man takes small nip at big dog: 48 Bond Street loft resells 41% above 2008

not so unusual, except for scale
The last few resales at the Deborah Berke designed oh-so-successful 2008 new development 48 Bond Street have been above their 2008 prices, so it is not is so unusual that the “1,551 sq ft” Manhattan loft #2B (with “1,000 sq ft” terrace!) resold above the 2008 purchase price, but reselling at 41% above is rather unusual. Looks as though the sponsor left some money on the table back in the day, probably due to having undervalued that terrace. Let’s check the data before probing for explanations….

Loft #7A is an outlier in this sequence, and not in a good way:

• Feb 23, 2011 $2.395mm
• April 4, 2008* $2,545,625

Ranked in order of change since the sponsor sale:

1. #2B 41%
2. #3A 18%
3. #4B 10%
4. #7A (6%)

(*Of course, the 2008 recorded sale prices are not the revenue received by the sponsor, but the total expense [price plus New York city and state transfer fees that would otherwise have been paid by the seller; that total is what the buyer was willing to pay.)

lovely lofts on remade block
In my April 27, 2010, 48 Bond Street closes up 400% since 2008, but …, I talked about how this new development may have been the single most fortunate in terms of timing, and about how this one and 40 Bond Street remade this formerly sleepy Noho block. First this:

If there is another new development in Manhattan (lofts or otherwise) that timed The Market more perfectly than 48 Bond Street, I can’t think of it. The two key calendar points for The Market were The Peak (roughly, deals closing in the first quarter of 2008) and The Freeze (the nuclear winter that followed the Fall of the House of Lehman, September 2008).

There were 11 sales in this new development in March and April 2008; two were in July 2008; one was in October 2008 (on a pre-Lehman contract, no doubt). (The building was built as a 17-unit condop, but the two 6th floor units were sold combined in April 2008, the 9th floor sold as a unit in October 2008, and I don’t see any record of a 10th floor unit changing hands.)

Then this:

Way back in November 2007 I observed that this project and another just down the street changed the values in the neighborhood. From that post of November 1, 2007, re-setting values at 57 Bond / there goes the neighborhood:

the new kids on the block that have driven prices very far very fast are 40 Bond and 48 Bond. 40 Bond is the 31-unit Ian Schrager project with "five star hotel services and amenities", in which original units can still be had for as little as $3.5mm for "1,269 sq ft" (#6D) or as much as $9.95mm for "3,288 sq ft’ (#9A). 48 Bond is the smaller (17 unit) Deborah Berke designed project that has a "3,141 sq ft" full floor unit left, asking $5.15mm.

For all that appears in the broker babble of the 2011-12 resales at 48 Bond Street, these lofts were all in original condition when resold. Thus, the only difference between #4B at $2.195mm in June 2011 and #2B in October 2012 was (a) (slightly) different market conditions, but more so (b) that “1,000 sq ft” terrace.

playing with numbers is fun, but … informative??
If you assume that market conditions were flat (to make the math really easy), the terrace was not quite a seven figure amenity, at $955,000. If you assume that there were differences in market conditions, so prefer to comp with a more rigorous definition of “recent”, you can use the #3A sale this month as the base line for interior values, then riff with The Miller to value the #2B terrace.

At “1,590 sq ft”, #3A is a little larger than #2B (and #4B) at “1,551 sq ft”, but the #3A floor plan has only 2 bedrooms and one exposure, while the #2B floor plan has 3 bedrooms and two exposures. Arguably, therefore, the #2B interior should be more valuable on a dollar per foot basis, but let’s ignore that complexity for riffing purposes. Simplified, the #3A sale on November 7 sets a value of $1,726/ft for late-2012 interior space at 48 Bond Street. That implies that the #2B interior was worth $2.678mm, leaving the terrace at (only) $472,000, or half the value using the #2B v. #4B (2011) comp. At the thankfully round “1,000 sq ft”, that comes to $472/ft (d’oh!), or 27% of the value of the interior.

That 27% strikes me as rather low, given the high utility of a terrace accessed directly from the public space and from the master suite, but perhaps that is appropriate given that it is the second floor, mid block (no view, and a bit of a canyon), and is a little too big in relation to the “1,551 sq ft” interior for prime valuation. Net-net, I can live with that, especially as the November 7 #3A sale is a very persuasive comp for interior values n this building.

With that, I will quit for the holiday. Don’t know if I will take a family break to post between meals on Thanksgiving, or on catatonic Friday, or on traveling Saturday. See you sooner, or later.

© Sandy Mattingly 2012