Chelsea Mercantile loft with few windows-per-foot sells without view at $1,040/ft (again!)

that courtyard is not a premium view
Long-time readers know how I feel about the Chelsea Mercantile building at 252 Seventh Avenue: the building that created the market for high-end residential lofts in this micro-nabe. (The 17 Manhattan Loft Guy posts tagged ‘Chelsea Mercantile’ are collected here, going back 5 years [!].) As a collection of 4 buildings over a very large footprint, one of the developer’s challenges in converting from Veteran’s Administration offices to residential units was getting light into the middle of the block. In this case, at least, the result is that some units have floor plans that are not very desirable. The “2,066 sq ft” Manhattan loft #7A at 252 Seventh Avenue is a case in point: though babbled as “[s]pacious and glamorous” with the “grandest of Living Rooms”, the floor plan has exactly 3 windows, with a “view” of the “water fountain with planted courtyard”.

windows with views = $$$
If you are a close reader of Manhattan Loft Guy you will know that I have hit the View Premium at The Merc before; if you are a really close reader you will remember that the last time was for a loft with (a) few windows and (b) courtyard “views” that sold at … (wait for it) … $1,040/ft. That was about the “2,269 sq ft” #10R in my February 3, water fountain view from Chelsea Mercantile loft worth only $1,040/ft. That floor plan featured one window in the master suite and a narrow wall of windows in the living room and is even more awkward than the #7R floor plan.

I was not shy about characterizing that floor plan in that post:

is this the worst floor plan in the building?

You will not see many lofts as big as “2,269 sq ft” with a floor plan that is as inefficient or has so little utility as loft #10R. Number of (real) bedrooms: one; size of (interior) office (aka “interior” bedroom): 20 x 18 ft with a closet and a walk-in closet, and with a direct entrance to the “master” bath. Obviously, many people are going to put someone to sleep in that “office”, but still ….

Given the scale of #10R’s layout weirdness, I still think it is worse than that of #7A. I did recognize the reason for some weird layouts in a building with as large a footprint as The Merc, and even recognized that there might be others here:

In the puzzle that is any building footprint with lots of units per floor, the “R” line got squeezed and pulled and jabbed. Short on windows, long on space and angles, with more nooks and crannies than most loft layouts (from the foyer, to the 2 walk-ins, to the large bathroom). I assume the layouts of other adjoining lofts make a lot more sense, but perhaps there are others that suffer in this very large loft building.

The “A” line is one such line.

The other side of the view coin at The Merc as the lofts with spectacular views, as I noted in that February 3 post about a Chelsea Mercantile sale I had just hit recently. The two sides of the view coin are $1,040/ft (for courtyard “views”) and nearly $1,700/ft for long and open views:

my January 20, privileged Chelsea Mercantile loft clears near $1,700/ft at 252 Seventh Avenue, talking about what spectacular views are worth at the Chelsea Mercantile (in two cases from the 17th floor, one north, one south: around $1,700/ft)

Not all of the difference in value on the two sides of this coin is due to views, as there are significant layout deficits for #10R and #7A, as noted. Maybe $200/ft in layout deficits, in fact, as explained in that February 3 post. But even with that, the isolated premium for views in this iconic building could be more than $300/ft, more than 25% on a $/ft basis. That is a dramatic premium.

(Forgive me, but I can’t resist this aside. There may be a broker babble handook for dealing with challenging layouts at The Merc. Loft #7A was just babbled as “[s]pacious and glamorous“; loft #10R was babbled last year as “[d]ramatic and spacious”.)

expectations made to be dashed
The seller thought that #7A was worth more than The Market thought:

June 22, 2011 new to market $2.595mm
July 29   $2.45mm
Sept 23   $2.375mm
Oct 27   $2.295mm
Nov 19   $2.25mm
Feb 1, 2012 contract  
April 4 sold $2.15mm

Note that the seller was motivated enough to drop the price 4 times (except for the Summer, within 5 weeks each time), but seems to have encountered an emotional floor, with that last ask lasting 10 weeks. From start to contract was 7+ months, with a discount from original ask of %. The seller got the result she wanted (a sale) but not all the dollars she wanted. Not that anyone should feel sorry for any individual loft seller, but in this case no one will feel sorry for a seller with an $800,000 gain. (That gain, 74%, is from her purchase in 2001, but is too many dollars to sneeze at even over 11 years.)

The full price history of loft #7A shows the immediate impact of the Chelsea Mercantile as a game-changer for high-end lofts in this area. This recent seller was not the original owner, though she bought in 2001. She paid $1.35mm in August 2001 to someone who had paid only $845,500 12 months earlier. That was one successful flip!

buyers knew there were better views in the building
The folks who just bought the no-view-few-windows #7A knew that they were getting into, besides a courtyard. The deed record notice address shows that at least one of them was coming to #7A from this 11th floor “1,934 sq ft” rental that boasts “filled with sun light, … living room with North and West city views, a beautiful South/West view from the master suite”. Apparently they were more drawn to the space than the views or light, or the relative value for buying a large loft here with few windows and no view.

The loft above that rental is in contract off a discounted asking price of $3.25mm, suggesting that the market value for what the “1,934 sq ft” they had (but did not own) is something less than $1,680/ft, compared to the market value they established by buying the “2,066 sq ft” loft #7A at $1,040/ft. You want a view, you pay for it (perhaps a million bucks at this scale); if you don’t need a view, you can afford much more space at The Merc.

Sometimes the trade-offs are both obvious and (relatively) easily quantified.

© Sandy Mattingly 2012

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