again running with the bulls at 48 Bond Street, up 18% over 2008 this time

the Berke premium grows
Of course we have been on Bond Street before, talking about how that small stretch of Noho has taken off after just two new residential loft uber-condo developments (starting with my November 1, 2007, re-setting values at 57 Bond / there goes the neighborhood, from way back in the day); and of course we were here just a week ago, marveling at a rather extreme gain from one of those 2008 new development sales (that’s my November 21, man takes small nip at big dog: 48 Bond Street loft resells 41% above 2008, of course). The recent sale of the “1,590 sq ft” Manhattan loft #3A at 48 Bond Street does not approach the 2008-to-now appreciation garnered by the loft with terrace from last week’s post, but at $1,726/ft it ain’t too shabby. Things (values) are looking up on Bond Street. Again.

The broker babble and pix reveal that loft #3A has the standard-but-ooh-la-la finishes installed by the developer, in this case with the floor to ceiling windows looking south across Bond Street. The floor plan is a straight 2-bedroom-2-bath array with that single exposure, a plan that could have been created with one of the cookie cutters used to “design” so many modern condos. Yes, it is a “functional and well laid floorplan”, but the space is redeemed by the high ceilings and large windows.

The sponsor thought this space was worth $2.275mm in 2007, and got the original buyer to pay full freight plus the New York City and State transfer taxes that buyers only pay when the sponsor has the leverage to insist. Total consideration paid by that original buyer was $2,316,518, on April 9, 2008, just as The Peak of the overall Manhattan residential real estate market was peaking. (With that contract having been signed by September 25, 2007, the anal among you would consider this a peak sale, with the closing artificially delayed until the Certificate of Occupancy had been issued, but let’s not quibble over such things today.)

That original buyer at $2,316,518 just sold at $2.745mm, a gain of 18%. The Berke bonus seems to be growing, as we will see after looking at the most recent details.

For a loft that sold at a premium to the ask, #3A took its time getting into contract:

June 1 new to market $2.67mm
July 23 contract  
Nov 7 sold $2.745mm

comps show Berke-mentum
That’s 8 weeks to get a contract at a 3% premium to ask, which sounds more like a non-trivial premium when expressed in dollars: $75,000. At the time that #3A was being actively marketed the prior sale in the building was the “1,551 sq ft” #4B on June 10, 2011 for (only) $2.195mm, or $1,415/ft. That loft has the same 2008 standard-but-ooh-la-la finishes as #3A and a very similar floor plan; the only differences are that #4B has a small balcony and its single exposure is north, to the rear of the buildings on Great Jones Street. Personally, I don’t see the view difference as worth anywhere near the difference in market value between #4B and #3A, so the fact that they sold 18 months apart is likely to be much more significant than the shorter distance from the windows of #4B to the back of Great Jones compared to a longer ‘view’ at handsome Bond Street facades from #3A.

But the scale of the difference is rather startling. The two units are functionally identical. with the slight exception being the small balcony in favor of #4B. Loft #3A is a little larger at “1,590 sq ft” of interior space, so the dollar per foot difference of $1,726/ft and $1,415/ft is not quite as large as the absolute dollar difference between $2.745mm and $2.195mm, but however measured the difference between these two sales is startling.

This gap is especially impressive in comparison to the last “A” line sale, #7A on February 23, 2011. Same finishes but better views than #3A, babbled as “sun drenched South facing … with clear views onto Nolita”, #7A was offered less than two years before #3A, asking $2.67mm. One six-figure drop preceded a December contract and the sale on February 23, 2011. With the height advantage but the disadvantage of closing 21 months before #3A, #7A cleared at $2.395mm. Those 21 months were enough to earn #3A a 15% premium over the same loft 4 floors higher.

That is evidence that The Market is warming to Ms. Berke’s work, and its prime Noho location.

© Sandy Mattingly 2012

Tagged with: , , , , , , , ,

Leave a Reply