that had the 2013-buyers-turned-2017-sellers done nothing to the space other than keep it well maintained, the loft would have been worth more or less $4,514,000 when they sold it, instead of the $4.8mm observed value. That’s not a bad outcome!

It is, of course, impossible for an outsider to know what those folks paid for the wood-clad walls, all that new kitchen tiling (and demolition), and custom copper lighting, etc, etc, etc, but it is unlikely they spent as much as $300,000. But if their budget approached $300,000, the entire affair approaches break-even status compared to overall market expectations.

I would typically add here a comment along the lines of ‘it doesn’t matter so long as they got enjoyment out of the loft, and they evidently could afford it‘, but for one niggling fact: they were asking $5.75mm for the ‘upgraded’ loft in April and May of 2016. That suggests to me that they (or their first agent team) believed that their renovation added significant value to the loft. (The increase in the StreetEasy Price Index to April last year was only 20%, implying an ‘unimproved value to that point of more or less $4.44mm.)

It is inconceivable to me that they spent anywhere close to a million bucks doing the ‘improvements’, but that first asking price is evidence that somebody thought the loft had undergone a 7-figure improvement. Granted, they didn’t hold that belief for very long, but still ….

we’ve been to this corner of Hudson and Laight before

Because the Intertubes never forget, you can ready the post I wrote way back on May 28, 2013 when these recent sellers became buyers. The big story then (you’d have to see 161 Hudson Street loft to hope to know why it sold 53% above 2009, 9% above ask) was how brave that 2009-buyer-turned-2013-seller was in buying as The Thaw was beginning following the Nuclear Winter that chilled activity and dropped prices after Lehman filed for bankruptcy in September 2008. (Anyone remember those days??) A second story was that the loft had changed relatively little in an architectural sense, if not a cosmetic sense. The more things change ….

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Mike Myers doesn’t care about super luxury Tribeca loft market, because (money)

yes, Virginia, the rich are different from you and me

Lots of people, when faced with the choice to live in a newly purchased spectacular loft in Tribeca or losing well more than a million bucks by selling right away, would avoid the monetary loss and accept their fate by living in luxury, while awaiting a more propitious time to sell. But people who have to sell might not have that option, and people who don’t care about money … don’t care. I’d put Mike Myers in the latter rather than the former category, as exemplified by his noteworthy resale of the the “4,241 sq ft” oh-so-lovely oh-so-luxurious Manhattan loft #5A at 443 Greenwich Street.

Thus, I don’t think The Real Deal got it quite right last week:

Comedian Mike Myers can’t be laughing now. The “Austin Powers” star just sold his never-lived-in Tribeca condominium for a loss.

Not laughing, probably; not crying, certainly. He volunteered for this, beginning over two years ago:

Sept 29, 2014 new to market $14.25mm
Oct 9 contract
Der 6, 2016 bought $14,675,019
Jan 11, 2017 new to market $15mm
Feb 7 contract
March 16 sold $14mm

Obviously, this was a new development purchase. Obviously, in the 26 months between signing the contract and having to close, Myers changed his mind. Or maybe his accountant told him he needed to take a loss somewhere.

Obviously, he’d have lost money even if he had sold at his resale asking price of $15 million, as he was set to pay his agents (5%, according to our system) and city and state transfer taxes (1.825%). At the $14 million resale price, those transaction costs reduced his cash (increased his realized loss) by nearly a million ($955,500), to $1,630,519:

paid $14,675,019
received $14mm
commission ($700,000)
transfer taxes ($255,500)
net $13,044,500
loss (big picture) $1,630,519

That’s a lot to not laugh about, but remember: he volunteered.

he probably saw it coming (too late, of course)

A click or two from the Active Listings tab on the StreetEasy building page shows that the same loft on both the second and third floors took until at least November 2016 to get to contract (they haven’t closed yet), while the Past Sales tab shows many more sponsor discounts than full asking price sales, including the sad fact (for our Canadian comedian) that loft #4A didn’t find a contract that stuck until May 2016 and then sold in September 2016 for $13,753,000.

