our long national nightmare is over, as 57 Bond Street loft sells with strangest history you will see today

every party needs a pooper
This post may only be for the fanatic spectators of the Manhattan residential real estate game who collect odd price histories. I am going to ruin the suspense by telling you that the “2,110 sq ft” Manhattan loft (with “1,045 sq ft” private terrace) #2W at 57 Bond Street sold (finally!) on December 28 at $3,910,170. It just wouldn’t feel right to make you wait until the bottom of this 26-month listing history to get to the surprise ending (omitting brief periods of hiatus):

If I had not already given you the clearing price, you’d be shocked by the 9th line of the history, wouldn’t you? As it is, you are just perplexed. As am I … wondering why a loft that found a buyer in November 2012 above $3.9mm could not have done that for the 18 months beginning January 2011 when it was offered at no more than $3.995mm, or especially during the subset of 15 of those months in which it was offered no higher than $3.75mm.

How about this bit of head scratching: after being publicly ignored for those 15 months at $3.75mm and $3.65mm, the sellers were able to hold stubbornly enough to a new (and improved!) price for the 9 weeks it took to get a contract signed at a nominal (if hard fought) discount, $260,170 above the price that the public knew had been unsuccessful for most of 2012.

I will speculate about how this may have played out, but not until considering the charms of the loft.

inside and out on the ‘It’ Block
I walked by this building with a buyer client a few weekends ago, talking about how this block had become the hottest block in Manhattan. (Meaning, not merely that it was popular, but that there were huge increases in values up and down the block.) This newly built 10-unit “boutique” condominium did not so much provoke the hotness as anticipate it when it was finished in 2004. It was well positioned to take advantage of the momentum pushed by ooh-la-la neighbors.

Here is what i said in my November 28, 2012, again running with the bulls at 48 Bond Street, up 18% over 2008 this time, about this block and its big dogs at #40 and #48:

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.

And in that November 1, 2007 post (re-setting values at 57 Bond / there goes the neighborhood) I was obviously talking about those big dogs driving up values at 57 Bond Street:

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.

meanwhile, back in the loft …
Start with #2W’s bones: 12 foot ceilings and 8 foot windows, a floor plan that wraps around the huge terrace such that the main living space has 2 exposures to the terrace, with the bedrooms also facing the terrace. The finishes sound like what was built in 2004, and appear to have held up well, both in condition and in competition:

the open Chef’s Kitchen features Poggenpohl cabinetry, granite countertops, a Sub-zero 36" refrigerator, a Viking gas range and oven, a Bosch dishwasher and a Sub-zero wine cooler…  maple floors …. Master Bedroom Suite offers abundant closet space with a large walk-in and a five-fixture marble and granite Master Bath complete with a Zuma 6’ deep soaking tub and separate steam shower. The second and possible third bedrooms share a well-appointed marble and granite bathroom with a separate shower and deep soaking tub

No kidding around, the layout maximizes the utility and charm of that huge terrace, perhaps justifying this flowery bit of broker babble: “the developers were careful to integrate this desirable external environment into the allure and ambiance of this superb home”.

Especially given the size of the (uncredited) planters built along the outer terrace edges (added during the long marketing campaign, as the early listings show a more spare, unplanted terrace), you’d never know that you were just one flight above, and overlooking, Bond Street. The planting provides great separation from the building edge, while not limiting in any way views of the truly magnificent loft neighbors across and down the block.

This terrace is, no kidding, drool-worthy. And rare. (Other units in the building have small balconies [as pictured from the #2W terrace] or small terraces [like #2E].) That feature makes it hard to comp and (in The Babble Handbook) “unique”. The sellers obviously maintained that the terrace was worth a lot; The Market took a while to agree.

comping is _____
When loft #2W was first offered for sale in late 2010, none of the 10 residential units in the building had re-sold. For a 2004 new development, it had taken the sponsor quite a long time to sell out, with the last sponsor unit not selling until the “2,125 sq ft” #4E sold in April 2008 at $2.918mm. Then the original buyers buckled down to enjoy the lofts, and the block.

