did neighbor overpay for 381 Broome Street mini-loft due to light, or was it extortion?

Manhattan Loft Guy worries, so you don’t have to
The “653 sq ft” (very) mini-loft #6F at 381 Broome Street just sold for $850,000 in a private sale, yet the last resale in the building was #2F (with the identical floor plan and finishes) on April 28, 2011 at $700,000. No reason for you to fret, but I have to wonder why the extra 4 floors in height at the northern edge of Little Italy between Mulberry and Mott Streets would be worth a 21% premium.

sponsor thought there was no spread in 2004
This building was built new in 2003, with the 6 units all sold in January or February 2004. All had the same finishes that the #2F babble bragged about last year (“Italian limestone countertops, stainless-steel appliances, and a full-sized dishwasher…. subway-tiled bathroom … with white marble floors and an oversized pedestal sink”). Full floor units on the 3rd, 4th and 5th floors claim “997 sq ft”, while the duplex penthouse (with terraces on the upper level and roof and balconies on the upper and lower levels) claims part of the 6th floor space for a lower bedroom; presumably, part of the 2nd floor is claimed by the ground floor commercial space.

As noted, #2F and #6F have the same floor plan on the same footprint. When the sponsor sold them in early 2004 they were priced almost exactly the same (clearing prices were $492,804 for #6F and $491,790 for #2F just 6 days earlier). Turns out that the recent premium for #6F over #2F is because the folks upstairs did not want to move.

penthouse had gotten cramped
It has been a while since  I have noted the phenomenon of a neighbor selling to a neighbor. In the dog-eat-dog world of Manhattan residential real estate sometimes the seller is very motivated and the buyer is opportunistic, while in other cases the buyer needs to motivate the seller. Given that there was no public marketing of #6F before it sold on January 27, the fact that the buyers include the record owner of the penthouse (that deed record is here), you would have good reason to suspect that the buyers induced the seller to cash out.

Add to the mix the 21% premium for #6F over #2F 7 months earlier, it seems clear that the penthouse folks did not want to give up their terraces or the balconies, their address or their dry cleaners, or the familiar patterns of their geography since 2004. But they did need more room. They just acquired the “653 sq ft” on the other side of their lower bedroom wall (space that, for them, needs the renovation work required to integrate two living spaces and remove one kitchen) for $1,302/ft.

one of these things is not like the others
Let’s just say that the other lofts on the Master List of Manhattan Lofts Sold Since November 2008 that sold in January at $1,3xx/ft all had some significant plus factor(s), such as being a truly deluxe new developments (no offense, but unlike 381 Broome Street).

  • Cynthia Nixon bought a spectacular loft in Noho, from people who had to over-pay to get their old space back next door (February 7, back story on celebrity Noho loft purchase at 10 Bleecker Street is about the sellers)
  • #9D at the Oculus, 15 West 50 Street, actually sold below what at least one neighbor has gotten
  • #12A at 445 Lafayette Street (Astor Place) is one of those deluxe new developments (note to self: this one sold off $1mm since 2006 sponsor sale; hmmmm…)
  • #4G at 255 Hudson Street is in one of the luxe developments, in a 1-BR line The Market loves

“extortion” is an exaggeration
Unless someone produces a photo, I have to believe that the penthouse owners at 381 Broome Street willingly overpaid for #6F, for them the most unique piece of real estate in Manhattan, whose location location location could not be beat.

But I do wonder in a case like this (obvious over-payment) how hard a bargain the seller drove, or whether the buyers started at a simple can’t-refuse number. As I said up top, this phenomenon happens in different ways.

In my December 14, 2011, private sale of 150 Nassau Street loft with high-floor premium or neighborly extortion, I eventually concluded that the upstairs neighbor had not really overpaid. The Manhattan Loft Guy tag “extortion” has been applied to neighbor-to-neighbor sales since late 2010, and this collection includes 6 such examples, from Flatiron, Cheslea and Tribeca. I should edit this November 9, 2010, another neighbor extorted, as Queer Eye tires of "Soho", leaves 505 Greenwich Street loft for Chelsea, because that Queer Eye guy definitely squeezed by his neighbor. That post linked to another example, in my November 1, 2010, no listing, but VERY motivated buyer for O’Neill loft at 655 Sixth Avenue greases a move to Tribeca.

Note to self: collect all such posts (one day).

© Sandy Mattingly 2012



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