did the sponsor of 186 Fifth Avenue lofts get squeezed in first resale?
the runt of the litter
Both times the Manhattan loft on the 4th floor at 186 Fifth Avenue have sold have been odd sales. Back on those thrilling days of yesteryear (2007), when four full-floor lofts were offered by the sponsor as white box specials, the 4th floor failed to sell while the other three sold; when the sponsor finally unloaded the 4th floor 2 years later the price was only about 60% of the three 2007 sales. When the 4th floor became the first of these lofts to resell (on April 7), it sold at nearly a 40% premium without having been built out.
Let’s talk first about what buyers got in those white boxes, then look in detail at the very peculiar market reactions to the 4th floor in the last 4 years.
StreetEasy does not have the original sponsor listings from 2007, but our data-base shows that all 4 residential floors were offered with the same description as when the 4th floor came back to market as a fire sale in July 2009. Per that StreetEasy listing:
Open condo lofts; Own your own floor and get ready to build your dream home. All floors will have Central A/C units; new windows; internet high speed cable; high ceilings; new oversized arched windows; view of the famous Flat Iron Building and Madison Square Park.
The sponsor must have bought a long-lasting web domain, as the building website is still active. There you will find the floor plans (click Building And Features, then Floor Plans) for the four full-floor lofts (the top floor at “2,345 sq ft” is just a tad smaller than the others at “2,418 sq ft”), none of which show even a bathroom or kitchen. (They were offered as having residential Certificates of Occupancy, so there must have been a kitchen and one bath; just nothing ot brag about, and nothing to be retained by someone doing a full build-out.)
a cornered Long-and-Narrow
Lofts here are Long-and-Narrow rectangles (81’ 3” x 25’ 6”) but have the huge advantage of a long wall of 13 windows north over 23rd Street, as well as 4 windows east over Fifth Avenue. Views of Madison Square and the Flatiron Building are not too shabby. Having the sponsor-installed central air is essential, as no one is likely to ever open one of those 17 windows, with the 23rd Street traffic and the (now, much-reduced Broadway and Fifth Avenue traffic).
The plumbing stacks are not on the floor plans, but the lofts are said to be capable of 3 bathrooms. One odd element of the floor plans is that the elevator does not open into the full-floor lofts, but opens onto the stairwell. The placement of the elevator makes me wonder if the building was built in 1883 with an elevator, or whether it was added later. (It is right in front of a window, and very close to that north wall.)
only 3 buyers in 2007
I have pieced together from our data-base the sponsor listing histories from 2007, when three lofts sold and the 4th floor did not. There are twists and turns even for the successful (2007) sales, while the 4th floor saga is fascinating in a can’t-take-your-eyes-off-car-wreck kind of way:
|Sept 6, 2006||3rd fl||new to market||$2,901,600|
|7th fl||new to market||$2,814,000|
|Sept 22||3rd fl||$2,218,000|
|Oct 13||3rd fl||$2,418,000|
|Jan 25, 2007||5th fl||new to market||$2,345,000|
|Feb 23||3rd fl||contract|
|Mar 6||5th fl||$2,418,000|
|Mar 21||7th fl||contract|
|July 2||5th fl||contract|
|July 3||4th fl||new to market||$2.75mm|
|Oct 25||4th fl||$2.99mm|
|Oct 29||5th fl||sold||$2,462,528|
|Oct 31||7th fl||sold||$2,387,796|
|Nov 9||3rd fl||sold||$2,418,000|
|Jan 15, 2008||4th fl||$2.8mm|
|Sept 11||4th fl||$2.55mm|
|July 16, 2009||4th fl||$1.95mm|
|Aug 13||4th fl||contract|
|Sept 30||4th fl||sold||$1,527,375|
In broad strokes, the developer started high on two lofts then quickly adjusted downward, got fairly quick contracts on 3 lofts, and for some reason held the 4th floor back until the others were in contract.
Note the 4th floor prices. I hesitate to use the word “greedy”, even for a developer, so let’s just say that the developer overshot The Market with the 4th floor asking prices, all of which exceeded the highest other clearing price until well into nuclear winter when the last price drop was dramatic. Then note how quickly the developer found a contract after that last dramatic price drop, and by how much the developer was then negotiable.
Either the developer finally got bored with it, or the buyer sensed blood in the water, or a combination of the two: the deal finally got done at a 22% discount from the last asking price, a 40% discount from the second-to-last asking price, and a nearly 50% discount from the asking price set as the other 3 lofts were selling 20% lower.
paging Patti Lupone
Of course I have no idea what the developer paid for the conversion of the upper 5 floors into residential units, or what it cost to carry the building from when it was purchased in 2000 for $4mm. The developer seems to have held on to the commercial space on the first two floors (and basement? there are 3 commercial units in the condo, per Property Shark), and apparently still owns the 6th floor residential unit.
The four lofts sold by the developer cleared at roughly $8.7mm. The commercial tenants pay rent every month (ka-ching!). That 6th floor loft is worth about $2.12mm (see below). This is very likely a very successful development, the 4th floor awkwardness notwithstanding.
at least $2.12mm
That 4th floor buyer in September 2009 made out pretty well also, having bought for that $1,527,375 and sold 7 weeks ago for $2.12mm. That sale is also very odd, as I mentioned up top.
First, the listing description is a little coy about it, but the open floor plan makes it clear that the 4th floor is still a white box. You wonder what took so long (or, what changed), as the resale was offered first on March 1, 2010 for $2.495mm, with a month-long gap between that listing and the current one. That is a five month gap between purchase and first attempt to re-sell, and a bold attempt to re-sell at a 63% premium. But wait … there’s more!
a break in the space time continuum??
The flipper is self-identified as “a well known real estate developer” in this weird listing for the 4th floor as a fully built-out, 3 bedroom, 3.5 bath loft. In some parallel universe, the 4th floor had been “custom designed by renowned Architectural Firm Mojo Stumer” and then built to that design. Note the use of the present tense in this babble, in support of a $3.495mm offering available in March and April last year, and again for the last 6 months of 2010:
The serene foyer and hallway leads to an Open kitchen with a polished Bianco Namdia countertop, Timur 18 x 18 flooring and dark walnut cabinets. Appliances include Liebherr refrigerator, Viking dishwasher and range, Miele hood, & Bosch washer and dryer. The Master Suite bath includes a custom double walnut vanity, nero assoluto granite tile, accents of modern mythology mosaic tile and white milky glass wall tile. This spa bath has a rain head shower and soaking tub with kohler fixtures and lacava hardware. Each bedroom suite has its own custom bath. Also there is a powder room off living and dining area. [That built-out floor plan is here.]
In the actual universe, of course, the 4th floor was never built out, and sold for $2.12mm as a white box, as described in the current listing.
How weird is that??
Fun stuff for a holiday weekend. Enjoy!
© Sandy Mattingly 2011