white box loft sells for $847/ft at 251 West 19 Street, Manhattan Loft Guy is surprised

staying in ‘project’ mode
Yet another buy-and-build Manhattan loft that closed recently has caught my eye. Unlike the Manhattan lofts hit this week that were total gut jobs (January 25, 303 Mercer Street loft with nothing but potential sells for $640/ft, and January 26, gut job loft at 395 Broadway provokes war, gets $1,000/ft) the loft #9D at 251 West 19 Street was marketed without the need for demolition, as a ‘white box’. (Although the listing on StreetEasy says this is an either/or loft [“as is or a white box”], the inter-firm data-base shows that this had been white-boxed by the time that it sold on December 15.)

This loft is more like the high floor, light+views loft at 395 Broadway that got $1,000/ft than it is like the larger but darker loft at 303 Mercer Street that got only $640/ft. At “1,777 sq ft”, this loft is between those two lofts in size, and in price, having sold for $1,504,668, or $847/ft.

I am not saying that these three ‘project’ lofts make a trend, but what is interesting about this trio is that buy-and-gut or buy-and-build lofts are more difficult to purchase in a tight lending environment, as there are fewer buyers qualified to put down the requisite amount and have an appropriate level of liquidity after spending cash to gut or build out. And we have definitely been in (still are in …) a tight lending environment.

What is interesting about this particular loft is how it did in relation to others in the building. It is no surprise that it did less well than others in the same line that were fully finished; but I am rather impressed with how well it did in relation to contemporaneous nearby competition.

location + light + potential
While not as elegantly put as yesterday’s candidate for Broker Babble of the Year, the listing description for #9D hits the high notes: “unbelievable views”; “unbelievable light”; 12" ceilings; “perfect Chelsea location”. The condo was converted in 2002, but apparently had been residential (rentals) before that; #9D was sold as a sponsor unit, which is why it was originally marketed “as is or a white box”.

The marketing campaign started in March last year at $1.875mm and bounced down to $1.675mm in four moves (one of which was a very brief feint at $1.625mm). Contract was signed on November 3 (according to our data-base) at that $1,504,668.

we have some D comps
The prior “D” line sale was very current when #9D came to market in March: #4D had been offered for sale since April 2009 (brrr) and went into contract on April 27, 2010. #4D was done: cherry floors, chef’s kitchen, central air, master with steam shower and soaking tub. It started at $1.999mm in that chilly market of “Spring” 2009 and was offered at $1.825mm by the time #9D came to market on March 13, 2010 at that higher price. #4D closed on June 18, 2010 at $1.7mm, but the sponsor probably knew the contract price soon after the contract (because the sponsor was probably still represented on the condo board).

Kinda weird that the sponsor continued to offer #9D at $1.777mm after #4D closed at $1.7mm, not to mention holding at essentially #4D’s clearing price until negotiating to that $1,504,668 by November 3:

June 7 $1.777mm
July 22 $1.725mm
Aug 12 $1.625mm
Aug 16 $1.675mm

StreetEasy lacks the listing history for the other “D” loft that sold in 2010, although it does have the clearing price for #6D at $1.95mm on February 3, 2010. Although that loft was “immaculate” rather than white box (state-of-the-art kitchen, master suite with steam room and heated stone floor in the bath, universally-controlled lighting, shades and electronics), the fact that #6D got $1.95mm off the $2.195mm asking price must have been very distracting for the sponsor when pricing #9D just a month later (#4D lingering, notwithstanding).

And … consider how frustrating it must have been for the sponsor to wait for the tenant to move out (die??) from #9D, considering that #8D sold at The Peak for $2.475mm. That loft benefited from almost prefect timing (contract January 30, 2008, closed on April 17) and was an over-the-top renovation. (The very experienced listing agents “described” it as in “[w]ords cannot describe” condition, although they — of course — gave it a shot. Talk about distracting: that sale at $1,397/ft showed what The Market might do under perfect conditions, to a loft in perfect condition.

but #9D was a strong sale
All this “D” comping was water under the bridge for #9D by the time that it sold on December 15 at $847/ft, as #9D had very local competition from #5A. Although a little smaller than #9D (“1,653 sq ft” vs. “1,777 sq ft”), #5A was functionally equivalent in layout (2 BR + 2 bath, fully built out), also benefited from a corner location in the building, “Bright Northern View provide fabulous Natural Light”, and a renovated kitchen and “updated” baths. Hard to believe, but #9A kicked the stuffing out of #5A.

Compare the #5A listing history to the equivalent period for #9D, above:

June 10, 2010 new $1.679mm
Sept 20   $1.595mm
Oct 22 contract  
Dec 23 sold $1.414mm

Compared to #5A clearing at $855/ft in a fully-finished condition, #9D as a white box at $847/ft is rather extraordinary, isn’t it?

© Sandy Mattingly 2011

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