cop loft sells at 240 Centre Street with challenging layout, off 46% from very first ask

in search of a new locution
The Manhattan loft #4R at 240 Centre Street (the venerable Police Building) is said to be “1,800 sq ft” but it plays smaller, to use a basketball term. It took some energetic price chopping to sell, having started (this time) on April 25 at $3.68mm before closing on November 2 at $2.6mm. Last year they tried 6 months at $3.95mm and $3.7mm. You don’t see many 7-figure price drops at this price point. Nor do you see many clearing prices off $2mm from first ask.

This footprint is very challenging, as there are but 4 windows on one long wall and what looks like a load-bearing wall mandating the separation of the master bedroom from the main living space. One bit of good news is that the very high ceilings (16 feet?) permit a mezzanine; up a real staircase is a second bath, a ‘study’ and a second (open) ‘loggia bedroom’, all on the wall away from the windows. One bit of bad news is that the very high ceilings make it difficult to carve up the space differently, or you’d end up with rooms in which the by far biggest dimension is floor-to-ceiling. (I saw this place with a buyer, probably in 2010, and even in the relatively large master bedroom, the ceiling height is distracting … almost too tall.

You could fairly say this loft is a One Bed Wonder, but the #4R footprint is more challenging even than that locution suggests. If you put a ‘real’ bedroom (with window) on the main space, you would surely ruin the sense of volume, and make a silo of even the living room.

Some One Bed Wonders can be transformed into lofts that sensibly have multiple bedrooms, though often at considerable expense because a lot of thought and money went into the current design. I don’t think I have ever before identified my original One Bed Wonder, and it is very unfortunate that the surviving listing for loft #2B at 22 West 26 Street, has only one picture and no floor plan. I described that loft in my first post using the term One Bed Wonder (nearly 5 years ago!) as:

This loft – which has been on and off the market for 2+ years – is a quintessential 1 Bed Wonder. Part of its (considerable) charm is that it feels so open, that it flows so well. Part of that charm is because the “walls” did not completely enclose the master bedroom, the guest room, and the library, all of which shared these walls with the open living area.

The original owners had great taste – and a house in the country for entertaining grandchildren overnight. It was simply not a space in which you would want someone else sleeping in a different bed. The present owners put it on the market as they were about to have a child. I have no idea how they live in that space with a child.

The “problem” with that specific space is that if you were to renovate it to make it suitable for a family, you would probably ruin its charm. It may live and die (and sell, or not sell) as a wonderful space in which everyone but the owners go somewhere else to sleep every night.

Other 1 Bed Wonders are more forgiving of renovation possibilities. Add some walls, expand a half bath into a full bath – or even more substantial renovations – would not necessarily reduce the beauty of the space.

Loft #4R in the Police Building is basically a 1-bedroom+mezzanine of “1,800 sq ft”. There are only a precious few lofts that size that cannot accommodate multiple bedrooms, if money permitted. That is why I say of this one that it plays smaller than its size. The loft I hit in my November 16, O’Neill loft at 655 Sixth Avenue closes resells at 21% loss over 2007, has the same issue, at a slightly different scale (a “2,400 sq ft” 2-bedroom layout that cannot support a 3rd bedroom). I talked there about how challenging that layout is, but now I see that I could have coined Loft That Plays Small for that one last week.

Note to self … look for other lofts that are distinguished from, as I put it on February 24, 2007, “1 Bed Wonders [that] are more forgiving of renovation possibilities[, in which …. a]dd[ing] some walls, expand[ing] a half bath into a full bath – or even more substantial renovations – would not necessarily reduce the beauty of the space”. You’d ruin (reduce the beauty of) #4R by adding a second bedroom, just as you’d ruin #3F at the O’Neill by adding a third. That’s not true of all One Bed Wonders, like #2B at 22 West 26 Street.

a tough building
Loft #4R has an even more extended listing history than last year. The 2011 sellers tried to sell in 2007 by asking from $4.78mm to $3.95mm for two quarters just before The Peak. But even the most active and deepest residential real estate market ever in Manhattan could not support those prices by generating a contract. So one way to measure the sellers’ eventual disappointment is that they sold at a 16% discount to the last asking price; another is that they sold at a 29% discount to the first asking price in 2011; yet another is that they sold at a 34% discount to the first asking price in 2010; but the kick in the teeth is that they sold at a 46% discount to their very first asking price (June 2007).

The experience of the #4R sellers of having The Market thumb its nose at their listing at their price is different from the experience of many neighbors in only one way: they eventually sold #4R. Let’s start by saying that the Police Building residents have had an exceptionally difficult time finding willing buyers. In fact, I can’t think of another building in which there have been so many unsuccessful listings and so few successful sales as this:

• in 2009, 5 units were offered for sale, none sold
• in 2010, 4 units were offered for sale (including #4R), 2 sold
• in 2011 (so far), 4 units were offered for sale, only #4R sold

Net:

• total sales since June 2008: 3
• total listings since June 2008: 13

the wide world of lofts
Another way to look at it is that the Police Building loft owners love their lofts so much that they think others hold love them as much as they do. They have been notably unsuccessful in convincing the rest of the world, that’s all.

One of those successful sales was the “2,000 sq ft” loft #4G, which cleared at $2mm on May 5, 2010. That floor plan is much more sensible (and flexible) than that of #4R, in part because it is a corner unit with 2 exposures, and in part because the mezzanine doubles the bedrooms over each other. That seller also had a difficult time selling, having started just before the onset of nuclear winter at from $4.2mm, and bouncing to $3.7mm, to $3.495mm and finally to $2.995mm. That seller then negotiated a further drop to get a contract in February 2010 at that even $2mm — a 33% negotiated discount. Talk about the agony of victory….

I cannot reconcile the #4G sale at $2mm with the #4R sale at $2.6mm. Functionally, they are very similar, and are of a very similar size, though #4G is both larger and enjoys a better layout. Yet #4R sold at a 44% premium to #4G on a $/ft basis. Yes, #4G endured through the nuclear winter, while #4R sat out the worst part of The Market. The comparative results are simply irrational to me.

buyer (hearts) Police Building
Obviously, the #4R buyer likes the building enough to pay $2.6mm this month. What you wouldn’t know without nosing around is that this #4R buyer also owns the “980 sq ft” #2L, which he bought for $1.2mm in June 2008. Obviously, that was a very close to Peak purchase. He appears to be holding on to that one at this point. (He really loves the building!)

fun fact from the last century
Per our data-base, the loft was purchased in 1999 for $745,000, probably by this month’s seller as I see no intervening closed sales.

[UPDATE Dec 2: Curbed has the link to a New York Observer piece with the back story on both the buyer and seller of #4R, and squinting to find a mystery:

It’s unclear, however, if he will combine the two as the brokers refused to comment citing a strict confidentiality agreement on behalf of Mr. Gobbi. International man of police building mystery!

Note to Observer: no mystery! The buyer would have to be a magician (or buy a few more cop lofts) to combine a duplex on the 2nd floor facing east with one on two floors above facing west. Unless the Gobbi guy needs permanent guest quarters, expect #2L to be available for rent as soon as he moves in to #4R.]

© Sandy Mattingly 2011