Manhattan Loft Lab at 40 West 15 Street features building record, failed marketing, opposite styles, + more!
the good news: loft #6A overcame an awkward footprint to sell over ask
The sale a month ago of the “2,100 sq ft” Manhattan loft #6A at 40 West 15 Street is a fascinating window on a variety of topics, but let’s start with the one that made these ballsy sellers happy: to market on March 17 at $3.125mm, they found a buyer (several buyers?) and a contract by April 5, and closed on May 15 at $3.325mm, two million dollars more than they paid eight years earlier.
Here’s what they sold: a ‘no details overlooked’ renovation that features ‘painstakingly restored wood beam ceilings’ and that, with a renowned architect’s help, made lemonade out of lemons by “embody[ing] the essence of open-plan large living while incorporating separation and privacy in its well-designed floor plan”. The market fact that this space is worth 20% more than any loft in this longtime Flatiron coop is confirmation that The Market will love design and finishes that are quintessentially loft-y, even if the “well-designed floor plan” means the two sleeping areas lack windows.
Here’s that well-designed floor plan (and awkward footprint):
That 900+ sq ft great room is a (errr …) great space for entertaining, with crowds no doubt drifting north to the 12 windows (Empire State Building + lots of sky), with this beautiful large kitchen in the corner:
If people tell you that “no one” will buy a loft with bedrooms that lack windows, you show them this loft (and you’re welcome).
one neighbor is jealous
When loft #6A was brought to market on Green Beer Day at $3.125mm, the other folks on this top floor were three months past a marketing campaign that was brief (at two months) and unsuccessful (at $2.95mm). The “2,000 sq ft” next door loft #6B is beautiful in its own right, but so different in style as to be surprising that the pair are in the same building. From the ceilings to the flooring, this is more a black and white palette, with a single cast iron column establishing classic loft cred.
The footprint is equally awkward as next door, but all but the guests sleep with windows:
Will the success of #6A bring these folks back to market? Maybe, but the #6B owners were on from October 21 to December 22 at $2.95mm, well more time than it took #6A to negotiate multiple offers into a contract $375,000 higher. For present purposes, what is striking to me is the quick success of one loft and the lack of success of the other. Well, that, and the fact that these two lofts look completely different.
there is yet another Manhattan loft style on display, 3 floors below
The folks who sold loft #3B just two months before #6B came to market made very different style choices than in either of the top floor lofts and they ‘solved’ the awkward footprint in a very different way than the #6B owner. That, and they were successful at a price that should have given the #6B owner confidence in coming to market at $2.95mm.
They squeezed a lot of utility into (almost exactly) the same awkward footprint on the third floor:
This layout manifestly worked for the woman who just sold it (possibly, for the new owners as well), but the result leaves a reduced sense of ‘volume’ than in either of the 6th floor lofts.
Volume or no, this loft flew off the shelf: to market on June 3 last year, in contract two weeks later, and closed on August 25 at the full ask of $2.75mm.
Hence, the #6B owner came to market two months later at ‘only’ a $200,000 premium to this sale, with arguably a more sophisticated layout and renovation and the light from being three floors higher (with One WTC views). I, like him, no doubt, am surprised that #6B couldn’t negotiate to a deal after this neighboring sale.
On a side note, however awkward I find the “B” line footprint to be, it is evidently rather flexible. Look at the very different locations for the kitchens in the two “B” floor plans above. This is just one reason why I love real Manhattan lofts (in buildings converted from prior non-residential use, mostly in the 1970s and 1980s). Take virtually any “apartment” building, or most (if not all) newly built “loft” buildings, and the kitchen on one floor is going to be in exactly the same place (and likely be exactly the same size and configuration) as in every other unit in the same line. And if there were the possibility of different layouts, the coop or condo board is likely to rely on a no-wet-over-dry rule to prevent much variation. (Rant, ended, resuming ….)