The writing, as they say, was on the wall, long before Myers finally bought #5A from the sponsor for $14,675,019 three months ago.

new development sales can be weird

File this one under The New Development Market Is Different Than The Resale Market. This project (443 Greenwich Street) looked a lot better in the Fall of 2014 than it did two years later, or now. Perhaps the story is the simple one, oft repeated in the media in the last year: softness in the luxury market. After all, at least ten lofts were sold at 8-figure prices in this single project (a quick scan of the Past Sales tab on StreetEasy tells you that). Apparently, the supply of $10+ million buyers is finite. (Go figure.)

But I think there is another aspect of this (emphasis on I think): the new development Manhattan loft market is (I think) more susceptible to emotion-based swings than the resale loft market. (Call it herd mentality, if you prefer.) In part, this is a commodity thing.

Lofts tend to be sufficiently different from each other, even within the same building, that they can more fairly be given the over-used broker babble label “unique” than typical Manhattan “apartments”. Even lofts with the exact same footprint in mature residential loft buildings tend, over time to look very different from each other, as owners with different tastes and resources change. Not so for the four “A” line units at 443 Greenwich Street, all with the exact same “unparalleled combination of space, luxury finish, location, and privacy”, as the Sponsor Babble put it, on the exact same footprint.

The only difference among them is whatever different angle of sun or rooftop the different floor heights might afford.

Sometimes the proverbial early bird gets the proverbial worm, and original (early to contract) buyers do better than original (later to contract) buyers. Not here, not for our Canadian. His October 2014 contract price was $922,019 more than the May 2016 contract price for the exact same unit, one floor below. At this dollar level, so many dollars (nearly a million) is only a difference of 6.3%. Still: $922,019 is a lot of dollars.

efficiency is in the eye of the beholder in Manhattan residential new development sales

Sponsors have tremendous advantages over buyers of new development properties. They are looking at the big picture (total sellout), but more critically, they know what demand is like, including what prices all buyers are willing to pay. I am very curious to see what the second and third floor “A” lofts go for. In contrast to our Canadian (again, $14,675,019 on a long ago contract) and loft #4A ($13,753,000 on a May 2016 contract), these two lofts didn’t find contracts that stuck until 2017 (long after #4A had closed). If those two (late) buyers paid anywhere near $13,753,000, they probably overpaid. Time (and ACRIS) will tell.

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5 years later, Tribeca loft adds $1 million to building values

crude measurements of value are still measurements, right?

The “2,068 sq ft” Manhattan loft #5S at 459 Washington Street in extreme northwest Tribeca just sold for $3.625mm in a somewhat newsworthy transaction. (“Somewhat newsworthy” in the sense that the Luxury Listings wing of The Real Deal media clan reported it last week because the new owner runs a “healthy cafeteria chain” (!!).)  The big picture detail of interest to Manhattan Loft Guy, however, is that this is the first sale in this small (12-unit) residential loft building in nearly five years, following a three year period in which four units sold (Past Sales tab on StreetEasy, here), the last of which was not quite a million bucks short of the recent sale.

Before breaking that down further, let me take a swipe at the Luxury Listings part of the Manhattan Media Division of the Real Estate Industrial Complex. The only thing reported as a listing history is that the loft had been “asking $3.8 million in 2014”, which suggested to me that this was a private sale. Nope! Had Luxury Listings gone to StreetEasy, the reporter would have seen that the loft had, in fact, been offered for sale from May 2013 to April 2014 for from $3.95mm to $3.875mm, but that it had also been offered for sale beginning in May 2016, the offering that resulted in the contract that the cafeteria guy signed in January.

Here’s the full listing history from StreetEasy:

May 1, 2013 new to market $3.95mm
Sept 26 hiatus
Nov 5 $3.875mm
April 17, 2014 off market
May 5, 2016 new to market $3.95mm
Sept 19 $3,799,500
Jan 20, 2017 contract
Mar 8 sold $3.625mm

A couple of things …. These sellers really wanted to sell at $3.95mm. These sellers learned that $3.95mm was too much for The Market to swallow in 2013 and in 2016, but they also learned to make a bigger price cut to find a buyer.

It’s odd that Luxury Listings didn’t find this full price history, because they grabbed listing photos from the 2016 marketing campaign. Weird!

