classic loft project at 644 Broadway sells above ask after difficult price discovery

the story is longer than it looks from a quick look

Maybe there’s a trend being born here, about downtown Manhattan lofts that have more trouble than typical buy-it-or-it’s-gone loft (or, a trend dying with this post). Today’s loft, submitted for your consideration, is the “2,800 sq ft” Manhattan loft #2W at 644 Broadway, which recently sold after having some trouble finding the right price. Only a little trouble this year, which was solved by dropping too much (as we’ll see), but there’s a longer story to be told (as we’ll also see). Skipping to the end of the story, the loft went to contract above the ask in about 8 weeks as this summer began but it took a price drop for that to happen. In the beginning of the story, the loft did not sell over 4 months at the end of 2011. In the middle of the story, the loft did not sell over 6 months in 2012, with some signs that the sellers had gotten (here’s a harsh word) stubborn. In the end, that feeling abated, indicated by the last two asking prices in this extended history:

You see what happened there? The loft was well over-priced in 2011-12, and the sellers hit their bottom price after 7 weeks on the market and held there for 7 months even over a change in firms. (Of course, 2012 was a busy market … for other sellers.) Then, they either got much more realistic, or the new agents had them agree to start at all those 9s but lock in a price drop if they didn’t get a quick deal (just) under $3mm. It’s been a while since I’ve had to say this, but The Market will correct a too-deep price cut, if it is a deep enough market. Spring 2013 was a deep enough market, of course, so the loft went onto the Master List of Downtown Loft Sales with a green sales price, indicating that ti went over (the last) ask.

Whew! Sellers got what they wanted (out!) at what sure looks like the best price available in the market, though it took them 11 months of marketing, awkwardly spread over 3 years, and 3 firms.

“exceptional opportunity to create the home of your dreams”, but, oh the windows

The sub-head quote is from the latest bit of broker babbling, but the loft has always been marketed as a project. From the August 2011 listing: “Currently configured with a bedroom loft area, the space is flexible and can be reconfigured to suit your needs”. Nothing quite says “project” like a “2,800 sq ft” loft with a single “bedroom loft area” behind the kitchen and, obviously, with no windows (watch your head up there; see listing pic #6). Unless that is a wood-burning stove, that is.

For fans of real estate agents (don’t be shy, raise your hands [no one will see you]), it is interesting in an inside baseball kind of way to see how the same challenging space was marketed by 3 different agents from 3 different firms. For my money, the middle team babbled it best:

As it currently stands, the unit is configured with an elevated loft-bedroom, 2 full baths, an enormous combined living/dining room, a windowed den, a kitchen with commercial-grade appliances, a separate laundry room and tons of storage. Much of the original architectural details are intact including the dramatic wooden window casings, decorative iron radiators, wood floors, wood-burning stove and exposed structural columns.

Aside from the commercial-grade appliances (is that a salamander in listing pic #5??), the whole thing is the bones (er … “architectural details”): windows, floors, columns, even radiators. In other words, a project. One that The Market (eventually) determined was worth just a smidge over $1,000/ft in 2013 and not anywhere near $1,200/ft in 2010.

how hard was that conversation?

I had a hard time at first in figuring out which way the unit faced, starting from the first two marketing efforts. You see that arched window on the left in the main listing photo in each of the first two listings? It doesn’t get very large in even the large formats, but my guess is that it shows paint on the glass. Paint that the owners were very (inordinately) proud of. At first I assumed that this painted-window meant that exposure had been blocked by a building that was newer than this building, but the map confirms that this unit at the west side of the building is on the northeast corner of Bleecker and Broadway, so that painted window sits above Bleecker Street. For whatever reason, these sellers at some point got tired of looking at Two Boots pizza, so covered the view with paint.

I hope it is not a Photoshop trick, but the third (and successful!) marketing effort shows that window over Bleecker Street to be clear, not painted. I have to wonder if that was a significant benefit in marketing, eliminating the possibility that some buyers self-selected out of the Interested Buyer Pool for this loft because they thought (mistakenly) that no light came from this long wall of windows. My guess is that the sellers were inordinately proud of that artwork, and resisted removing it as much as they resisted starting the price with a “2”.

Fans of an Efficient Market would not have been surprised by marketing this loft with a “2”. Back in the day, when the loft came out at $1,232/ft as a project, the last sale in the building was the loft immediately behind this one. the “3,400 sq ft” loft #2E cleared the market at $3.75mm ($1,103/ft) in July 2010. That loft posed a comping challenge for the #2W sellers to adjust (a bit) for change in market conditions (2010 to 2011), for having the (dark) east rather than the (open) west exposure along with the south exposure (a bit of an adjustment), and for condition (a big adjustment, as #2E was done to the 9s, if not the 11s:

a residence that will set new standards in design, security and comfort. This chic and sexy 3400 +/- sq ft home is done to exacting standards. … Striking wood-framed wall of arched windows … American walnut floors appear throughout. The library features custom leather floors and built-in bookcases. .. kitchen is fit for top chefs. .. master bedroom features custom dressing area and a must-see master bath. .. numerous state-of-the-art touches and an additional half bath to make this truly a first-class home. The loft features south/east exposures, central AC, custom sound and lighting.

In short, there is no comparison between the condition and finishes of these two lofts. To use the StreetEasy Condo Index to get “a feel” for changes in the overall Manhattan residential market from August 2010 (when #2# sold) and July 2011 (when #2W came out), we see feel that The Market was flat from August 2010 (Index = 1,910) to July 2011 (Index = 1,920). Yet the #2W sellers asked the market to pay 12% more ($1,232/ft) for ‘a project’ in July 2011 than #2E had sold for in ‘setting new standards’ condition 11 months earlier ($1,102/ft). Oops.

You know how that turned out.

When finally done, the #2W project cleared at $1,018/ft, or $85/ft (0.08%) lower than the beauty next door 3 years earlier. To riff with the StreetEasy Condo Index … assume that it’s a $300/ft renovation to take #2W from primitive to setting-new-standards; #2W at $1,018/ft + $300/ft in August 2013 compares to #2E at $1,103/ft in July 2010 would be an adjusted gain of  19% … (waiting) … (the envelope, please) … The Index was 1,910; now it’s 2,170, a gain of 13.6%. That gives us the ‘feel’ that even at $2.85mm, #2W out-performed The Market if you could take it from primitive to ‘truly first class’ for $300/ft.

It took a while, sure, but these sellers just earned themselves the (coveted?) Manhattan Loft Guy nicely played, folks; nicely played.