Lion's Head penthouse loft closes out of foreclosure (121 West 19 Street) with a 7-figure bank hit

[with Jan 28 postscript]
our long national nightmare is over
With the January 6 sale of #PH-E at 121 West 19 Street (The Lion’s Head) for $2,445,810, the most bizarre and longest-running saga of a Manhattan loft in the tenure of Manhattan Loft Guy is completed. Not incidentally, this is the first time the loft has been owned by a private individual who was not in financial distress in at least 4 years.

Let’s start with a simple (!) list of deeds and other filings, as reflected on Property Shark and StreetEasy, with a direct link to ACRIS for one lien amount:

the last happy people
The Lion’s Head, of course, was one of the great new condo loft conversions in The Era of Froth, with potential buyers lining up down 19th Street in Spring 2005 to get a chance to buy. We don’t have a contract date in our data base for the original sale, but we do show a New Listing on April 1, 2005 and a “contract out, with back-up” as of May 5, 2005. Obviously, those first buyers never moved in, but flipped after owning it for 33 days for a (pre-expense) gain of $1,430,438. (Those were the days!)

The flippers were the last people happy to have owned #11E until 2 weeks ago.

That second owner took out 2 mortgages and it is unclear whether she ever made a payment, as the original August 2006 total precisely matches the February 2008 lis pendens. It is similarly doubtful whether she ever paid common charges, as the monthly common charges were $1,451 and she was in arrears by the May 23, 2007 lien filing for “common charges and assessment” $14,902.17 … that is, after owning the place for exactly nine months. In fact, she never moved in, either. (The latest listing description says “Never been lived in!!”)

an unmotivated bank?
Compare that history to this listing history, a tale of one unhappy owner, one unhappy (but not very motivated) bank, and one puzzling listing agent:

The condo association filed its lien on May 23, 2007, the bank may never have been paid a dime after lending $3.06mm in August 2006, yet the owner appears to have been calling the shots for along time here, after having made the 10% down payment of $340,000 and then more or less stiffed everybody ever since. As I said in my September 28, 2007, anyone as confused as I am? rare foreclosure sale + rare pricing at Lion’s Head 11E, follow-up to my August 12, 2007, gnashing of teeth in The Lions Head / jumpy prices + lien at 121 W 19 PH-E), “Confusion reigns in my brains”. (Apparently, I missed the August 23, 2006 resale at $3.4mm for that post; still confusing.) That second owner was trying to sell at a (slight) loss from May 17 to September 1, 2007, but at a gain otherwise from January 1, 2007 to February 2009 — a full year after the bank filed a lis pendens and almost 2 years after the condo filed its lien.

Of course, 2007 was the best time this loft could ever have found a buyer, leading up to The Peak. Logic suggests that she should have gotten something more pre-Peak than #11C (#PH-C) got in a post-Peak sale on October 15, 2008 (contract on September 22), $3.05mm for “1,973 sq ft” or $1,545/ft. But that ignores the fact that #11E was something of a tired listing, even perhaps a weird listing, by then. And that #11E had a smaller terrace than #11C (160 sq ft vs. 545). Even so, that same price-per-foot would only imply a value of #11E under $2.9mm, and why would a buyer think that the seller would be negotiable by more than 20% after September 2007?

Did I mention that this is rather confusing behavior, all around?

did the bank file the mortgage so late that Condo got priority?
If my memory of how these things work is correct, the bank would have had a stronger (prior) lien to the condo association but delayed filing the original August 2006 mortgages until after the condo filed its lien for common charges in February 2008. That was probably a something-less-than-six-figure mistake, but an unnecessary one.

hard to tell how big a hit
The banks’ lien increased by about $180,000 between filing the lien (February 8, 2008) and scheduling a foreclosure auction, to $3,237,096. Presumably, the same banks that held the paper were the “winners” in the July 28 auction last year, having to bid $1,849,500 to get clean title (and paying off the condo’s lien and the likely tax lien; probably under $200,000).

It took the bank 60 days to get it back in the market (ouch!), September 30, 2010 for $2,519,900, then one (unnecessary) price drop to get the contract by November 19 that closed this month at $2,445,810.

If my rough math is right, the bank’s final tally is something like this:

$3.06mm original debt
$3.24mm lien as of June 2010

$2.52mm proceeds of January sale
________
$720,000 deficit, plus other expenses:

$200,000 (tax + common charge liens?)
$100,796 (4% commission on sale)
$44,636 (NYS + NYC transfer taxes)

________
________
$1,065,432 (more or less)

Of course, the mistake in filing late pales in comparison to the mistake in not foreclosing sooner, and in not forcing a sale in the late 2007 or early 2008 market.  What a country!

fun fact
The January 6 sale of #11E at $1,283/ft (unadjusted for the small terrace) is the highest price in the Lion’s Head on dollar-per-foot basis other than #11C in November 2008 ($1,545/ft) and the original #11E resale (CoughCough$1,784/ftCoughCough).

None of the other penthouses have changed hands since the original sales and the highest non-penthouse sale has been #4D on August 6, 2008 at $1,248/ft.

[Jan 28 postscript:

not-such-a-fun fact
The New York Observer identified the buyer as a Broadway choreographer unknown to me, in a piece I blogged about in Lion’s Head loft foreclosure sale postscript: an unusual 4-letter word for b-u-y-e-r?; as you will see there, I am shocked and appalled that an agent would go out of his way to publicly trash a customer. It is hard impossible to imagine how this might have seemed like a good idea at the time, even for an instant.]

© Sandy Mattingly 2011