million dollar renovation at 144 West 27th Street?

lovely loft, interesting price above ask, sold by …

The recent sale of the “2,400 sq ft” Chelsea loft #7R at 144 West 27 Street at $3.125mm is old news by now to people who follow real estate gossip news (even though the sale was May 14 and the deed filed only on May 27), but the identity of the owner is only one element. The loft sold 4% over ask and needed only 11 days to get to contract, it did not sell two years ago in a brief campaign (3 weeks) at $3.25mm, it was beautifully renovated (some would say “incomparable and beyond aesthetic reproach”) after having been purchased in November 2012 for $1.65mm, yet it did not dramatically over-perform the hyper-local market. And for inside baseball fans only, the seller did not (formally) market it.

As with all cool Manhattan loft properties, we should start with the cool loft.

The broker babble lists things that were renovated in 2013:

8″ wide oak floors, central AC, radiators, electrical, windows, motorized shades, marble kitchen countertops, 6-burner Bertazzoni oven with commercial-quality outdoor ventilation system, Sub-Zero appliances, and LG washer/dryer system are all NEW. Also renovated were the powder room and the second marble bathroom, which has an extra-deep Tuma soaking tub.

The new master bath is ensconced in stone, possesses a couplet of marble sinks, and contains an oversized shower with rainforest showerhead.

One thing that’s interesting is that the layout of the loft changed only a little, from this

note the location of all the plumbing rooms + dimensions in the master suite

to this

new plumbing, but in the same places; master suite has a new entry wall, 2nd BR extends east, 3rd BR added

I don’t see evidence that anything else changed in the layout. But new floors, new central AC, new radiators, new electrical, new windows, new motorized shades, new marble kitchen countertops, new top-end kitchen and laundry appliances (with that professional exhaust), plus 2.5 newly done bathrooms … had to cost a few bucks.

The scale and the quality of work is evident from the Before and After main listing photos, of pretty much the same view and almost the same angle:

BEFORE: maple floors, beams + sprinklers painted to match the ceiling

AFTER: don’t think I’ve seen beams bleached to match the floor before; nicely complemented by the (copper?) finish on the sprinklers

If you toggle back and forth between the different angles in the 2012 and 2015 listing photos, it even appears as though the built-ins survived the renovation, but have been streamlined (lightened up) a bit. I have to admit, the ‘cosmetic’ work is dramatic, and a dramatic improvement over the almost rustic, heavier look of the loft Before.

Of course I am curious about how much this project cost, as the savvy seller put $1.65mm in to buy it November 2012, then launched on this vast renovation (a “collaboration between architect Eric Cohler and designer Paris Forino [that] is incomparable and beyond aesthetic reproach”); which was pretty quick work considering that brief marketing in May – June 2013), and then sold it for (date I say ‘only’?) $3.125mm last month.

I hope it wasn’t a million dollar renovation, in cost. (At “2,400 sq ft” of new floors, a/c, windows, shades, kitchen and 2.5 baths, etc, etc, a million dollar budget between architect Eric Cohler and designer Paris Forino is only $417/ft.) Let’s hope they spent only $300/ft, to give us some numbers to play with, before we get to the other elements of the sale that interest me.

If they spent $720,000 on the 2013 renovation on top of the 2012 purchase of $1.65mm, we can adjust that ‘nut’ for the change in market to resale to get an idea (nay, a guesstimate) of how well this buy-fix-sell worked financially. The overall Manhattan residential real estate market, as measured by the StreetEasy Manhattan Condo Index, is up 27% from November 2012 to February 2015 (the last month in the Index so far, alas), from 191.14 to 243.76.

The simple arithmetic of the Index gain times the purchase + $300/ft renovation budget implies that the loft would be worth just over $3mm today (February, alas). You see what I am so curious about that they actually did spend on the renovation. If $300/ft, they basically got dollar for dollar in increased value for the renovation by selling at $3.125mm, applying the market timing adjustment from the StreetEasy Index (close enough in big round numbers). A budget less than $300/ft, and they took more money out than they put in; a budget more than $300/ft and … (you see where this goes).

The more precise you try to be in applying these general guesstimates, the more likely that you are straining the data. But (on my assumptions) if they paid $400/ft for the “beyond aesthetic reproach” renovation, they only got about $0.80 back for every dollar. Interesting, indeed, at least to me.

how does the neighbor’s renovation compare, two floors below?

