the fact that I hate spiral stairs did not matter to Noho penthouse loft buyer at 10 Bleecker Street at $2.9mm

crown jewels of Manhattan lofts can be expensive

I admit it: one of the things I am most loft-snobby about is a spiral stair. To me, nothing else says cramped or cheap quite as well as a spiral stair. For a loft that just sold for $2.9mm (as the “1,200 sq ft” penthouse loft #7D at 10 Bleecker Street just did), the issue should not be cheap-as-in-can’t-afford-better, though this particular stairway does not impress; here, the issue must be that the owners did not want to dedicate more floor space to a larger stairway. Looking at the scale of the space, that is understandable, but no less unfortunate.

My qualms aside, The Market thought the place was a hit: to market at $2.995mm on July 25, in contract by October 18, sold on December 17 at $2.9mm. One look at the floor plan is all it takes to forget the “2,164 sq ft” quoted by StreetEasy; the interior of this penthouse loft #7D might be a little bigger than #6D, which was quoted as “1,100 sq ft” when it sold in April 2011 (our listing system has it at “1,200 sq ft”). Maybe StreetEasy free-lanced and added the outdoor space to an interior measurement (something I have never before observed), which would get to “2,164 sq ft”, more or less. (The lovely floor plan claims the private roof garden is “900 sq ft”; our listing system says “800 sq ft”.) We’ll get to the difficult comping analysis for this space below, but note that counting every outside foot as worth every inside foot, the adjusted per-foot value is $1,340/ft and any more reasonable outdoor valuation drives the adjusted price per foot much higher, while the highest price for a loft in the building (before this) was $1,300/ft for a much larger loft with much more enthusiastic babbling about the finishes.

Let’s look at what a trust just paid $2.9mm for.

a wonderful 1-bedroom but not a One Bed Wonder

Long-time readers of Manhattan Loft Guy know that my locution One Bed Wonder refers to loft spaces set up as 1-bedroom units that are unusually large for so few sleeping spaces. Penthouse loft #7D doesn’t qualify, although you could imagine squeezing a second bedroom into the footprint at the far wall, you’d likely ruin the space if you did. It works as a 1-bedroom much better than it works as a 2-bedroom. Indeed, it works wonderfully as a 1-bedroom in part because if you add a bedroom you are adding people (large or small) who will need additional storage space, and this loft is built out for people who do not need much storage space.

Look at the modest bedroom. Barely 144 sq ft, it has a single closet (the master bath has twice the closet space of the bedroom). There’s a tiny closet on entry, a reasonably sized coat closet before you get to the kitchen, the other half of the “custom built-in” wall that faces the living area, and a very narrow bit of storage in the living room that seems optimal for canvasses or easels or stretchers (see the main listing photo, but look closely because it is easy to miss). In other words, the space as built is optimized for however many people sleep in that one bedroom. And, if there are two of them, they shouldn’t have many clothes. Or stuff.

I suspect the broker babbling is too modest about the finishes, unless I am simply fooled by the bright shiny objects (and surfaces) evident in the listing photos of the kitchen, full bath, and powder room. The quality of material or finishes are hardly bragged about:

prewar corner loft, an exceptionally quiet home with oversized windows wrapping west and south, and two skylights, you will find a large, open plan kitchen with stainless cabinets and white corian countertops. Enjoy the graciously sized living room with a wood burning fireplace, high ceilings, hardwood floors , full second bath, and customized work/storage space. The serene bedroom features a generously sized en suite bath, and custom closets.

Contrast that restraint with the description of the crown jewel:

The crown jewel of this home is the gem of a private roof deck- meticulously landscaped, this private space has it all! Perfect for entertaining. thoughtfully designed- with custom furniture, lighting, hidden storage, fully automated watering system, and outdoor shower.

That enthusiasm extends to the photography, as there as many listing photos of the roof deck as there are of the interior, with several attempts at ‘art’ in those outside shots. (Listing pic #10 is one of the most unusual listing photos you will see; a very successful shot, to me.) With the inclusion of actual humans outdoors (something you almost never see in standard marketing, unless the subject of snark as Bad Listing Photos) the obvious emphasis on this loft is that roof, the “crown jewel” and “gem”. Here is enthusiasm about finishes: “thoughtfully designed- with custom furniture, lighting, hidden storage, fully automated watering system, and outdoor shower”.

I’ve said it before, so you know I will say it again: outdoor space is something that some people will “overpay” for.

busting the comps machine

The last time anyone bought an interior space in this coop about the size of the #7D interior was that #6D sale in April 2011. There was a palpable enthusiasm in that babbling, but my best guess (reading between liners of babble and photos) is that the #7D interior was probably nicer than that of #6D. But it had better be. Loft #6D sold for $1.325mm and a simple (crude) time-adjustment based on the StreetEasy Manhattan Condo Index suggests it would have been worth only about $1.5mm last month, when #7D sold. Bump that up a very generous $100,000 if you really prefer the #7D interior finishes to those of #6D, and you get an implied interior-only value for #7D of $1.6mm, or $1,333/ft.

Of course, if you do that, you are left with the roof deck being valued at … (wait for it) … $1.3mm, or $1,444/ft if it is really the “900 sq ft” that are claimed. You could live in the interior space even through a polar vortex; not having seen evidence of upstairs heating or enclosures, no one has likely been up there in the last few weeks, and the full value of the roof deck is available only 8 or so months a year. (So far.)

Anomalous as this result may be, I am inclined to credit it, even though it would make this loft+roof sale an extreme outlier if one is used to riffing with The Miller about the value of outdoor space.

Comping at #7D from another (hyper-local) direction, the last sale in the coop was a ground floor townhouse-like loft, with a lower level below grade. The “1,900 sq ft” loft #1C sold for $2.15mm on June 14. On the one hand, you’d adjust the nominal $1,131/ft as a comp for the #7D interior as nearly half of #1C is below grade; on the other hand, the finishes there were very enthusiastically babbled, so are very likely to be of higher quality than on the 7th floor. Net-net, adjust the comp-size of #1C to “1,600 sq ft” (valuing the lower level at about two-thirds of the upper level) and you’re at $1,343/ft, rather remarkably (coincidentally?) close to the $1,333/ft I got above with the time-adjustment and condition adjustment based on the #6D sale in 2010.

Or come at this from another direction, still without leaving the building.  The “2,500 sq ft” loft #3B (aka “3F”) was in better condition than #7D when it sold 2 years ago at $3.25mm (“gut renovated past perfection”, to quote the impossible babble), or $1,300/ft. If you adjust only for time, that would imply a value of about $3.75mm ($1,500/ft) for #3B last month based on the StreetEasy Index, not so far above the other comp analyses for the #7D interior given the “past perfection” condition of #3B. (Sharp-eyed readers will remember my post about that sale, the celebrity buyers, and the fascinating back story to the loft renovation, my February 7, 2012, back story on celebrity Noho loft purchase at 10 Bleecker Street is about the sellers.)

You can’t persuade me that the interior space of loft #7D was worth much more than these same-building comps imply … something under $1,400/ft. If you are as persuadable as I am, then you will agree that we are probably looking at the most anomalous of penthouse lofts: one in which the “900 sq ft” roof deck was worth more than the “1,200 sq ft” interior, on a dollar-per-foot basis.

Weird, but (apparently) true. That’s my story, and I am sticking with it.