lovely, but … Chelsea loft at 236 West 26 Street sells TWENTY-FOUR PERCENT above ask

(sometimes, you have to shout about Manhattan loft sales)

The Capital at 236 West 26 Street is a fairly mature coop, having been converted in 1984. There are some quirks (commercial lofts mixed with residential units; odd numbering conventions for lofts), but it is big enough to have enough history, certainly big enough that this should not happen, except on purpose: the “1,800 sq ft” Manhattan loft #11NW came to market on July 25 at $2.495mm and found the contract within 3 weeks that closed on October 22 at $3.1mm. And I don’t think they were trying to do that on purpose.

The loft has many charms, from condition (mint-y, with “custom finishes throughout”) to exposures (“sun-filled”, with open views) to outdoor space (setback terrace, with Empire State Building views, not to mention those Juliet balconies), but Jeezy Pete … $605,000 over ask, and $1,632/ft, roughly adjusted for outdoor space at 50% of the value to the interior, in a coop in which the last sale was of to-be combined lofts at $953/ft.

The loft is a beauty, with those finishes on a quirky footprint that is ideal for the right buyer. (And the found the right buyer, didn’t they?)

I am a sucker for Manhattan loft floor plan porn

Particularly after beating up on the awkward-and-not-in-a-good-way floor plans in Triebca Space, as I did in Tuesday’s, The Market has its way with “above ask” Tribeca Space loft sale, as is its wont, I find the #11NW floor plan to be a thing of beauty:

quirky, and optimized for entertaining by a small family (an Elliman image)

This is not a “flexible” floor plan. You could flip it around, theoretically, by splitting the north wing (the kitchen / dining area) into two bedrooms, then opening the west wing into living / dining (assuming those bathroom plumbing stacks could handle kitchen duty), but what’s the point? You get no more bedrooms, just a different look.

As is, the loft has an unconventional allocation of space, with about equal space allocated to the separate kitchen / dining area and to the living room space … but what entertaining possibilities! The dining area flows around the corner to the living room, optimal for guests wandering along the window walls or out onto the terrace. And note how the kitchen is a working (entertaining) kitchen: who needs that much counter space, if not to feed and entertain 20 or 50 folks?

Another subtle thing I like about the floor plan: you see that entry, behind the kitchen? Because that kitchen ‘wall’ lacks tall cabinets, it is obvious that in real life you can see the north windows (with a view ‘over’ the kitchen) immediately on entry.

enter through that grey door, and you will feel compelled to look to your right to the open city views (Elliman, obvs)

My only quibble (because I am that guy) is the home office. It eats into the living room, ruining the square of open space that should be there. But: they built it to optimize their usage, and this was obviously valuable; and, it is easily removed, if the new owners don’t need an office (or, as used by these sellers, a nursery).

the terrace is a thing of beauty

As noted, that terrace is perfectly placed for access from the kitchen / dining area, with easy access as well from the living room. Cocktails and hors d’ourves on the terrace, anyone? It’s just big enough for a small crowd, with quite a lot of character (brick porn, anyone?), with An Iconic View:

a lot of sky, and that tall needle to the northeast, always nicely lighted during cocktail hour

Talk about optimized for entertaining: would you turn down a dinner party invitation here during terrace weather?

If you are a regular reader of Manhattan Loft Guy, you noticed what I did up top in doing rough adjustment for the outdoor space to get to a ballpark value for loft #11NW of $1,632/ft. Obviously, that 50%-of-interior rubric is my doff of the cap to The Miller, with whom I riffed about how to value outdoor space way back in my May 6, 2010 post.

If any terrace earns super-premium treatment, it would be this one, as it is only a small percentage of the overall space (while still being large enough to fit a small crowd), it adds views not easily evident from much of the interior (who doesn’t love to guess the reason the Empire State Building is that color this night?), and is directly accessible from the most logical parts of the loft, rather than being up the stairs or accessible only from the second bedroom. I ballparked the terrace at 50% of the value of the interior because that is the top of The Miller’s general guide; hence, $1,632/ft as the adjusted value of the entire loft. But I could be persuaded that the terrace is really equal to the value of the interior, which would bring the adjusted value of the entire loft down to $1,550/ft.

A small difference between the 50%-of-interior ($1,632/ft) and 100% ($1,550/ft), but perhaps enough to make a difference in comping to the last sale.

not science, but art (or, is it guesswork)?

The best comp for any given loft is a recent sale in the same building that is similar in size, quality, and view. (You know that, but I repeat for rhetorical purposes.) In this case, the “2,307 sq ft” on the 7th floor sold as a combination project 18 months before loft #11NW for $400,000 and $1.8mm is neither very recent nor very similar in quality, but it is somewhat similar in scale. And it is the best that we have hyper-locally. We can easily, if roughly, adjust for the different market conditions when that combo project sold, compared to #11NW, of course using the StreetEasy Manhattan Condo Index.

That oh so useful tool tells us (in rough terms) that the overall Manhattan residential real estate market was up 20% from March 2013 to August this year (the most current month indexed). In broad terms, that implies that the 7th floor combo would have just sold for $1,144/ft, still in need of renovation / combination. Or, about $500/ft lower than the recent value of #11NW if the terrace is worth (only) half the value of the interior; about $400/ft if the terrace is truly the premium amenity that I believe it is.

From this perspective, the fact that loft #11NW just sold for $3.1mm is not so very surprising, suggesting a premium over the 7th floor of only $150/ft to $250/ft, with the 7th floor adjusted for time and a $250/ft renovation. I say “only” because #11NW gets some upward adjustment for being four floors higher, another upward adjustment for (apparently) having better views, and for being ‘done’.

But I keep coming back to this: the people professionally responsible for assessing where loft #11NW might fit in The Market agreed with the sellers that the best asking price would be (only) $1,313/ft (adjusted at 50% for the terrace). I can imagine a strategy that intentionally prices below The Market to generate the maximum frenzy in the shortest time; I’d be surprised if any sellers would agree to intentionally under-pricing by 24%.

It is a good day. I get to play with numbers, not only making reasonable but untestable assumptions about this loft, its neighbors, and The Market, but riffing (again!) with The Miller. And, I get to wash the bad taste out of my blog-mouth of a crappy floor plan with no view or outdoor space in a nondescript not-prime Tribeca condo earlier this week, with this charmer. That helps.