170 Mercer Street loft sells after 15 months, 15% off neighbor in 2005

starting from the same place, going in different directions
The last two residential lofts to sell at 170 Mercer Street in the Manhattan Loft Guy range of $500,000 to $5,000,000 (see the Master List of Manhattan Lofts Sold Since November 2008) started at $1.995mm, yet sold nearly 6 years and 15% apart. The awkward factoids associated with this pair is that it is the Manhattan loft #3E at 170 Mercer Street that just sold on November 1 at $1.8mm, 14.6% below the clearing price of #6M on December 23, 2005, and that it is % larger than #6M (“1,633 sq ft” vs. “1,250 sq ft”). O. U. C. H. and double O.U.C.H.

Actually, only the last phase of the (eventually) successful #3E marketing campaign started at $1.995mm, when the seller changed firms (and prices). The full campaign took almost 16 months and a 25% discount to get done:

Do these numbers add up? “1,834 sq ft” in a condominium in prime Soho (“directly across the street from the Mercer Hotel & Kitchen on one of the best blocks in SoHo”) with windows 10 feet high and a “recently renovated open kitchen [with] the latest stainless steel appliances, granite counters and cabinetry […. and] ensuite [master] marble bath with his & her vanities”. Selling for less than $1,000/ft??

There’s got to be a catch….

One catch is that the StreetEasy deed record has #3E at “1,633 sq ft”, not “1,824 sq ft”. The good news, therefore, is that #3E did clear above $1,000/ft, at $1,102/ft. The bad news includes that the In Real Life dollar-per-foot price is probably much higher than $1,102/ft because those IRL feet are hard to find.

the floor plan has some catches
Loft #3E is yet another challenging Manhattan loft layout, with numbers that do not easily add up, to boot. This has to be the smallest 1,600+ sq ft in captivity, with an open mezzanine “bedroom” and a really really really (to go all Giuliani on ya) long entrance gallery. The floor plan has those 10 foot high windows on one wall (yay!) but no other windows (uh-oh) and a “master suite” is both open to the “ballroom-sized living room” and along way from those windows. (Are those elementary school type accordion doors to close off the master suite mezzanine, from light only??)

Loft #3E is not a loft that plays small (like in my November 21, cop loft sells at 240 Centre Street with challenging layout, off 46% from very first ask, where I first borrowed that phrase that describes some basketball players); #3E is a loft that is small. Yes, allocating square feet in a loft is an art, even in a condo. But check out the math derived from the floor plan measurements (which are, of course, approximate and not to be relied upon, and to be verified by your architect or engineer, etc, etc, etc):

how do those numbers add up?
620 + 169 + 268 + misc = “1,633 sq ft” in what world?

Where “620” is the living room at 22’4” x 27’9”, “169” is the kitchen at 12’6” x 13’6”, “268” is the master suite at 15’4” x 17’6” and “misc” is the master bath and washer-dryer space plus the downstairs bath plus that endless gallery. Without the “misc” the numbers total 1,057 sq ft. There is a lot of “misc” between 1,057 and 1,633 sq ft.

More critically, the point of this arithmetic exercise is that the truly comparable lofts to #3E are not going to be lofts around 1,600 sq ft, nearly all of which can naturally fir two bedrooms. Loft #3E only has one bedroom because it is stacked above the kitchen under high ceilings; a second bedroom is out of the question.

If #3E is really more like a “1,300 sq ft” loft than a “1,600 sq ft” loft, the clearing price of $1.8mm starts to look a lot better … a lot more like a prime Soho loft (“directly across the street from the Mercer Hotel & Kitchen on one of the best blocks in SoHo”) with windows 10 feet high and a “recently renovated open kitchen [with] the latest stainless steel appliances, granite counters and cabinetry […. and] ensuite [master] marble bath with his & her vanities”. In Real Life, this is more like a nearly $1,400/ft sale.

what went down in 2005?
StreetEasy has only very spare information about that #6M sale above ask at $2,062,500 on December 23, 2005. The listing claims “1,834 sq ft” but the deed record claims only “1,260 sq ft”; the listing has no floor plan but sounds like the layout sounds like #3E: “one bedroom duplex on the best Soho block! 16’ high ceilings, 10’ windows, hardwood floors, wood-burning fireplace, two full bathrooms, top of the line appliances”.

What’s really weird is that StreetEasy has #6M as a Corcoran listing in 2005, but we have no such listing in our data-base. An ancient listing in our data-base also has that interior space as “1,260 sq ft” but notes that #6M is a penthouse with two terraces of “565 sq ft” and “207 sq ft”. These numbers start to make more sense of the 2005 vs. 2011 comparison between #6M and #3E.

There is still not enough hard data to do a principled comparative analysis, but it begins to make more sense that #6M sold in 2005 above #3E in 2011 if #6M is not a great deal smaller than #3E on the interior and has those two terraces.

I feel batter now….

running the rent v. buy numbers, again
Loft #3E was just bought at $1.8mm; it is now available for rent at $7,200/mo, after a renovation. Interesting stuff. (It is not obvious that this is #3E fmor from the StreetEasy listing, but go to the PruDE website for confirmation.)

These rent v. buy numbers are beginning to fascinate me, though I rarely look at the rental market. The last time I did this in detail was also a $7,200/mo rental of a loft that had recently sold. See my October 13, rent v. buy, or buy then rent in the loft laboratory of 448 Greenwich Street. But that loft was purchased for ‘only’ $1.46mm before being rented at $7,200/mo. (I was going to say, “but that loft was much smaller …” as it is either “1,148 sq ft” or “1,300 sq ft”, but it is a true 2-bedroom [with a very small second bedroom], but it may play bigger than #3E.)

These rental numbers are more forbidding at #3E than for that Tribeca loft, given the difference in purchase price, especially as those edge-of-Tribeca monthlies are much lower than at this prime Soho loft ($1,223/mo vs. $1,806/mo). In the case of 448 Greenwich Street, the numbers I ran showed a cash deficit of $1,856/mo, assuming 20% down on that $1.46mm purchase, or less than a 5% return if that buyer paid cash.

How does the #3E buyer-turned-landlord cover his nut?

More math that I don’t get. (Sigh.)

© Sandy Mattingly 2011