O’Neill loft at 655 Sixth Avenue resells at 21% loss over 2007

that will leave a mark
Until recently, there were but two lofts at the O’Neill Building, 655 Sixth Avenue, on the spreadsheet of 2007 and 2011 paired sales. (See my September 27, is the Manhattan loft market back to (up to) 2007? 61 repeat sales say “probably”, “a bit”, for details and an overview of the paired results.) That was mini-loft #2M, which re-sold in February at a tiny 1.16% more than the January 2007 sponsor sale, and #3M in the same line, which sold in July at a 25% premium to the (much cheaper) sponsor sale in January 2007. 

To say that the Manhattan loft #3F at 655 Sixth Avenue had a different result on resale is an understatement: at a loss of 21.43% from February 2007 to October 24, 2011, only two of (now) 73 pairs of downtown lofts that sold both in 2007 and in 2011 did worse. (See that September 27 post for how to see the details on the spreadsheet.) Both “M” resales sold above ask; #3F sold 8% below last ask, 17% below first ask in this campaign, and 38% below first ask in the initial resale attempt. Different results, indeed!

This is the listing history of motivated sellers, also of sellers who had to learn an expensive lesson by mis-timing and mis-pricing just before Lehman filed for bankruptcy:

(2 brief periods off the market, 33 days in total. omitted; one post-contract “price drop” ignored.)

Note how chastened the sellers were after taking a flyer beginning a month before Lehman fell. Note that they re-started 15 months ago slightly below their sponsor purchase price. Note how long they waited to give each new price a chance. But don’t lose sight of the $676,575 difference between what they spent in 2007 and what the got in 2011.

O. U. C. H.

hard to profit if you buy high
A quick and incomplete scan shows that the #3M re-sellers did so comparatively well precisely because they got a relatively low sponsor price (16% lower than #2M), while the #3F re-sellers paid a relatively high initial price of $1,328/ft. In contrast the sponsor did not sell #2F (a bit larger than #3F, “2,522 sq ft” v. “2,376 sq ft”) until November 2007 and got (only) $2,749,745 for it, 18% lower than the sponsor got for #3F on a $/ft basis.

Only the original #3C purchasers paid a higher sponsor price (that I noticed) than that of #3F (at $1,386/ft), but look what those smart fortunate people did: they flipped #3C in 6 months for a 10.5% gain.

Other than penthouses, loft #3F is the only large unit to re-sell in the O’Neill since that #3C resale in June 2007. Perhaps there is a very local resale problem limited to the large units, as neither the 1-bedroom #2M nor #3M had this problem. And neither did 1-bedroom #3B, which sold 10 months ago at a 9% premium to its December 2006 sponsor sale, or #2G, which sold 15 months ago at $1,340/ft after the sponsor sold it for only $1,158/ft in July 2007.

terrific views did not get it done
If you have ever driven up Sixth Avenue in Chelsea, you know this loft. #3F is that rounded unit (on the 3rd floor, obviously) facing all that traffic from the northwest corner at 20th Street. I saw it from the inside, with buyers early this year, and I remember that we thought the foor plan was surprisingly small. That is an odd reaction to “2,376 sq ft” that has only two bedrooms, especially one with such high ceilings (“13 ft”), but the space (to us) feels smaller.

I think that is due, in part, to the most interesting feature of the loft, that large curved corner that is, in real life, difficult to use. Certainly, that shape makes it hard to add a third bedroom without a radical re-do (probably requiring moving the kitchen, or swinging its axis). An unusual problem to have in a “2,376 sq ft” corner loft with 14 windows.

We had the impression that the loft suffered from street noise, which should be a problem that (if shared by others) can be remedied with money spent on new windows. (Why wouldn’t the developer have done that?) My buyers hardly gave it a second thought, as the sound and size issues made this loft, in our view at the time, a very poor competitor in the $3mm price range.

© Sandy Mattingly 2011