what did a “flawless renovation” of 315 West 23 Street loft cost, to generate 60% premium over Peak?

big bang for those loft renovation bucks in Chelsea

This looks like a form of Manhattan loft alchemy to me: the (possibly) “1,200 sq ft” Manhattan loft #6C at 315 West 23 Street (the Broadmoor) was just sold for $1.625mm after having been purchased in January 2008 for (only) $999,000, having “been flawlessly renovated to meet the highest standards” in between. The math is pretty easy, given the near-round-number Peak price: that’s a gain of $626,000, or 63% over the (former?) Peak of the Manhattan residential real estate market. In terms of the StreetEasy Manhattan Condo Index, the January 2008 to October 2013 change was 3.5%, so the change in condition has to account for nearly all of that gain of $626,000. Yet there is no way that the intervening renovation cost much more than half of that (and probably cost less).

“before” is a little vague; “after” is a lovely loft that still has some limitations

If you start on StreetEasy you get a maddeningly opaque listing description preceding the 2008 sale, no interior photos, and a floor plan that might have been sketched on a napkin. This is what I mean by maddening: a loft that (we now know) underwent a substantial renovation was then babbled as “magnificent”, and more.

this magnificent and bright two bedroom apartment featuring five large windows, open kitchen, breakfast nook, and plenty of close space throughout. This apartment will excite you with its artistic combination of patterns which include a beamed ceiling at varying heights and a layout that will mesmerize you.

That doesn’t sound like an in-need-of-gutting loft, but the facts suggest otherwise. (By the way, you don’t often see broker babble that misstates the number of windows, but that’s just icing on the maddening 2008 cake.) More maddening: I have no idea what “artistic combination of patterns” means, or what might mesmerize you about a simple rectangular layout with bedrooms at either end. But I digress….

That (simple) layout, back in the day, featured a single bathroom, awkwardly en suite in the east bedroom. The new layout is equally simple (without being, you know, mesmerizing), but adds a second bathroom abutting the old-but-now-renovated one, adds a walk-in closet in that east (master) bedroom and a closet wall in the west bedroom, and brings the kitchen further west (into a “U”, instead of the former, shorter, “L”). Not a lot of new carpentry there, some new kitchen work, and one new bath with the other “completely renovated”.

The 2013 babbling lacks details about the quality of the upgrade (beyond “flawless”):

sprawling 2 bedrooms/2 bathrooms loft has been flawlessly renovated to meet the highest standards. The southern exposure helps soak the home with sun and offers the classic Chelsea skyline views from every room. At the center of it all is the newly renovated and extended kitchen that is open to the living room and dining room. Making it the perfect place for the gourmet chef that loves to entertain! This high floor residence is the quintessential loft with high beamed ceilings, original hardwood floors, and two split bedrooms. The master bedroom has an incredibly large walk-in closet and a completely renovated on suite bathroom.

(Still maddening: “on” suite bathroom!)

You see no proper proper names or materials in the 2013 babble and if there are any in the photos they are not evident. Kitchen appliances could be GE Pro, but if the counters or backsplash are brag-worthy the marketing effort is curiously modest. Note there are no photos of the new or renovated bathrooms. Note that there are no special built-ins in the babble or in the photos, though I assume the radiator covers are new.

Did you see the window air conditioners in each room? I assume that there is no way to do central air in this space, either because the ceilings are too low or because there is no place to hang compressors or something else. But that is a major limitation for a loft sitting only 50 or so feet above the all night buses and truck traffic on West 23rd Street. You are going to get noise bleeding through those air conditioners no matter how high quality the windows are. (Did you see anything in the broker babble about Pella or other brag-worthy window upgrades? I didn’t either.)

How “sprawling” can a “1,200 sq ft” loft with bedrooms at either end be? Each room, to me, is more “modest” than “sprawling”, and the layout as a whole reads as more limited than mesmerizing (sorry) voluminous, or sprawling. (Note the modest ceiling heights in this former hotel.)

Net-net, a nice little loft, efficiently laid out and nicely (sorry) flawlessly renovated. That just sold for $1,354/ft in a coop that is not known for being a deluxe building. Unless the renovation reads in real life as much more high quality than it appears in photos, this is a head scratcher. That’s if the loft really is “1,200 sq ft”. It was billed as “1,050 sq ft” when it sold in 2008, and is carried at that size in our data-base. (At that smaller scale the recent sale was a rather remarkable $1,548/ft. In a coop that is not known for being a deluxe building.)

comping lofts should not be this hard

The Market says that this loft is now worth $626,000 more than it was before it was renovated. The listing photos show a loft that is nice, but hardly over the top in quality, no matter how “flawlessly” it may have been renovated. The Market says this is the most valuable loft in the building, a building in which 3 other similarly sized lofts have sold in the 12 months before this one did.

The “1,200 sq ft” loft #7F sold this past April for $1,500,315 (above ask, setting a new building record, temporarily). That claimed a “top rate renovation” with a little more detailed babbling than with #6C and photos that show a level of finishes that appear to the the equal to that of #6C, if not better. (Note the black granite countertops, custom built-ins, recessed lighting, and Empire State Building views.)

Loft #10B sold for $1.375mm in March. It might be “1,300 sq ft” and looks and sounds like a similar quality to #6C, though it is dangerous to put too much into how a loft “looks and sounds” on the inter-tubes.

Loft #5D sold 51 weeks before #6C for $1.275mm without much bragging (and with a kitchen that might be from the 1980s). At “1,200 sq ft”, it was close to historic highs in the building for its time, with only a few lofts having sold at higher prices on a dollar-per-foot basis. (Scan the past Activity tab on the StreetEasy building page, here.)

In this sequence, #7F looked like an outlier when it sold; #6C sticks out more. In a building in which a lot of loft sales bounced around $1,000/ft, #7F and #6C may be resetting the bar. Neighbors will be happy. Buyers will be frustrated.

But I come back to this: the #6C buyers in 2008 turned sellers in 2013 sold for $626,000 more than they paid for it, after a renovation that probably did not cost $300,000. My money is on less than $300,000, and I would have to see receipts to be convinced otherwise. What a strange and wonderful (for them) thing. Caveat emptor, indeed!