While the #2W owners were trying to become the first resellers (but were beating their heads against The Market), the “2,125 sq ft” #3E came to market and got snapped up (12 days to contract) at the ask of $3.2mm on July 28, 2011. Still, the #2W owners held on. Of course they proved to be right, though it took another 16 months for us (and them) to discover that.

The #3E balcony is small enough that I am going to ignore it to run a ballpark comp analysis for the interior space of #2W as of the July 2011 sale of #3E at $1,506/ft. That sale would value the #2W interior at $3,177,412, meaning that the sellers were asking $572,588 for the terrace, or $548/ft, or only 36% of the value of the interior space. (For more on riffing with The Miller to value outdoor space, see my May 6, 2010 post.)

Here’s the funny thing: based on the #3E sale in July 2011, the #2W sellers were right but The Market was wrong. I would have argued at that time that (assuming a rational market, of course) the #3E sale implied that loft buyers who appreciated the building and who wanted vast outdoor space should pay at least what they were asking after July 2011. The continued rejection of the $3.75mm asking price aside (as if!), there was a very rational argument to be made that the terrace was actually worth more than 36% of the interior space on a $/ft basis, so the true implied value of #2W based on #3E at $1,506/ft was probably worth … (wait for it) … $3,963,792.

I had not known when I started this post that the path of deconstructing this listing history would involve riffing with The Miller, as I did not realize until digging that this terrace is unique in the building (actually unique, not just babbling unique). Nor did I realize how applying a July 2011 neighbor’s sale would impact the analysis.

The Market was wrong until it was right
I am very comfortable with that implied value of $3,963,792 for #2W as of July 2011 based on the #3E sale because I am very comfortable with valuing the terrace at 50% of the value of the interior. The terrace scores high on utility, being directly outside all the rooms and accessible directly from the living room; the terrace is just under the proportion of the interior that The Miller would wonder about discounting it as ‘too large’; the shape of the terrace is extremely functional; and it provides separation of the living space from the street. That’s an easy 50%; if pushed, I could make an argument for higher.

Having seen this rough math ($3,963,792 looks like a precise number but it is the product of rough math), now I would really like to know what the agent-seller conversation were like. This is getting more weird, as I just noticed that when the sellers changed firms the week before #3E closed, they listed with the agent team that had just sold #3E.

As we know, in six months that team was not able to sell #2W while asking $3.75mm, arguably a lower value than they had gotten for #3E. It wasn’t for a year after #3E sold (and yet another change in listing firms) that the sellers found the agent team that would sell their lovely loft with magnificent terrace, and they did it by raising the price to $3,925,000 in July 2012, (coincidentally???) right in the ballpark implied by the #3E sale in July 2011.

This is beginning to feel like Rod Serling territory for me, as The Market did in November 2012 what it should have done long before: value #2W like #3E, with an appropriate adjustment for the huge terrace.

Just to take a cold shower for a minute … ‘reasoning’ backwards from market facts that cannot be rationally explained is a fool’s errand. The fact that #2W sold above $3.9mm in December 2012 means it should have sold above the asking prices from at least May 2011 into July 2012. But it didn’t sell then. The fact that #3E sold in July 2011 at $1,506/ft means #2W should have sold at a similar adjusted value, then and afterwards, but it didn’t (for another year).

I’ve enjoyed peeling the onion on this price history far more than I originally intended even when I wrote the headline as it appears up top. But I can’t explain why The Market forced #2W down this long, tortured path. As a connoisseur of Manhattan loft market oddities, I love that #2W came out in the ballpark that #3E implied in July 2011. I will never walk down Bond Street again without looking up at this terrace and smiling.

(Countdown … 10 … 9 … 8 … 7 … 6 … 5 … 4 … 3 … 2 … )

© Sandy Mattingly 2013