before ($1.55mm) + after ($2.935mm) gut renovation of Soho penthouse loft at 8 Greene Street

to create an authentic classic from a near-wreck is not cheap, but it can be profitable

Let’s say the interior of the recently sold (at $2.935mm) just-barely-Soho loft on the 6th floor at 8 Greene Street really is “1,700 sq ft”, which means the private roof terrace is about 1,200 sq ft. Since we know that the recent seller paid $1.55mm to buy it in “create your own space” condition (with roof rights) in March 2011, and we know that the overall Manhattan residential real estate sales market is up about 28% since then (the irritatingly not truly updated StreetEasy Manhattan Condo Index tells us that), we desperately want to know the renovation budget. Without actual facts, we will have to play Guess The Budget in order to assess whether the recent seller created more value than he paid to build out the space and the roof. I’ll go first, but let’s scale the pre-renovation value through a simple time adjustment to get a sense of the baseline for measuring (guessing) ‘value’ created, as recognized by The Market.

The StreetEasy Condo Index implies that the loft would have been worth about $2mm now, had it not been improved in the interval. Let’s play in round numbers and say that the renovation (build-out) added about 7-figures in value. It seems highly likely that this is another one of those loft renovations that created more market value than was spent on the renovation budget ($350/ft for a nice renovation = [only] about $600,000, add another 6-figures for the [roughly] 1,200 sq ft roof and there is still a healthy margin of added value; you’d have to assume about $450/ft for the interior work and more than $150,000 for the roof before you get close to the break even point).

Nicely played, sir; nicely played.

broker babble doesn’t sound all that enthusiastic

Based on this detail from the listing description, this was probably not a no-expense-spared renovation, just a nice (er … “authentic”) renovation (I will omit, as usual, babbling such as the kitchen being “fully equipped”, as if that were a selling point):

kitchen boasts first-in-class appliances from Miele and Liebherr and fixtures by Hansgrohe. Lacquered wood cabinetry with natural wood shelving …. dining area’s vintage theater lighting ….

The bathroom offers the epitome of elegance and relaxation. A deep oval tub, Dornbracht fixtures and a stunning crystal chandelier…. Custom-built pull-out medicine cabinets are an example of the thorough attention to detail in this apartment. …

… stunning 150-year-old yellow pine floors [and] vintage 500-pound fire hall door suspended in the ceiling’s beams. Modern improvements in the plumbing, electricity, as well as the addition of central A/C, a fully installed Insteon smart home system and surround sound with Bose speakers throughout …. vented Whirlpool washer/dryer.

In a perfect world, babble like this would be backed up with a photograph:

A powder room adjacent to the full bathroom features a one-of-kind art installation in the ceiling creating the perception of an endless ceiling with a double mirror and ladder, yet another intelligent design detail that sets this loft completely apart.

We (still) don’t live in my perfect world, so it is impossible to know how significant this “intelligent design detail” is In Real Life.

This modest language is not the way that many agents would describe a loft that was rewired and re-plumbed: “[m]odern improvements in the plumbing, electricity”, so this does not imply a worst-case (higher cost) renovation for those critical infrastructure elements.

Aside from restoring those (glorious!) 150 year-old pine floors, the exposed brick, and those (glorious) original beams, it is pretty clear that most of the renovation budget was spent within 10 feet of the common stairwell:

from the kitchen, to the full bath, to the half bath, to the closets in the master (single!) BR … that’s where the money went

The kitchen had to be the single largest budget item:

it’s (15?) ft, along a single wall, with no bragging about the counter; just the appliances + lacquered wood cabinets

The other big Money Room:

(hard to say how the “custom” pull-out medicine cabinets work; if they’re behind those mirrors, how do they open without hitting the lighting??)

Again, I surely wish for a listing photo showing that in the (tiny!) half-bath.

I have no idea about roof budgets, but this should be expensive

They started with this

your basic unimproved roof

… and ended with this

lots of decking means lots of engineering to support it, and that grill set-up (looks great!) needed a gas line

Even looking again at the lovely deck (grill!) and allowing that the roof deck build-out may have cost more money than I know, there’s a lot of room between the $935,000 (or so) in added value and the (likely) renovation budget. It’s not easy to spend a million bucks on a modest (“1,700 sq ft”) loft, even with a roof. The work almost certainly generated a greater return than the dollars spent, which is a common concern in the Media Division of the Real Estate Industrial Complex. (See my June 11, spectacular renovation of Village penthouse loft is not quite as well received as renovator hoped at 42 East 12 Street, for the latest time I addressed this comprehensively, and ended a trio of Guess The Budget posts [UPDATE: I forgot to link to this June 26 summary post on LinkedIn with the actual Media Division references I was thinking about: Renovation Cost v. Resale Value: some real Manhattan loft stories.)

Before I play the nicely-played card again, there is one thing about this building that should give any potential renovator pause: just how big is the market for a sophisticated (single bedroom!) loft that is optimized for entertaining (between the proportionately huge living room and the roof, this is a party space) that has no elevator?? Five flights up to the loft, and another flight (pause to catch your breath here) to the roof.

In this case, in 2015 the market was deep enough. Not to get the 2011-buyer-turned-2015-seller everything he wanted, but deep enough to get him more than (a) market improvement since his 2011 purchase plus (b) his (likely) renovation budget. (He started at $3.2mm and needed a price drop to $3.1mm after 60 days to get the contract in another 60 days that closed at $2.935mm.)

Not to be age-ist, but the buyer pool for 6th floor walk-up lofts skews young. The buyer pool for lofts requiring cash ($750,000??) to fund a renovation contains some wealthy thirty-somethings, but tends to skew older. Fascinating that this seller created a great loft for a single person or couple who love to entertain, and found a buyer with enough friends physically fit enough for repeat visits to the top floor and roof.

Nicely played, sir; nicely played.

different ways to handle a tape measure, I guess

Things that make me go hmmm  …. When the loft was marketed as a create-your-own space opportunity in 2011 there were “12 foot ceilings”. (Click the listing photos to see that the ceilings were closed, i.e., flat.) The 2011-buyer-turned-2015-seller exposed the ceiling beams (“joists”, no?), which had the visual effect of raising the ceilings (the skylights help this, a lot). I suppose that since there are No Rules, babbling “soaring 14 f00t ceilings” is probably within bounds. Just weird to see a ceiling grow two feet.