Look at the first six listing photos in the Luxury Listings piece: they all have the Douglas Elliman watermark. The next set of listing photos is a slightly different size, with no watermark. Go to StreetEasy for the explanation: the latter set is from the (successful!) Sothebys marketing effort. In other words, Luxury Listings went to the trouble to find more listing photos from 2016, without noticing that there had been a marketing campaign in 2016. Sad!

past sales history history is instructive, if not determinative, in a small Tribeca loft building

There’s no shame in asking more than The Market wants to spend, of course, as (repeat after me) comping is hard. Especially for small building old school Tribeca lofts (which tend to be unique), and especially where there hasn’t been recent sales activity in the small building.

The last sale in the building was #6N, slightly smaller than the “S” units at “1,945 sq ft”. With one major exception, however, it sounds much like #5S, with an unspecified but “gourmet” kitchen, and classic loft elements. The light sounds better on the top floor facing north (“three sunny exposures”) but the element that breaks this unit as a comp is the private roof deck, over 400 sq ft. So the $2.65mm clearing price in October 2012 needs more adjustment than is easy to make to be very useful as a comp for #5S. (I’m gonna ignore it, as there are easier ways to skin this cat.)

The two prior sales in the building were the fourth floor pair, with #4N selling for $2.2mm in January 2011 and #4S for $2.6mm in July 2010. Not a lot of bragging in either listing description (same agents on both, with same generic descriptions), so it is hard to appreciate the stark difference in value without having seen both units.

If you take #4S as the most appropriate comp for #5S, we’d adjust for time and condition (#5S is much nicer, based on broker babble and listing photos). No need to adjust for light or view, even though #4S claimed “spectacular water views” and #5S only “an abundance of natural light”: obviously, they have the same exposures, and since 2010 the 10-story rental building at 456 Washington Street has gone up just across the street (see the living room “view” that leads the #5S listing photos … brick!). So the former (presumed) premium for a water view has been lost, while #5S enjoys a much higher level of finishes than the #4S listing implied for that unit. Let’s ballpark those differences as a wash, if only for lack of principled ways to be precise (and because it makes the math simpler!).

If you take the StreetEasy Manhattan Price Index as a useful proxy for the overall market (I do, but its become a long story), the overall market is up 33% between July 2010 (you gotta hover, $737,336) and December 2016 ($984,463). The observed #4S sale price of $2.6mm in July 2010 thus implies that #5S would be worth about $3.47mm in the just-observed market report from the most recent StreetEasy report.

Pretty darn close to the $3.625mm observed price (4.5% feels PDC, especially given the assumptions made about evening out the former premium for the water view in the #4S sale and the condition premium in the #5S sale).

my favorite listing photo is a classic Manhattan loft element, ready for its close-up

Before leaving northwest Tribeca, I’d like to comment on two listing photos. First, the good news:

love the way the beam is secured over the column

This is something I would marvel at if I were in this space, likely making a nuisance of myself by standing in front of this column, looking up, with a silly grin on my face. Your mileage may vary.

On the other extreme, the photo of “the spacious chefs kitchen” irks me. Nothing undercuts the “spacious” part like a wine fridge outside the kitchen:

most people won’t care, but …

The reason the wine frig looks a bit out of place is that it is a bit out of place, having been plugged into an outlet just outside the kitchen. What a difference it would make in integrating the kitchen if the wine fridge had the same cabinetry on top as the Sub-Zero. Alas.

Manhattan Loft Guy loves loft owners who love lofts

Luxury Listings reports that the cafeteria guy who just paid $3.625mm for his new loft in northwest Tribeca owns a penthouse loft at 130 Barrow Street. That would be this “1,103 sq ft” duplex penthouse loft with a terrace and private roof deck that was marketed as a bit of a project (“awaits your golden touch”) when he bought it in April 2014 for $1.785mm. The cafeteria business must be good!

Now the guy has twice as much space, though he lost his private outdoor space. And he’s about as far (as close, really) to the Hudson, moving all of about ten blocks due south from the West Village to northwest Tribeca.

Manhattan Loft Guy loves loft owners who newly love lofts

One more and I’ll stop, promise, but that deed record leads me in another direction. The cafeteria guy was renting this lovely prewar 1-bedroom with a great view in the West Village in 2014. From there, to that Barrow Street loft (a move of nearly ten blocks due south), and then to the much larger Washington Street loft. Business must be very good!

Perhaps he will stay for a while.

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