return of the gut renovation buyer / 222 Park Avenue South edition

was she ever away?
I wonder if the run of recent Manhattan loft sales that I have noticed of lofts in need of a complete build-out is an actual sign of Something Happening In The Market, or if it just random noise that I happen to notice. I don’t think this is going to make it more of a mental note (to continue to watch for), as opposed to one of those Note To Self ideas that I seem to rarely even get back to, because I can’t think of a way to systematically look for this very narrow niche of an already small part of the overall Manhattan residential real estate market. Sigh.

But here’s what’s interesting to me (today): the Manhattan loft at #10C at 222 Park Avenue South sold on January 14 after needing only 24 days to find a contract, and it sold in a condition that (at least in former market conditions) made it tough to sell.

This loft was explicitly marketed as needing a re-do, though the babble never used the gut word:

Ready for renovation, this loft gives you the perfect opportunity for customization to suit your needs.

one reason for scarcity
It has long been my impression that there have been fewer buyers interested in (or qualified to buy) gut-job lofts since credit tightened in 2008. The reason being that it had gotten much harder to finance a renovation project and a mortgage up front, so the liquidity required to put 20% down and pay cash for a $250/ft build-out and have a big enough pot of liquid wealth left over to impress a coop board in tough times became a bigger obstacle in a market that already had some good-sized (other) obstacles.

Yet this loft came out on September 22 at $1.295mm and found a contract by October 16. So that is at least one (quick to act) build-out buyer. But wait … there’s more! There must have been at least two such buyers, as the price got bid up to $1.35mm.

sound familiar to you? (it would be if you read Manhattan Loft Guy more closely)
This sequence and result remind me of the gut-job bidding war that I I hit on January 26, gut job loft at 395 Broadway provokes war, gets $1,000/ft (which I also mentioned yesterday in hitting a loft 10 floors below), where there were at least two (quick to act) build-out buyers bidding up that one.

Remember that I wondered at the start whether I am merely noticing something that has been going on (unobserved) for a while? My antennae were really up at the end of January! The day before that 395 Broadway post I hit (January 25) 303 Mercer Street loft with nothing but potential sells for $640/ft and teh day after (January 27) I hit white box loft sells for $847/ft at 251 West 19 Street, Manhattan Loft Guy is surprised (granted, the build-out market might be different for a white box than for a gut-and-build, but not very, IMO).

One of the 3 same-building lofts that I hit in my  February 8, is loft market at 722 Broadway irrational?  3 very different prices can be explained was an ‘estate condition’ sale (which sold 21% lower than a dressed-up neighbor) but that sale was in September — not as recent as these others. And then there’s the loft that sold in September after having been gutted by a fire, which I hit in my October 26, what is your loft worth after a major FIRE? 12 East 12 Street loft goes for more than you’d think, in a post that found it weird that this loft sold in a burnt-out condition off just 15% from where it had sold at The Peak, and that was explicitly marketed to cash-buyers only.

So, today’s post makes 5 in 4 weeks, 6 in 4 months. I will add one more, further back, just to establish that this is not merely a recent fixation of mine: in my July 30 divorce + dollars / 111 Hudson Street loft sale is painful on several levels, I hit a loft that occupies the unusual space between a white box and a gut job. That full floor loft had been 3 separate units, demolished and begun to be rebuilt (studs, BX cable, capped plumbing) in a project ended when a marriage did.

a fool’s bet
I bet that I would find very, very few similar purchases in the thin (credit poor) market of 2009. But if you want to win that bet, you have to do the work to prove it. Don’t try, except for fun, as my standard betting limit is 25 cents.

© Sandy Mattingly 2011