The Manhattan loft #10D at 718 Broadway sold for $1.06mm on July 20, "1,180 sq ft" of "true chic", this "completely renovated" loft is the "ultimate in sophistication". At a single bedroom and single bath with windows only on one side, it is not the ultimate in flexibility, but the concrete kitchen countertops and bathroom add to the ‘drama’. But I am intrigued by the price history, as it last sold on September 20, 2006 at $1.21mm. (That is a "no listing associated with this closing" on Streeteasy, but the inter-firm data-base shows this was sold as a "stunning designer renovation with meticulous attention to detail".)
late night television alert
That 12% slippage in market value in four years from $1,025/ft to $898/ft is interesting enough for Manhattan Loft Guy, as the 2006 sale was about two years pre-Peak. But wait … there’s more!
That July 20 closing at $898/ft for a stunning renovation loft on a high floor compares rather unfavorably to another loft that closed in the building that day: loft #4C is said to be "1,310 sq ft" and was marketed very explicitly: "OPEN blank canvas for the new owner to design a spectacular Loft residence". But that one cleared for $975k, or $744/ft. Not a lot of spread there ($154/ft) between #10D and #4C for a renovation of #4C comparable to #10D, I would think.
If anything, I would expect that the discount for buying a gut-and-build loft would be greater than the likely cost of renovation, for several factors: the purchase requires significantly more cash (you should not expect to finance any of the renovation cost); fewer people seem willing to buy a gut-and-build loft in this market (one reason the market is more thin for a gut-and-build loft); and the time lag between closing and move-in date requires either temporary quarters (for a buyer who must sell another space first) or carrying two residences (for the buyer who has been renting, or the buyer flush enough to afford it).
So this pair of same-building, same-day sales is an intriguing suggestion that The Market Is Not Efficient. But long-time Manhattan Loft Guy readers have heard that before. Really long-time Manhattan Loft Guy readers might remember that point as having been made about this very building way back on November 9, 2006 in more rich data and ‘comps’ / 718 Broadway sales history. In that post I looked at 4 then-recent sales at 718 Broadway. For present purposes, here is the money quote:
In that post, I also cited
my then-recent comparing lofts and lofts ain’t so easy
post (of November 6, 2006) in which I discussed three lofts that were then for sale at 718 Broadway (back when I did such things), with this
future post material
The sale of #4C in pretty primitive condition reminds me of a theme I need to return to one day in a post: what can happen in a small building (this one is not so small, at 40 units, but still …) when there is a generational shift. It is pretty likely that the #4C seller was an original shareholder (circa 1980, when the building was converted to a coop), and I wonder how many ‘pioneers’ are still left in the building.
The grist for a future post is the dynamic between newer shareholders who ‘paid a fortune’ for their lofts and long-time shareholders who (a) did not pay a fortune (by current standards, at least) and (b) might prefer more amenities and nicer common spaces. If the pioneers prefer (a) not to pay for upgrades and/or (b) actually prefer a more gritty sense of public space, conflict can ensue. But continuiing or extending upon that thought will have to await another day.
past post material
This building is now officially a MLG fave, with the history of 2006 posts cited above providing fodder for today’s post. But The Google reminds me that I have also hit this building in a post about an "interesting" marketing campaign by a creative For Sale By Owner of unit #6B last year. (February 12, 2009, 99 cent pricing on eBay leads to $400/ft under-pricing by FSBO loft seller in Noho.) In the teeth of the Manhattan real estate nuclear winter, that owner tried to mimic an eBay bidding experience for his loft by starting at (what looked like) a dramatically under-market price. Curbed had a bit more of the back story, when linking to my post.
As I recall from email correspondence with this guy later that Spring, (a) the campaign did not work and (b) he took it off the market because whatever life change that had been in the offing to take them out of Manhattan had turned out not to happen, either. So they ended up staying.
Based on the July 20 sales of #10D and #4C, one could argue that the very local market for 718 Broadway lofts has not improved since 2006. On the other hand, one can argue from the zig–zag of sales here, that this building is a Bermuda triangle for efficient market theorists.
I am going to stop now, for fear of launching another digression if I stay at the keyboard.
© Sandy Mattingly 2010