when wrong is wrong, until it’s right, Chelsea loft edition
The “4,050 sq ft” Manhattan loft on the 2nd floor at 141 West 26 Street was offered for sale at $3.95mm for nearly a year, having been brought to market on May 30, 2014 and not finding a contract until May 4, 2015. If you view ‘market facts’ the way I do (not everyone does!), that asking price was ‘wrong’ for the better part of a year, in the sense that the asking price did not attract a buyer willing to pay a price acceptable to the seller. Certainly that was true for seven months in 2014, and was probably true in the first quarter of 2015. But some time in April that same asking price did its job, provoking the negotiation through which a buyer and the the seller agreed by May 4 that the loft was worth exactly $3.8mm.
Funny how that works: the demonstrably too-high price became the just-right price simply by tearing off calendar pages in a rising market. (From May 2014 to February 2015 the StreetEasy Manhattan Condo Index was up only 5%, so there was not a dramatic rise in the overall Manhattan residential real estate market.) There simply was no one willing to pay $3.995mm (or within 5% of it) for seven months in 2014 and at least a few months in 2015, and then … there was!
a large loft space with a few issues to chew on
The footprint for the loft permits lots of flexibility, with 29 feet across the front (facing south, West 26th Street) and 45 feet in the rear, plumbing stacks in the front, middle and rear of the loft, with an unusual patio in the southwest corner of the loft. The broker babble hints that the present floor plan is not likely to survive long after the sale (the oh-so-inviting “bring your architect” card is played) and there is an alternate floor plan to stimulate the uncreative types. With 12 foot ceilings, this is a huge residential loft:
This is a floor plan optimized for whatever work went on in the studio, where the good light is (was). The front of the loft is a (proportionately) small square in which any indoor public activity occurs, with sleep areas sharing the west wall with store space for the studio (the largest room on that wall is for storage!).
The sellers realized that any buyer will be expected to dramatically change the usage of space in the loft, as the market for 1,300 sq ft studio space is rather small. This proposed alternate may not actually be built, but there’s a logic to it:
Obviously, one issue to chew on before buying this loft is renovation expense. Think “gut” and go from there. And “4,050 sq ft” will take a lot of chewing to renovate. At a modest $250/ft for a $3.8mm purchase, that’s another million bucks.
Another issue to chew on is the light in the back. You can see clear through to 27th Street from the listing photos, but that situation is temporary.
I can’t remember if the agents talked about it in detail, or if we had to dig in the public records to find out what was going on in that big (temporarily) empty lot to the north of this second floor loft. But dig we did, and learned that the hotel to be built there would cover the entire width of that lot and would be 20 feet from the windows above. (I can’t embed the zoning diagram, but you will see it on the New York City Buildings Department Building Information System here.) In short, there would be a one-story structure in the southwest corner of the new hotel and a ground floor “rear yard” across the remaining two-thirds of the hotel width, with the flue for kitchen exhaust somewhere near the middle of the hotel width, probably opposite some of the windows of the second floor loft at 141 West 26 Street.
In other words, there would be no light back there, with a hotel rear wall about 20 feet away, and very likely a restaurant flue staring at you. How’s that for a lot to chew on??
My buyers couldn’t … er … digest all this comfortably, even with the knowledge that most full floor residential lofts put bedrooms along a rear wall that is ThisClose to another building. And even with the knowledge that there are few lofts with anything like this outdoor patio that this loft includes.
Even with the north light to be lost here, this is fascinating (and unusual) outdoor space for a residential loft on a busy Chelsea street.
a real estate aphorism, revisited
Remember that stuff way up at the top of this post about the price being wrong-wrong-wrong … -right!? The logic of that truism still holds (that’s what truisms do, dammit), but in looking again at the challenges any potential buyer of this loft would have to consider (as my clients did), there is another way to look at this loft: this loft took 49 weeks to find a contract only 5% off the lone asking price because the buyer pool for this loft was probably small, once entrants in the pool started chewing.
It’s not just a (near) $4 million purchase, but it’s a million dollar renovation (or a two million dollar renovation). And how many people really need 4,000 sq ft? Or are intrigued by a second floor patio that fronts on 26th Street? And how many buyers are willing to live through the construction of a 21-story hotel? Not to mention, end up with that hotel sitting within 20 feet of their rear windows? Possibly, with a restaurant exhaust flue?
On reflection, this loft is one of those it takes the right buyer lofts, which means that the sellers have to be confident in their asking price and patient. The time to contract proves they were patient, and the 5% discount from ask (likely) proves they were right to be confident about the ask.
It can be a tough business, this selling a loft with ‘issues’. I assume these sellers are happy with the result. (Hope so.) The loft was fun to visit, and to contemplate the challenges; the sale is fascinating to ponder as an outsider to the transaction.