sellers well rewarded, and they earned it
Did you forget that italicized number in the opening sentence, way up top? The folks who just sold loft #6A above ask at $3.325mm bought the loft on June 23, 2009 for … (you can guess, by now) … (but let’s draw it out) … $1.3mm. That full listing history is a doozy, and merits a column for annotations:
|Mar 17, 2008||new to market||$2.195mm||1Q08 was The Peak of the Manhattan market to that time|
|Sept 4||contract||took too long to get to contract (11 days before Lehman’s bankruptcy filing)|
|Oct 21||back on market||$1.795mm||buyer got cold feet, or lost wealth as stocks dropped??|
|Oct 22||$1.85mm||seller re-thinks pricing, mis-perceiving the peril|
|Oct 24||hiatus||more re-thinking??|
|Dec 5||back on market||$1.795mm||“chasing the market down” was a saying back then|
|Feb 4, 2009||$1.695mm||still chasing …|
|April 15||contract||seller relieved, but unsure if deal will close, right?|
|June 23||sold||$1.3mm||40% off original asking price|
(I’ve ignored the week in February that StreetEasy has the loft “sold”, as it didn’t; this was likely someone hitting the wrong key in updating a listing.)
If you weren’t paying close enough attention to the overall Manhattan real estate market at that time, you won’t remember qhite how traumatic the market was after the stock market (and “lending” institutions) reacted to Lehman’s bankruptcy filing on September 15, 2008. Properties that closed in that first calendar quarter of 2008 recorded the highest prices ever observed in Manhattan (at a time when the overall US residential real estate market had been in a trough for five or more quarters), and by the end of the third quarter the bottom fell out. Having blogged it in real time (check the archives!) I know there was a constant tension faced by buyers as 2009 played out: yes, prices are down, but how much lower will they go?? The only sellers who closed in the six months after Lehman were sellers who really needed to sell; everyone else went to the sidelines.
Of course I have no idea what the June 2009 seller was really thinking, or what pressures (financial or otherwise) he may have been under then. But there’s a good chance that his real estate life wasn’t too bad, compared to many other early 2009 sellers. You won’t find it on StreetEasy, but our listing system shows when he bought loft #6A (because it was a Corcoran sale). The 2009-seller-at-$1.3mm bought the loft way back in 1990 for $551,511. So unless he over-leveraged this asset in between, he actually walked away from that June 2009 closing table with a pile of cash and a capital gains tax bill. (Because of our listings system’s rich history, this sort of detail is included on my Master List of Manhattan residential loft sales under $6mm.)
Buyers who went into contract when the recent #6A sellers did (mid-April 2009) were, indeed, ballsy. They didn’t know it, but what I came to call The Thaw was just beginning. (I didn’t know it either.) Hence, they just sold at $3.325mm the loft that they bought eight years earlier for $1.3mm. Sure, they did a lovely upgrade in between, spending more than a few bucks, but if any loft owners ‘earned’ a huge return, it is these June-2009-buyers-turned-May-2017-sellers.
I actually talked about these sellers as buyers, as an aside in a blog post about the next sale in the building, when loft #5A sold for $1.8mm nine months later. My April 9, 2010, closing at 40 West 15 St relieves ALL shareholders, is worth a read, if I do say so myself. If you lack the patience at the end of this long blog post, here’s the last sentence:
In a rational market, #5A and #6A would not trade 9 months apart with a half-million dollar gap.
Point being, there was no rational market in those days.
[…] To my mind, an asking price for a Manhattan loft is successful when it generates an offer from a qualified buyer that leads to a contract (more successful if it leads to multiple offers, but stick with basic success here, please). Another way to look at it is that owners of lofts that sell off an original asking price have done a better job of anticipating what buyers are willing to spend than owners who have to discount the ask to get a deal, and a much better job than owners who don’t succeed in attracting offers from qualified buyers. I believe that in periods of changing market conditions (especially, in markets in which buyers have relatively more leverage) it can be difficult for sellers to accurately predict where the buyer pool will bite. (Hence, my reference to sellers “chasing the market down” in 2009 in my June 16, Manhattan Loft Lab at 40 West 15 Street features building record, failed marketing, opposite styles,….) […]