extortion or neighborly consideration 505 Greenwich Street loft? you decide
some prices just jump out at you
You won’t find a listing associated with the deed recently filed on the May 13 sale of the “979 sq ft” Manhattan loft #12C at 505 Greenwich Street because it was a private transaction. The sale price is a funny number, but not only because it is decidedly not a round number ($1,929,583). This is what makes that funny number funny: $1,971/ft is so far out of whack with other building sales that it proves that the seller really did not want to sell. Before looking at ‘normal’ values in the building, rest assured that I have a pretty convincing theory for why the seller was reluctant, and the buyers so eager.
The most recent sale in the building was very recent, indeed. The deed for the May 21 sale of the “722 sq ft” Manhattan loft #10G was just filed this week, reflecting a sale at $1.13mm, or $1,565/ft. Loft #6C with the same “979 sq ft” floor plan as #12C sold for $1.45mm on April 4, or $1,481/ft. Here are all the public sales in 2013, so far, with the non-public #12C as a frame of reference:
|#12C||“979 sq ft”||May 13||$1,971/ft|
|#10G||“722 sq ft”||May 21||$1,565/ft|
|#6C||“979 sq ft”||April 4||$1,481/ft|
|#14F||“812 sq ft”||Mar 22||$1,478/ft|
|#3G||“2,801 sq ft”||Jan 28||$1,392/ft|
|#1D||“1,240 sq ft”||Feb 5||$1,318/ft|
That is a wide variety of sizes and floor heights, of course, but a sensible split of values for low floors ($1,318/ft, $1,392/ft, $1,481/ft) compared to high floors ($1,478/ft, $1,565/ft, $1,608/ft). The non #12C average is $1,474/ft, with the top non #12C value at a premium of 9% and the bottom at a discount of 11%. The most direct comp for #12C is #6C with the same floor plan, but that $1,481/ft needs adjustment for floor height. People who know the building (or, avid readers of Manhattan Loft Guy) know that the floor height adjustment sensitivity is for view. Loft #6C bragged about “floor to ceiling windows that face west to beautiful sunset skies”.
You avid readers of Manhattan Loft Guy know that the 12th floor offers more than light to the west, but "panoramic water views”, as well, and that in my February 4, 2011, these water views from a 505 Greenwich loft are worth $370,000 (really), I quantified the difference at $370,000 in otherwise identical “1,279 sq ft” lofts (equal to $290/ft in 2011; in that case a 24% premium). I am a little reluctant to apply that level of premium to #12C over #6C on a pure comps basis, in part because #14A has at least as good views (“including the Hudson River, Statue of Liberty, World Trade Center, and the Empire State Building”) yet cleared at ‘only’ $1,608/ft. I am inclined to think that those folks who bought the Hudson River, Statue of Liberty, World Trade Center, and Empire State Building views in 2011 really overpaid for them then.
And just did so again.
I am not stalking them (honest) but the folks featured in that February 4, 2011 post when they bought #12B are the same folks who just bought #12C (the deed record of #12B is here; for #12C it is above). I assume that the reason they overpaid for the views in 2011 was because they really wanted those views; I assume that they overpaid for similar views in 2013 because they had to. (They already had the spectacular views from the larger “B” loft, so it was likely that adding the loft next door was more about, well, adding the loft next door than it was about getting more of a river view.)
They were dealing with a neighbor who had not put the loft on the market, so they had to go to Make My Day pricing. Paying a funny non-round number like $1,929,583, or $1,971/ft is Make My Day pricing if #14A at $1,608/ft is the previous high for 2013 on a dollar-per-foot basis. That is a 23% premium over #14A and a 33% premium over #6C.
People don’t pay that kind of premium unless they have to.
the Greeks had a word for it
The word I sometimes apply to this neighbor-on-neighbor situation is ugly: extortion. I have tagged 10 previous posts with that ugly term; this one will be #11. Sometimes it involves a public effort to sell, sometimes it doesn’t; sometimes the buyer has leverage, sometimes the seller.
In this case, the seller of the oh-so-unique-to-#12B-owners #12C set a new building record on a price per foot basis that should last for quite a while. And sold for 48% more than he had paid in May 2005. Without having to pay a sales fee. And now the new owners of 2,200 sq ft have to spend more money to combine the two and take out a kitchen. Money does not seem to be a problem for them.
a word of caution
Other owners at 505 Greenwich Street are thrilled with this sale, of course. It will be interesting to see if anyone tries to use it to beat up a reluctant buyer. (Oh, wait.) Non-public transactions between neighbors are not valid comps, however.
© Sandy Mattingly 2013