it can be very rewarding to take apart a Manhattan loft
Numbers don’t lie: the “1,674 sq ft” Manhattan loft #301 at 874 Broadway (in the lovely MacIntyre Building) that was purchased in needs-a-renovation condition for $1.1mm in October 2009 (after a very long campaign) was just sold for $2.6mm. Pictures can mislead: if all you had to go by were the recent marketing photos, you’d think the loft was still in needs-a-renovation condition. How else to explain walls that look like this?
Or a tub resting on (what??) in a bathroom of cinderblock, like this?
(Photos from the Sothebys listing on StreetEasy, obviously.) But that look was not easily achieved or (most likely) inexpensive. The old listing photos (available here) are not large enough to permit a detailed comparison, but trust me (I saw it back in that day): the loft looked nothing like this. (That broker babble gave this hint to those in the know: “awaiting your unique creative touch“.) The Before and After floor plans give the best indication of how extensive the changes were, with the kitchen moved and a second (master) bath added.
Craftsfolk to do this kind of painstaking deconstruction can’t come cheap, so let’s ballpark at $400/ft. That’s still less than $700,000, which would bring the recent seller’s buy-and-take-apart investment to less than $1.8mm, and the gross gain to something north of $800,000, or about 45% (in very gross ballpark terms, of course). For comparison, the StreetEasy same-sale Manhattan Condo Index is up only 30% from October 2009 to June 2014, so it is very likely that the recent seller significantly out-performed The Market. (It all depends on how much she spent on the deconstruction, of course, but $400/ft seems quite do-able to me.)
Conventional Wisdom about highly idiosyncratic Manhattan loft renovations takes it on the chin
It is an article of faith among people who make their money advising sellers to tone down their palette and smooth the funky elements that Buyers Prefer Neutral. (Remember what happened to The Steampunk Loft? That Chelsea loft took 20 months, five prices, two firms, and one major neutering to find a contract.) But there’s nothing neutral about loft #301 in prime Flatiron; quite the contrary: it is aggressively distressed … er … “painstakingly deconstructed”.
And The Market loved it, taking 4 weeks to get into contract $105,000 over the asking price. (Obviously, at least two buyers shared the seller’s artistic vision.) I had buyers who were the first to see it in April. They were … overwhelmed. Not surprising, as even a Manhattan loft snob like me can see that there is a very very small slice of the Manhattan buyer pool that could live in space dressed like this. It’s anyone’s guess whether this Flatiron loft or that Steampunk loft in Chelsea was more idiosyncratic in decor, but The Market response could hardly have been more different: 4 weeks to contract instead of 20 months, above ask rather than 5 price drops, $1,553/ft rather than $848/ft.
Good comp data is often hard to come by in small loft buildings like 874 Broadway, yet here the last public sale strongly supports the view that #301 got a huge market premium because of its condition. Loft #501 has the identical footprint, but was in conventionally renovated condition when it sold for $1.5mm in August 2010. (That babble boasts of “custom solar shades [, …] Miele washer/dryer[, …] Gaggeneau cooktop, subzero fridge, limestone counters, poggenpohl 80’s cabinetry[, …] dornbracht fixtures in the bathroom with kohler soaking tup and sinks[,] Moroccan cement tile in the bathroom[,] custom zebra wood cabinets[,] Massive classical built-in bookcases[,] Refinished oak floors[, and]Central A/C unit“.) The StreetEasy Index implies that loft would be worth about $1.84mm as of June (up 22.5%), although the 2010 buyer valued it at only $1.75mm when she transferred it in a private (apparently inter-family) transaction five months ago.
That’s powerful stuff: a conventionally finished loft two flights up should have been worth about $1.84mm at the same time the extravagantly deconstructed loft #301 sold for $2.6mm.
Sometimes the Conventional Wisdom just doesn’t apply … but woe to the seller who gets caught up by miscalculating when it does apply. (Looking at you, Mr. Steampunk.)
we’ve been here before
The recent babble notes that loft #301 has a “published interior“, but doesn’t say where it was published. Maybe there’s no link, or the agent didn’t go the the effort to find one, or the place(s) it has been published are not as brag-worthy as Architectural Digest. I don’t have a link, either, but I know one place this loft, as deconstructed, was published. I hit it in my May 4, 2011,874 Broadway loft featured in DWR catalogue. (DWR = Design Within Reach, of course.) It was pretty memorable in its Before condition; it is even more so now.
I love it, though I can’t be sure I’d like to live in it. But there are at least three sets of people who could, one of whom put her money into it, with the other two willing to put a lot of money into it.