114 West 27 Street penthouse loft sells at $1,041/ft with unlimited potential (+ free roof?)
talk about missing The Peak!
With the recent clearing price of the “3,600 sq ft” Manhattan loft dubbed #PH at 114 West 27 Street just clearing $1,000/ft at $3.75mm, there is a way to squint at the sale and the “2,500 sq ft” private roof space that goes with the deal as a freebie, as I will explain below. With the seller having started trying to sell at the top of The Market 40% higher than he eventually got, there is a way to look at the sale from the seller’s perspective as one huge missed opportunity. To Manhattan Loft Guy, this penthouse sale is fun stuff, in so many ways….
with timing, better to be lucky than smart (or unlucky)
The story begins with the new listing on February 22, 2008, the calendar quarter in which (as regular readers well know) the highest prices on record in Manhattan were recorded, but in which pretty strong prices would continue to be recorded (less frequently, but still) for another 7 months or so. The seller’s fortunes would have been very different had he come to market just 6 months earlier than this sequence (which could be captioned following the market down):
|Feb 22, 2008||new to market||$5.25mm|
|April 21, 2009||off the market|
The next time was different in price, in timing, and in result:
|Sept 30, 2011||new to market||$3.85mm|
|Jan 31, 2012||sold||$3.75mm|
what’s not to like?
The interior is a claustrophobiac’s dream: the “3,600 sq ft” floor plan is a classic Long-and-Narrow (where “narrow means 41’9”) with but two bedrooms. Ceilings are 13+ feet, there are 6 windows both front and back, plus 5 on the long east wall, and natural light enters throughout the public space, as there are 4 long skylights. The design boasts an architect’s hand (“[h]andsomely designed by Anima Architects”) with “custom stainless steel open kitchen fully equipped with top-of-the-line appliances, [and] a windowed master bath featuring striking stainless finishes”, plus updated plumbing, central air, and 3 phase electrical wiring.
The broker babble hints that a buyer can expect to do some work, at least, with “unlimited potential” in the first sentence and a reprise of “unlimited possibilities”. Whether you look first at the “potential” in the babble, or at the darkrooms, library and office in the floor plan, or at the photos (seen more easily on the Corcoran site, here), you see that the space has been used for a business as well as for living.
If you don’t need twp dark rooms and want to keep things simple, creating a master suite that incorporates the dark rooms into that nearby bedroom is a simple matter. But most buyers at this level would ask an architect how to really exploit space this wide and this long, with this much natural light. In other words, most people would probably include a significant renovation budget into the purchase decision.
playing with numbers
Otherwise, it would appear that buying this architect designed space with “stunning views of the Empire State and Chrysler buildings” for $1,041/ft seems not only like a good deal, but includes that roof deck at no additional cost. Comping in the building is hampered by few sales (and none recent), but we can ballpark interior values starting from the $951/ft that the “1,650 sq ft” loft #8N, which sold in mint condition on April 20, 2007 for $1.57mm. (I use that instead of the chilly resale of the same loft because that marketing campaign started just days before Lehman fell, and I have already given a rationale for treating the 2011 downtown loft market as essentially flat to the 2007 market; see my September 27, 2011, is the Manhattan loft market back to (up to) 2007? 61 repeat sales say “probably”, “a bit”.)
I would adjust that $951/ft before applying it to the 12th floor penthouse because the penthouse is higher, with higher ceilings (at least 2 feet). Any upward adjustment threatens to make the roof free, which (clever as it may be to snark it that way) is a market impossibility. Let’s go at this from the other direction, by trying to discern the interior per-foot value by simply counting the roof deck as 25% of the interior, using the lower ballpark value in The Miller’s rubric for out door space. (Of course, that’s in my May 6, 2010, riffing with The Miller on the value of Manhattan terraces, decks + balconies.)
That divides the $3.75mm cost between 4,225 sq ft (3,600 + .25 of 2,500), for a notional value of the interior of $888/ft, with the roof contributing about $555,000 of the total.
We are just playing with ball park numbers here, of course, but the helpful logic is that the roof deck had significant value, and that the condition (mint-y but needing modification as full live-in space) merits a discount from the 2007 8th floor value of $951/ft. All in all, $888/ft seems a sensible number for valuing the degree to which the penthouse interior may have been discounted by The Market.
© Sandy Mattingly 2012