79 East 2 Street loft sells +57% in 19 months with same floor plan, different skin

selling design to a designer, dearly
The Manhattan loft on the 3rd floor at 79 East 2 Street got a lot of press last week because of the celebrity buyer and celebrity seller, as well as because of the spread the seller got between buying this “2,681 sq ft” loft in July 2009 and selling within 2 years. It is very difficult to get good loft comps in this part of the East Village, so any loft that sells twice in two years almost has only itself to look at. In this case, it proved to be a poor comp for itself, in the sense that the 2009 sale cannot rationally support the 2011 sale.

The irony (to Manhattan Loft Guy, at least) is that the loft that sold for $2.65mm on July 16, 2009 has the exact same floor plan as when it re-sold on March 14 for $4.15mm, though it has been dressed up a bit differently, and that a designer paid a premium because a guitar player dressed it up.

The loft was in beautiful condition when purchased by the bass player not quite two years ago, but that was a very different market. Stop me if you’ve heard this before … the whole post-Lehman nuclear winter was still in force in the overall market when the 3rd floor came to market on May 6, 2009 at $3.1mm, and a quick drop to $2.999mm helped generate a contract by June 15 at $2.65mm. Not many lofts were selling that quickly in the second quarter, or even at all.

Because it is hard to get comps on large beautiful lofts in the East Village, it is hard to put that sale in context other than to say that many lofts throughout Manhattan that sold in early 2009 did not match the $988/ft garnered by this one, and that most took far longer than 39 days to find a contract. (Of course, you can check the Master List of Manhattan Lofts Sold Since November 2008 for details on downtown loft closings around this time.) At that time, most of the brick walls were sheet-rocked and the chef’s kitchen featured a 6-burner commercial Garland cook-top with double oven. When re-sold last month, the brick had largely been exposed and the chef can now work with a 6-burner professional Wolf cook-top with double oven, with new cabinetry and possibly a new “farmhouse” kitchen sink. It is hard to say from the pix and babble, but there may be new wide-plank flooring (certainly, the floor finishes have been changed, at least).

If other things were “renovated” since 2009, it is hard to tell from comparing the pix and descriptions and there is no discernible difference in the two floor plans. In between sales, the skin was new (brick exposed throughout, floor colors changed. kitchen cabinetry replaced), but the structure stayed the same. Yet the ‘new’ space was valued at $4.15mm, or $1,548/ft. In a no-frills 4-unit condominium converted in 1997 in a non-prime loft neighborhood. That is a 57% appreciation in under two years.

hard to comp out this price anywhere
Again, you can check Master List of Manhattan Lofts Sold Since November 2008 for details, but the only downtown lofts I see that have sold this year above the 3rd floor’s $1,548/ft are in newer high-amenity buildings and/or are in prime neighborhoods (as opposed to being across the street from the explosive cemetery, or on the next bock down from the Angels). None exhibited the velocity of change in sale from 2009 to 2011 that the 3rd floor experienced.

• 99 Jane Street #4C (up 7.5% since July 2007)
• 7 Hubert Street #4A [Hubert] (down 10% since September 2004)
• 542 LaGuardia Place #5B (up 66%, but since 2003)
• 101 Warren Street #1510 (down 2.3% since November 2008)
• 62 Cooper Square #9C [Carl Fischer] (up 31% since 2008) (added April 6, when I corrected the size)

Loft fans (or music fans) would say the sale of the 3rd floor at 79 East 2nd Street is extraordinary. I bet an appraiser would say it is unjustifiable.

the feet grew
In both sets of broker babble, the 3rd floor is listed as “3,000 sq ft” (well, in the last one it was “nearly 3,000 sq ft”). I don’t know where those numbers come from. The StreetEasy closing records both say “2,681 sq ft” (March 14, 2011 here, July 16, 2009 here), as does Property Shark. No surprise that this number is also the number used for “square footage” in Schedule C of the condo declaration (captured from ACRIS at page 21 of 54 here). Sigh.

the chatter
Curbed and The Observer both hit this sale on March 31, the day the deed was filed; the next day it got re-circulated on NearSay. All of these hits mentioned the celebrities on both sides, and the scale of the resale gain.

© Sandy Mattingly 2011