ignore this loft “sale” at 114 Mercer Street

no length between the arms
One of the risks in looking at closed transactions in Manhattan loft buildings is that things are sometimes not what they seem. Or, that they are exactly what they seem if you look a little closer. This … errr … esoteric thought is provoked today by a loft “sale” at 114 Mercer Street reflected in a recorded deed February 16 for the 6th floor unit. The deed changed hands, but if this was a “sale” the transaction involved a great deal more than the deed and the reported sum of $750,000.

Of course the price is a hint that something is going on here. (The 2nd floor sold 4 months ago for $1.95mm, as noted in my December 3, 114 Mercer Street loft sells at $848/ft with 4 windows, 3 mints, 2 dark BRs + 1 exposure.) Another is that StreetEasy shows “[n]o listing associated with this closing”, which is usually (not not always) a sign that there was no public marketing of the loft. Absent more information, I generally ignore such a “sale” for the Master List of Manhattan Lofts Sold Since November 2008, on the assumption that (Below Market price) + (No Public Marketing) = (Not An Arm’s Length Transaction), and would caution market watchers to be skeptical before using it as a comp.

In this case, however, the names on the deed and the notice addresses tell a pretty clear story (unlike some cases in which LLP names obscure what is going on). Title to this loft was transferred last month from 2 owners (A Woman and A Man) to 1 owner (that same Woman). Her address on both sides of the deed (as a transferor and the transferee) is the loft; the notice address of The Man as the other transferor is an Upper East Side apartment.

dollars to donuts
If these two people were married, almost certainly there is a divorce proceeding involved, and other property changing hands. This transaction seems to be well-below-market value even if only for a half interest (one party buying out the other’s equal interest), so is only part of a much larger story.

As I said, this one is easy because the price is so ridiculously low and the names match. Other “sales” may be harder to identify as valid market indicators, even if they are not. If a word to the wise is sufficient, treat “[n]o listing associated with this closing” transactions very carefully.

Of course, you have read something like this on Manhattan Loft Guy before:

• January 17, 2010, riddle me this / the naked data point at 35 Wooster Street, where I uncovered a related-party transaction
• February 7, 2010, measuring arm’s length / not a real "sale" at 125 East 12 Street
• February 9, 2010, the unique property next door at 114 East 13 Street, "sold" to a unique buyer
• March 17, 2010, 170 Fifth Avenue loft sales are confusing, where I think I discovered an above-market ‘sale’
• April 27, 2010, 48 Bond Street closes up 400% since 2008, but …, where the resale was a valid sale but the original sale (from which to measure market movement, potentially) was not
• November 5, 2010, the happy (true!) story about that Pearline Soap loft sold at 20% "loss" as massive triplex assembled , where I used an asterisk on the Master List for the first time (possibly, a bad idea)

© Sandy Mattingly 2011