The “3,200 sq ft” loft #5R was the last loft sold in the building before #7R. It was sold by its owners in June 2013 for $3.35mm, or $1,047/ft. No offense to those owners, but I am not convinced that they got a market price (even getting $100,000 over ask), as I am not convinced that their loft was fully exposed to The Market. That quibble aside, the StreetEasy Manhattan Condo Index implies that a loft worth $1,047/ft in June 2013 would be worth about $1,235/ft as of February 2015. That’s within 5% of the dollar-per-foot value of the “beyond aesthetic reproach” #7R. Hmmm ….

The owner described #5R in 2013 as having been “gut renovated in 2011”, with “a definite WOW factor”, plus these specifics:

beautifully restored original maple floors, and walls of double height eco-friendly quiet windows. … brand new 6 zone central AC, an insta hot water tankless water heater, brand new high end stainless steel appliances, a washer/dryer, newly remodeled kitchen cabinets, a glass backsplash, and a restaurant grade 6-burner oven with commercial vent. … a 5 piece master bath with a soaking tub, glass shower and a television.

I would think the recent #7R sellers think that their renovation was of a higher quality, but those civilian owners of #5R got a dollar-per-foot price in June 2013 that scales (with the StreetEasy Index timing adjustment) to 95% of that achieved by the professional marketing campaign for #7R, just successfully concluded 4% over ask. Hmmm ….

you know who sold loft #7R, but when did the buyer know?

Readers of Curbed, watchers of Bravo, even readers of the New York Post, know the recent seller of #7R. Curbed covered it when it was a new listing five months ago, and again right after it sold, even before the deed was filed; Curbed might have been alerted to the sale by a New York Post item that identified the buyer as “British beauty Evelyn Webster, a Time Inc. executive vice president in charge of business operations and strategy” (also noting the celebrity seller, of course). I imagine that the listing was all over The Instagram, as well.

If you didn’t follow these media, however, you wouldn’t know from the Elliman listing who the seller was. Here’s the 2015 listing from Elliman, with one listing agent identified and pictured. (The StreetEasy listing has the same info about the listing agent, singular.) That’s not the seller.

Here’s the (short term) 2013 listing from StreetEasy, not accessible any longer on Elliman. There are two listing agents. And there are two words toward the end of the 2013 broker babble that are not in the 2015 broker babble: “Broker Owner”. I assume this was done on purpose, with the two words deleted from the 2015 listing, and only one of two (famously) teamed agents pictured on the listing, with the “Broker Owner” photo and name omitted. These are professionals, right?

This irks me. Perhaps only me.

I’ve carped about this “Broker Owner” thing before, including in my May 24, 2012, 40 Mercer Street news: nothing says successful new development like a 7-figure gain since 2007, where I relied on a timely notice circulated within the Real Estate Board of New York:

Outside counsel to REBNY’s residential real estate division write today:

Title 19 Sections 175.4, 175.5 and 175.6 of the NYCRR [the State’s rules and regulations, codified] do require a real estate broker to make disclosures to the other parties involved in a real estate transaction when the real estate broker has an ownership interest in the property involved in the transaction.

Those regulations do not specify when that disclosure is to be made, but counsel suggests it be made in writing when the NYS agency disclosure form is provided, and if that form is not required, at “first substantive contact”. Personally, I recall having often seen “broker/owner” at the end of broker babble on a sales listing, so I know that at least some agents do it that way. I assume this agent / seller did the right thing, but I think the better course is to put it in the listing description instead of (or in addition to?) relying on a separate written document to be provided.

I assume that in this case the buyer buyer was properly informed that the Million Dollar Listing Guy was the seller of #7R and that his business partner was the seller’s agent. I just don’t understand why agents don’t do this up front, in the broker babble.

I couldn’t find it in a quick search, but I recall another instance in which A Famous Manhattan Agent sold a loft, but was absent from the listing materials, and there was no mention of “Broker Owner” in the listing on the web. In that instance, the (single) listing agent was a junior team member, and that sale was the only one on her agent page that she had (purported to have) as her own exclusive listing, as ll her other listings were as part of the Famous Agent Team. Again, I don’t know what potential buyers were told face to face in any of the sales, but there seemed to have been a conscious effort to strip out from at least the web a bit of information that New York State law requires be given to buyers. Just as there seems to have been a conscious effort to delete the “Broker Owner” from the web listing for #7R, and to picture only one half of a two-person team as ‘the’ listing agent, singular.

Makes us look bad, no?