hard to comp loft at 115 Mercer Street closes up 10% over 2007 sponsor sale

and up 14% over upstairs neighbor with bad timing
The “2,170 sq ft” Manhattan loft #3A at 115 Mercer Street is one of 7 units in this 2007 residential loft condominium conversion and is now the second resale in the building, a circumstance that makes it difficult to use comp analysis. One interesting data point is the first resale about two years ago, when the neighbor directly upstairs sold essentially the same loft at $2.875mm. Compared to that sale of loft #4A the recent clearing price of $3.275mm for #3A looks pretty good, but this listing history tells me the sellers were disappointed to get only $3.275mm:

That’s off 16% from where they started. The three prices in the first 11 weeks show a high level of motivation, as does doing a deal a hefty $625,000 off the first ask, and $220,000 off the last.One might say, they gave it a shot for a huge premium over #4A at $2.875mm in April 2010 but when it did not work they adjusted. And adjusted again. And, one more time.

adjusting for a market slam
The #3A sellers knew (hoped?) that the #4A resale at $2.875mm was anomalous because the sponsor sale of #4A on February 1, 2007 was at $3,156,575. They could see that #4A came out at at a difficult time and was out there in the market a long time:

Clearly, #4A was fighting the nuclear winter in the overall Manhattan residential real estate market for most of that first 7 months on the market, with the thaw beginning at the end of that period. In the retrospect available to Monday morning quarterbacks like Manhattan Loft Guy, these timing and market decisions could not have worked out worse: they started at the wrong time, they took a hiatus at the wrong time, and they did not give it enough time in that brief effort in the Fall of 2009. Then they came back to market in the new conditions of 2010 at a price suggesting a higher confidence in their value, but (it appears) they took the first deal that presented itself. (I don’t see a contract date in our system, but the StreetEasy date of April 21 is 2 days after the closing; that deal must have been struck almost immediately after they brought #4A back at $3.1mm.

In short, that #4A tortured history suggests that those sellers got squeezed by the market in 2009 and may have left money on the table in 2010. I can see why sellers and agents in 2011 would make that argument about the #4A comp when #3A came to market, even though #4A in April 2010 was not actually a trough sale. Clearly, The Market accepted that argument, but not to full extent of $3.895mm, or $3.695mm, or even $3.495mm.

Nice try, that worked “a bit”. It got the #3A sellers 10% more than they had paid in the original sale, $2,978,381 in October 2007. If you did not know that they had been asking $3.895mm at the start, you’d think that +10% over the sponsor price was a good result (even if sales fees and transfer taxes would have eaten up most of that 10% gross gain).

© Sandy Mattingly 2012