Chelsea Merc neighbor loft at 245 Seventh Avenue sells at $1,284/ft

across the great divide
Yes, gentle reader, Manhattan Loft Guy has a thing for the Chelsea Mercantile, the turn of the century condo conversion at 252 Seventh Avenue. (There are 22 Manhattan Loft Guy posts tagged “Chelsea Mercantile” going back to 2007, when I first started [inconsistently] tagging posts.) Of course, there are a great many lofts sold in this very large building, and the building height and angles allow for great differences in light and views, but I probably most appreciate The Merc because of the part it played in creating a new loft neighborhood. (More on that, below.) All of which is a long introduction for why I view the November 20 sale of the “2,258 sq ft” Manhattan loft #8B at 245 Seventh Avenue in the context of its more favored neighbor directly across the street.

Let’s start with a focus on the loft that sold. First, there’s the nearly perfect footprint, enabling a square-ish floor plan on which the two longest walls are more window than masonry, with multiple plumbing stacks supporting 2.5 baths and a kitchen near the center of the loft. The rest, as they say, is carpentry; in this case, creating just two bedrooms in that “2,258 sq ft” (note how few walls are built in this space). The ceilings are both tall (“11’+”) and distinguished (many beams, a few columns). With the living room on the much-windowed southwest corner, no wonder it is “sundrenched” on the 8th floor.

Finishes seem to be top notch, if (to my eyes) a little jarring (I am looking at the kitchen wall tiling). The babble claims the kitchen is “chef’s” and the baths “renovated”, but there are no photos or further description to prove that about the baths. But the babble was clearly sufficient to do what it is supposed to do: draw enough people to visit to generate bids from qualified buyers within a reasonable time: to market on July 18 at $2.995mm, in contract by August 1, and closed on November 20 at $2.9mm. That’s 13 days to contract at a 3.3% discount, for those of you who need everything spelled out.

The #8B loft sale lines up pretty well with the last similarly sized loft to sell in the building. Loft #4B has the exact same “2,258 sq ft” footprint but a 3-bedroom floor plan that also has a very strange wall in the master suite. That babble claimed a similar level of finishes (with the bathrooms described as “ brand new marble spa-like baths”) and The Market seems to have treated the two lofts as essentially identical, but for the difference in height. #4B cleared at $2.745mm on May 9, and I take that spread of $155,000 to be the difference between the 4th and 8th floor light (don’t get me started [again] on valuing better light without a view improvement) plus a fluff factor for market noise, plus maybe a small jigger of market improvement, May to November (or, going from contract dates, from February to August).

competing, kinda, sorta
Like its neighbor to the west, 245 Seventh Avenue is a condominium with 24 hours doorman, storage room and common roof deck, but across the street there is also a concierge, valet service for cleaning, gym, and childrens’ playroom, and that roof deck is “10,000 sq ft”, landscaped, higher (on top of 19 stories, not 12), and claims views to the Statue of Liberty.

The last sale across the street of a loft that is similar to #8B at 245 Seventh Avenue was actually pretty similar: #6X at 252 Seventh Avenue is “2,338 sq ft” (only 3.5% larger), has a corner living room that looks southwest, 11 foot ceilings, but 3 bedrooms and 3 full baths. It sold for $3.35mm on July 30, an 11% premium over #8B on a dollar per foot basis. And #8B has one of the better views in its building, while the upper floor views in The Merc are worth a huge premium over the pedestrian views of #6X. LINK

In short, I don’t know anyone who would think these two buildings really compete against each other, except perhaps that 245 Seventh attracts the more value-oriented (low floor) buyer.

history is rich
I promised in my opening to develop this remark: “I probably most appreciate The Merc because of the part it played in creating a new loft neighborhood”. My view is that The Merc, in fact, created the loft market in this micro-nabe, in the sense that people who would never before have considered a loft around here suddenly found that loft living here had benefits.

As I said in my August 21, 2007, new at 150 W 26 / one of the Merc’s children, The Merc’s charms enticed “uptown” buyers when it was new:

I have long felt that the Manhattan loft market around 7th Avenue above 23rd Street took off because the Chelsea Mercantile was such a success and such a break-through. The Merc put this area on the mental map for loft buyers, many of whom came from uptown and would not have gone all the way downtown to SoHo or Tribeca when the Merc was being sold in 2000.

Don’t get me wrong: there was “a” loft market in this area before The Merc, including for 245 Seventh Avenue, which was a new development in 1997. (It, too, was a pioneer.) But the 33 units at 245 Seventh (or the few hundred in the many coop lofts converted in the late 1970s and 1980s nearby)  didn’t have the one-time impact that the over-amenitied Merc had with 354 units.

I am going to go so far as to guess that #8B’s price history has something to do with the chelsea Mercantile beginning to close sales in 2000. The loft has now sold 3 times after the sponsor sale in 1997:

• Aug 12, 1997 $789,500
• Sept 29, 2000 $1.5mm
• May 26, 2005 $2.4mm
• Nov 20, 2012 $2.9mm

My guess is that the developer of 245 Seventh Avenue correctly valued the loft in 1997 and I am pretty sure (without looking it up) that the overall Manhattan residential real estate market did not come close to doubling from 1997 to 2000, which leads me to guess that the first owner of #8B was able to take advantage of The Merc Effect when he sold after only 3 years for $710,500 more than he paid. That’s my theory; do you have a better one?

© Sandy Mattingly 2012