commodious penthouse loft at 130 Fulton Street sells after 1 year, 27% off first ask

up 1.4% over 2006 sponsor sale, but still

Continuing a theme this week that it is possible for a seller to over-reach even in a seller’s market, I present for your consideration the  Manhattan Penthouse loft at 130 Fulton Street, “commodious” with “1,410 sq ft” inside and another “1,100 sq ft” of terrace, which was first offered for resale on August 10, 2012 at $2.55mm and closed on August 13, 2013 at $1.85mm. Apart from the use term “commodious” (which is a rare entry in the Broker Babble Handbook), the marketing campaign was unusual for taking 49 weeks to get to contract. The full history has a long (but unfulfilling) middle, bookended by prices of short duration; in other words, it took this seller a while to figure out that The Seller’s Market was not working out as hoped:

Perhaps The Market was just waiting for the seller to drop that opening “2”; or perhaps the rising tide of overall Manhattan residential market trends just took a while to get this high on the beach. Let’s look at the space and the views to see what was on offer.

great space, but …

Fans of enthusiastic broker babble will be disappointed with this Penthouse listing, as the highlight is “commodious”. We’re told that the loft is “mint” and has “iconic views”, but there’s no name-dropping or material descriptions. There’s a school of thought that you market to emotions rather than with details; this selling team must have gone to that school. The Penthouse is an “oasis”, comes with “the [!] most wonderful feeling of being Away From It All”, while promising “gracious entertainment” and “private enjoyment”. Well OK then.

The listing photos don’t add a whole lot more, with the (only 2!) interior photos telling me that there’s a fireplace and the (only 2!) exterior photos telling me that the plantings are extensive and lovely. There’s no pic and no brag about the kitchen (or the single bath) and no shot of those “iconic” views. The text does tell you that there’s but one bedroom (at “1,410 sq ft” and no obvious place for a decent second bedroom, that makes this a One Bed Wonder) and the floor plan shows the bathroom opens somewhat awkwardly into the “dining room” (the seller apparently used that space for a piano; whew).

The glory of the space is the terrace, then. Nearly a third longer than the interior space and 12 feet deep, that is one heck of an amenity, promising “gracious entertainment” and “private enjoyment”, indeed. It’s proportionately too big in comparison to the indoor space (“1,100 sq ft” v. “1,410 sq ft”) for all of it to be valued at top dollar, if we follow The Miller’s rubric for valuing outdoor space (which I always use as a ballpark reference), but it has great utility (being on the same level as the loft, with direct access from multiple points, providing visual privacy for the interior, and on and on). From the photos and (muted) babble, the outdoor space is by far the selling point of the space, even more so than with other rooftop lofts.

Without more information about the interior finishes it is a little difficult to use other sales in the building to establish a baseline for interior values, but since we’re just riffing, let’s see what we can ballpark. Start with The Miller’s rubric of outdoor space being valued between 25% and 50% of the value of the interior, with greater value for plusses like greater utility (present here) and lesser values for minuses like being larger than 50% of the interior (again, here). Working backwards, that would assign an adjusted value of the entire space between $944/ft and $1,131/ft.

The last sale in the building, closed just a month before the Penthouse, suggests that the interior and exterior of the Penthouse were valued closer to par. The “1,890 sq ft” loft #6A sold for $1.71mm on July 26 with very enthusiastic bragging about the finishes:

incredible newly architect-designed loft …. 11 barrel vaulted ceilings and 10 dramatic loft windows with triple exposures that invite fabulous light plus showcase stunning vistas of the city and new Freedom Tower. … Timber Grassi Bamboo floors, custom silk Roman shades, and custom-outfitted custom closets including walk-ins. A professional windows kitchen with Italian cabinetry by Linea Quattro, Azul granite countertops, a large pantry and top-of-the-line line appliances (a Wolf range, exhaust hood and Sub-Zero refrigerator) will excite any chef. The luxurious spa-like baths with separate dressing area and linen storage are also creme de la creme, and impeccably adorned with floor-to-ceiling marble, double vanity sinks featuring Caesarstone quartz, lacquered cabinets with integrated lighting, and Duravit, Vola and HansGrohe designer fixtures and accessories.

Doesn’t that sound like a more exciting interior? Yet #6A sold for (only) $905/ft. The penthouse interior has to be worth less.

My guess is that the difference in interiors is much greater than the professional kitchen plus spa-like baths in #6A compared to the anonymous kitchen and bath on the roof, but taking only those elements and conservatively assuming $100,000 as the difference in value between the penthouse plumbing and that of #6A, that  (again, conservatively) knocks $71/ft off the penthouse interior based on the #6A comp, bringing the penthouse interior down to $836/ft. As luck would have it, that matches nearly exactly the interior value of the next most recent sale in the building, loft #5A, which sold for $1.56mm ($842/ft) on June 29, 2012. Yes, that was a year ago, when the overall Manhattan market was 10% lower than the current market per the StreetEasy Condo Index, but that was also in much better condition than the penthouse.

we’ve been here before

That loft was babbled enthusiastically as a “no expense spared” renovation and was the subject of my August 7, 2012, 130 Fulton Street loft sells 4% over 2007, but there’s a really big catch. Before that, I hit loft #12A at $879/ft in April 2012 in my May 2, 2012, 130 Fulton Street loft with incomparable light comps out 3% above …, which also boasted a renovation that sounds like that of #6A. Bringing these two lofts up to the current market (or August, when the penthouse sold and when the StreetEasy Condo Index has its most current data), those two lofts would be at adjusted values of $926/ft and $967/ft, both suspiciously higher than #6A in July 2013 at $905/ft, but hey … we’re just ballparking here.

Actually, I am going to stop with that riff, as I believe that these three sales in the building show the limits of applying a macro number like the StreetEasy Condo Index (intended, you will recall, to “give a feel” for the market) to specific properties. But here’s the overall point: those three sales are persuasive data points that The Market did not value the less-well-dressed Penthouse at the same levels as its well renovated neighbors. And, therefore, that The Market valued the Penthouse terrace very highly.

Let’s try that …. If the interior was only worth, say, $800/ft that accounts for about $1.125mm of the recent sale, with the balance of $725,000 allocated to the terrace (at “1,100 sq ft”, that’s $659/ft). Which is long way of saying that the terrace was probably worth about 82% of the interior on a dollar per foot basis. While way outside The Miller’s rubrics for valuing outdoor space, those are just guidelines; the actual sales are facts, and I believe they say that the buyer just paid $725,000 for a lovely terrace attached to a loft interior that was worth (only) $1.125mm. More or less.

I didn’t know that was where I was going when I started, but that seems to be it. If I lost you on the way, my apologies.

what did the seller buy in 2006?

There’s just one more question I have and you might be pleased to see that I don’t have the answer. I don’t know what condition the Penthouse was in when the recent seller bought it in 2006, paying $1,613,926 to do so. Of course that would be interesting to know in order to see how disappointing the sale at $1.85mm was.

As you’ll see in the August 7, 2012 post, other units in the building were sold by the developer as ‘white boxes’; not quite raw but unfinished except as to floors, a kitchen, and a bath, but not really built out. (Hence, all that babbling about the finishes in those other lofts.) If the recent seller had also to pay to build out the penthouse, well, that would increase the disappointment over the small difference between $1.85mm and $1,613,926. But one possibility is that the muted babbling about the penthouse interior is a hint that the new owner did little or nothing to the space since buying in 2006. Our listings data-base is no help, as there is no description of the 2006 condition, though it does show the loft as (already) a 1-bedroom. I will stop here before wandering down another path.