29 East 22 Street loft closes off 40%

(from first ask, to last gasp)
When the Manhattan loft #5N at 29 East 22 Street came to market in May 2008 at $2.75mm, they did not realize that The Peak was behind them. Painful hindsight 2 years later told them that The Market valued #5N at $1.625mm. How did that  happen??

At the time they started in May 2008, the most recent past sale was the entire 9th floor, which had recently sold (in November 2007). Perhaps they knew something about that sale that is not publicly available, even in the inter-firm data base. There was no listing associated with that sale, and those "4,000 sq ft" cleared for $5.5mm. The prior sale before that was in February 2005 (#6S, at $1.375mm for "1,600 sq ft"). That one had a renovated bath, custom built-ins, and an overall condition of "excellent", although the surviving listing description is notably restrained in its praise.

That spread between $1,375/ft in November 2007 (for a huge space) and $859/ft in February 2005 is huge, especially for a small building, which would not have made the original pricing decision for #5N easy. When they decided to launch the "2,300 sq ft" #5N in less than tip-top condition (more on that later) at $1,196/ft, a smaller loft in the same building (#3N) had been on the market for a month at $1,156/ft. (Spoiler alert: the #3N sellers also did not realize The Market had changed, but they were quicker to react.)

Whatever else you could say in that Spring two years ago, #5N had some company above $1,100/ft.

who loves company?
I’ve touched before about how one neighbor’s price can distract another neighbor, leading to (yes) misery for at least one of them. (Links below.) How’s this for some misery-loving company:

Note that both lofts had significant price drops by the end of 2008 ($600k for #5N, 22%; $355k for #3N, 19%) but that the last price drop for #3N (in February 2009) did the trick, a contract in two more weeks. Note that #3N bit a big bullet to get that contract (taking another 17.6% off the last asking price). In contrast to the busy neighbors in #3N, the sellers in #5N sat at $2.15mm from November 18, 2008 to April 13, 2009, during which time #3N turned its trick.

The public record for #5N gets a little squirrel-y after they made the three Spring 2009 price drops in quick succession. StreetEasy has it "de-listed temporarily" as of September 30, 2009; the inter-firm data-base has it  Temporarily Off The Market as of September 3, then Expired as of September 30, then Temporarily Off The Market (again) as of December 30.

There was a flurry of open house activity in #5N from the price drop in April 2009 into early August (15 open houses in 15 weeks), the first open houses here since January.

quiet marketing? private sale?
With a largely silent record from September 30, 2009 until closing the deal on April 30, 2010, my guess is that someone who had seen #5N in the Summer came back to the owners 6 months later asking do you really want to sell? (Interesting that the spread between the last ask and the clearing price is a relatively modest 4.3%.) Maybe they had resigned themselves to not selling, until someone reappeared with real money. I wonder if Halstead got paid, or if the sellers waited just long enough to avoid a legal obligation to compensate the agent who carried the listing from May 2008 through September 2009. (She does not show this sale on her list of past sales.)

Until proven otherwise, I assume that these sellers were exhausted by the process and ran with the offer that closed two weeks ago. They pretty clearly did not want to put it back on the market formally. Might they have gotten more through an active campaign this Spring than $1.625mm ($706/ft)? Maybe. But #3N got only $719/ft. And maybe they ‘saved’ 6% by doing a private deal without brokers.

It is hard to argue with a seller who gets out, after having been beaten down (and beaten up) by The Market. Tough comp for the (surviving) neighbors, of course, but not their problem.

back to #3N
I hit that #3N sale on July 22, 2009, 29 East 22 Street closes but is the calendar off?, which might have been my first attempt to compare a 2009 closing to a 2005 closing (in this case, different lofts, but of the same size and in the same building). After giving condensed listing histories, I asked then which closing was (then) recent, and which loft closed in 2005.

back to #5N
I said up top that #5N was marketed in less than tip-to condition. I would not say that this condition hampered the marketing; just that this condition was not helpful given how far off The Market the price was. The loft was only generally praised for its condition, with more listing bragging about sprawl, light, flexibility, and (a bugaboo of mine, I realize) "gracious"-ness. There is also the specific notation that baths need TLC, and the general comment that alternative floor plans are available. Sounds ‘tired’ to me, but I did not see it.

back to #6S
As luck would have it, the loft that I compared #3N to in that July 22, 2009 post because it closed in 2005 also traded in 2009. This was also a private transaction, in StreetEasy parlance "[n]o listing associated with this closing", like the prior sale of #6S, and (probably) like #5N. (What’s up with these shareholders? Are they allergic to brokers??)

With that September 17, 2009 sale of #6S, we have a direct 2005 vs. 2009 same-loft resale. At $1.245mm in 2009 and at $1.375mm in 2005, #6S suffered an apparent loss in value of ‘only’ 9.4% — not the 16% using the (poor) proxy of the #3N sale in June 2009. (Big caveat: with the two #6S sales being private, it is hard to say that they are truly best-price-available-in-the-market, they are just the prices that were achieved; however, #6S in 2009 did better than #3N in 2009.)

neighbors, Hatfields & McCoys
I love these same-building discussions, especially when neighbors are directly competing against each other for a sale. Here is a selection of Neighborly Ruminations from the Manhattan Loft Guy archives:

April 9, 2010, closing at 40 West 15 St relieves ALL shareholders
March 9, 2010, 45 Crosby races to contract above ask / could it be a million dollar renovation?

May 6, 2009, pretty efficient (depressed) market at 505 Greenwich Street as both 6F and 7F sell, off 25%
April 17, 2009, break away to win the neighborly competition / so many lofts, so many dollars … but no sales (yet)
January 7, 2009, are they fooling only each other? / 3 neighbors push, 1 smiles
December 12, 2008, more unintended consequences in petri dish of Tribeca neighbors
December 7, 2008, selling the neighbor’s loft / unintended consequences in a Tribeca petri dish?
November 30, 2008, neighborly competition leads to neighborly mistakes? the laboratory at 24 East 22 Street

© Sandy Mattingly 2010