how the pros do it: 497 Greenwich Street loft was bought low, sold high

it took cojones to buy then
The semi-famous folks who just sold the “2,541 sq ft” Manhattan loft #7A at 497 Greenwich Street in the extreme western edge of “Soho” (this micro-nabe does not feel like Soho to me, but I’ve been outvoted) for $3.45mm benefitted from a steely resolve. Not on the sale, which was pretty straightforward: to market on May 24 and in contract at a reasonable discount (7%) by July 4. No, the steely resolve was evident when they bought this Winka-loft: they signed the contract to buy on March 19, 2009, a chilly time in the overall Manhattan residential real estate market, in which relatively few buyers were signing contracts.

The topic of buyers who sign contracts in a falling market deserves a blog post of its own, but let’s give credit to these particular 2009 buyers. (Note to self … start that post with the observation that “everyone” [all the real estate civilian geniuses on StreetEasy Talk, that is] says they won’t buy in a rising market, but few folks have the balls cojones steely resolve to buy in a market without an obvious bottom.) These semi-famous 2009 buyers understood The Market about as well as anyone (they are both agents, obviously) yet they did not know that The Market was about to begin to thaw when they signed that contract; they knew only that they were dealing with motivated sellers.

That now-long-ago deal started with the 2009 sellers buying from the sponsor in January 2006 for $3,105,662. Keep that last number in mind as you review the successful-at-a-price marketing campaign by those first buyers:

Dec 2, 2008 new to market $3.8mm
Dec 19 hiatus  
Jan 6, 2009 back on market  
Jan 21    
Feb 18   $3.2mm
Mar 19 contract  
April 16 sold $2.9mm

(Remember that last number in the intro to the table?)

I am going to guess that the 17 days off the market was a holiday thing, not a cold feet thing. After all, the sellers had the balls cojones steely resolve to come to market 11 weeks after Lehman’s bankruptcy, a time when the chilling effects of that event on the credit markets, the economy as a whole, and the Manhattan residential real estate market in particular were already evident. Like most of the relatively few sellers who sold in that First Quarter of 2009, these folks were motivated; two $300,000 price drops in 60 days of active marketing will prove that. Well, that and the fact that they took another $300,000 off to reacch a deal with our semi-famous couple.

For those of you scoring at home on this Game 3 evening, that’s a deal at $900,000 off the original ask (24%) reached after less than 100 days of marketing. So there’s balls cojones steely resolve on both sides of that deal.

Fast forward to the present day. Our semi-famous couple just grossed a $550,000 gain in 42 months, perhaps after having put down as little as $290,000 up front. Nicely played, scion and daughter-in-law, nicely played.

how the pros should do it
Figuring out even the big ticket expenses to take off the top of that very gross $550,000 is more difficult than usual, because I assume (but do not know) that there is some firm-side fee rebate for these sellers. Chances are very good that they only ‘paid’ a fee much closer to 3% than the 6% listed in the inter-frim data-base.

I assume that PruDE did this on purpose. If you click on the firm website from the StreetEasy transaction page, you get a No Result; if you click on the Previous Sales link on the PruDE page for this condo, you get a whole string of results, including two for this loft, but you do not get this listing or this sale. I am sympathetic to the discretion, but not impressed by the lack of transparency. You put your names on a deed record rather than using an LLC, and your stuff is public. Particularly if you talk to Page Six about your purchase, bragging about how you’d been making low ball offers around town, as I mentioned when I hit the 2009 purchase in my April 29, 2009, 497 Greenwich Street sale was off a low ball?. (Those 2009 sellers were my “Sellers Of The Day” for having bitten that bitter bullet, by the way.)

Speaking of a lack of transparency, you don’t see this sale on the Closed Transactions page for the only agent identified in the listing as the listing agent, either. (You have to scroll down through a lot of closed sales [maybe 100+], but I don’t think I missed it.) There’s no bio for that agent hinting at how long she has been in business, but I don’t recognize her name. I do recognize the bold-faced names on her My Team page, however, including those of our semi-famous couple.

So, an apparently junior team member is the (sole) listing agent on a loft sold by the head guy on her team, a guy whose name and picture are on each listing on the My Listing page for that junior agent, even though I did not find her name or picture on any of those listings with seven figure prices (the vast majority of the active or in contract listings on her My Listings page).

I assume they set up the (now missing) listing for loft #7A this way on purpose. Again, the head guyer on the team (the actual seller, with his wife and fellow team member)  could have been functionally invisible if they had used an LLC to buy this loft. But they didn’t do that. Instead, they set this up in a way that suggests that they did not have to disclose that the sellers are the listing agents. If that was the reason, that stinks; if there’s another reason, I can’t think of one. (But maybe my imagination is limited.) Indeed, it is quite possible that the buyers were made aware that the sellers included the team leader for the “listing agent”.

We’ve been here before. (See my my May 24, 40 Mercer Street news: nothing says successful new development like a 7-figure gain since 2007, and my June 7, agent sells Chelsea Mercantile loft from San Francisco, about the legal requirements.) The easiest, most transparent, most easily documented way to comply with the legal requirement that an owner/agent be identified is to do that in the broker babble. Ain’t there. Not in the public listing description retained on StreetEasy, and not in the inter-firm data-base, including not being in the “broker remarks” field in the data-base.

I really wish I could think of another reason for there not being a public record linking the had guy on that team with the sale of his loft. Any ideas?

about the loft…
Loft #7A has a 3-bedroom-2.5-bath layout, but the broker babble promises that an additional bedroom and additional bath are possible. I don’t read that babble as promising anything that Winka herself (see my May 5, this very Winka-tect designed 497 Greenwich Street loft was all over the inter-tubes, about that design, and her work, and her loft.) did not design:

west-facing living room spans over 28’ feet … modern open kitchen, complete with top-of-the-line stainless steel appliances. … formal dining room and windowed home office. The master bedroom suite with a wall of architectural windows, has custom built-in closets and a massive spa-like bathroom featuring dual sink, separate shower and air-jet Jacuzzi bathtub. … hardwood floors, central heating and air, full sized washer/dryer and is pre-wired for video security

As you see on the floor plan, there is a small balcony off the living room and a terrace off the 2nd bedroom. That’s unfortunate, as having to go through the 2nd bedroom to access the terrace (which extends across the 2nd and 3rd bedrooms) can limit the utility of that terrace when there are lots of people living in the loft. There are no full pictures of the east exposures, but the floor-to-ceiling west windows obviously bring in a great deal of light, but don’t quite clear the nearby rooftops. (The view one floor up will be significantly better.)

This is not an easy building in which to comp. The 22 units took almost for the sponsor two years to sell out from 2004-06 and there have only been 5 sales since, with #7A appearing twice on the list of resales. Only the “1,602 sq ft” loft #4A has sold since the oh-so-chilly sale of #7A in April 2009, so there are no recent comps here.

© Sandy Mattingly 2012



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