did a Jedi mind trick garner 40% premium over 2010 for a small loft at 107 West 25 Street?

is your coffee fresh?

The recent sale of the “1,100 sq ft” Manhattan loft #2C at 107 West 25 Street, which recently sold (with a “400 sq ft” private terrace) at $1.4mm, involves a deceptively complex tale. The complexity will unfold below, but here’s the deceptive part: the loft was successfully marketed in “meticulously built out” and “triple mint” condition, after having sold on February 25, 2010 for $999,000; you’d think this 6-figure value was based on an unimproved condition. You’ll see that this is not so simple. But first, a digression to Noho and the applicability of a hoary real estate bromide….

what’s the third one?
As they say in real estate: the three most important things are location, location and … what’s the third one? (… waiting …) Give up? It’s location! This bromide comes to mind in looking at the recent sale of the “1,100 sq ft” loft #2C , as sharp-eyed readers of Manhattan Loft Guy (that’s you, right?) recall another Manhattan loft of “1,100 sq ft” that recently sold, and anticipate the significance of the LocationX3 bromide, as the value of that loft, in a very different neighborhood, is in my June 29 headline: $1,500/ft for 7 Bond Street loft with 4 windows, no bedrooms.

Short story: loft #2C saw a huge increase in value from 2010, but still cannot compare to the value of a Bond Street loft that comes with some real challenges. Bond Street: hot. West 25 Street: not so much.

is this a buy, fix, then zoom sequence?
This sequence (and these numbers) shows The Market loved the “meticulously built out” look of loft #2C:

Jan 18 new to market $1.45mm
Feb 7 contract  
May 1 sold $1.4mm

 Especially after this earlier sequence, and these numbers:

May 13, 2009 new to market $1.275mm
July 15   $1.198mm
Oct 14   $1,097,500
Nov 13 contract  
Feb 25, 2010 sold $999,000

The clearing values and the time on market imply that the loft in 2012 was very different than the loft in 2009-10, don’t they?

Funny thing is, there was nothing wrong with the loft in those days. (It was marketed as having the “highest quality finishes and detail”.) Funny thing is, it came out with very good timing, just as the overall Manhattan residential real estate market was starting to thaw. (Yet it did not find a deal within 80% of the original ask.)

You want really funny? Compare the kitchen photo in the current listing (pic #2, best viewed in large format, of course) to that in the 2009 listing (pic #4, no large format available, alas): definitely the same breakfast bar (note the white stripe at the bottom), probably the same counter and frig, possibly the same lighting fixtures, cabinetry is similar in shape, possibly the same fronts. I have a terrible suspicion that only significant difference in the kitchen Then and Now is the marketing: the Now babble is much more specific about the high-end finishes and materials, and has better photos.

Laughing yet? Now do the same with the master bath photos, pic #3 now and #2 then: allowing for different filters that alter the color scheme slightly, this is the same bathroom, with the same fixtures, cabinetry, mirrors, light fixtures, ‘pebbled’ floor, and glass shower door.

The floor plans are a hoot! The Now floor plan is exactly the same as the Then floor plan, both on Streeteasy and in our listing system.

I can’t be certain that the loft Then was in substantially the same condition as the loft Now, but that looks pretty bloody likely.

a Jedi mind trick?
I didn’t read the broker babble until after I knew that the loft sold in 2010 at $999,000 and in 2012 at $1.4mm, so I read the babble with those facts established, and so assumed that the loft had been renovated in between. After all, how else can you support a market reaction that the loft was worth 40% more 26 months later?

After stubbing my toe over the floor plans and photos, I was surprised to see that the 2012 babble does not explicitly claim that the loft had been “meticulously built out” recently, as if the “architectural designer [who ‘conceived and constructed’ did so] for his personal use”. I just assumed that, from the price. Did others?

Did the buyers understand that they paid 40% more than the loft had been worth in 2010?

At (an unadjusted) $1,272/ft, the May 2012 sales price is easily the record for the building, with the “1,300 sq ft” loft #4C having sold at $1,111/ft a few months before The Peak while also selling at (only) $1,019/ft in April 2011. (That sale was odd enough that I hit it in a June 22, 2011 post, why did 107 West 25 Street loft take so long to sell?.)

Let’s use that 2007 #4C sale at $1,111/ft as establishing the top price for interior space in the building, as a way to ballpark how much of the #2C sale was due to the “400 sq ft” terrace (i.e., use it to riff with The Miller). With that base line, the “1,100 sq ft” interior of #2C contributed $1,222,000 of the #2C total value of $1.4mm, with the balance of $178,000 allocated to the 400 sq ft terrace ($445/ft, or a tolerable 40% of the value of the interior $/ft).

Having jumped through these arithmetic hoops, there is a way to rationalize #2C at $1.4mm, based on a record sale from 2007 that is itself unrepresentative of market conditions only 14 months ago. Unfortunately, that is only rational if you ignore the same-loft-in-same-condition sale of #2C in February 2010.

I am just going to throw up my hands and stop here….

© Sandy Mattingly 2012


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