a penthouse premium + a non-comp loft sale at Chelsea Mercantile, 252 Seventh Avenue

relish one, ignore other
When the Manhattan loft #PH-L at 252 Seventh Avenue at the top of the Chelsea Mercantile closed on December 16 at $2.416mm for its “1,510 sq ft”, it continued the high-floor-premium trend at The Merc. When a deed was recorded transferring ownership of #8B for $980,000 for “1,146 sq ft” on December 20 it was a comp trick for the unwary: ignore this sale, if you are interested in real market values in this building!

The premium for high floor units with unobstructed views at The Merc is extreme. Last month’s #PH-L comes to $1,508/ft. When #PH-T (on a lower floor than #PH-L, confusingly) sold on June 25, it got $3.25mm for 2,022 sq ft, or $1,589/ft. #16M cleared at $3.5mm for “2,236 sq ft” ($1,565/ft). #17-I cleared at $3.775mm on May 21 ($1,715/ft). (None of these have outdoor space, so it is all about the views.)

not a premium layout
The premium for #PH-L is especially pronounced because the floor plan is (errr…) somewhat challenged, with just one real bedroom and the home office that so many Chelsea Mercantile lofts have. Those eastern windows and views greatly expand the sense of space in the place, but the 1 BR + home office market is a thinner market than the 2 BR market. Except that in this case it did not seem to hurt.

family is not arm’s length
The first hint that the #8B a month ago for $980,000 should not be considered a valid comp is its history: it sold for $805,135 in July 2003. Next, there are the other (true) comps in the building, including the smaller #3M sold in October at $1,235/ft, possibly with higher finishes (see my October 14, small Chelsea Merc loft dresses up + trades up 14% since 2007). The clincher is the names on the deed, which suggest this transfer was all in the family.

Other unit owners at the Chelsea Mercantile should not be cursing this family for burdening them with a low-sale-comp, but future sellers will want to have a ready explanation for the next buyer who negotiates with “well, #8B only got $980,000 and that has custom built-ins, kitchen w cherry cabinets, granite + steel, limestone + marble bath …”.

Shouldn’t be a problem.

© Sandy Mattingly 2011