raw rest of floor sold around the The Peak
Here’s an interesting comparison of two very large penthouse lofts on the same floor of the same building, one selling as a total gut job right around The Peak of the Manhattan real estate market for (an adjusted [explained below]) value of $1,126/ft, the other selling 6 weeks ago at $1,400/ft after a renovation variously described in the broker babble as “no detail … overlooked”, “meticulous”, “stunning”, “impeccable”, and even “awe-inspiring.” The not-yet-ready-for-prime-time loft was #12BC at 561 Broadway (Singer Building), with “4,500 sq ft” interior and a “1,300 sq ft” terrace, which sold for $5.8mm on August 20, 2008 (4 weeks before the fall of the house of Lehman). The recent inspirer of awe sale was #12A on September 30, 2010, with “3,000 sq ft” for $4.2mm.
ready to rumble?
In this corner, weighing in at that “4,500 sq ft” interior and a “1,300 sq ft” terrace, we have the #12BC combination with “360 degree spectacular views” and in “glorious raw” condition. In that corner, we have #12A with no outdoor space but “3,000 sq ft” of majestic modifiers, “unparalleled sunlight” [??], and “sweeping views East”. That has to be at least a million dollar renovation ($333/ft), if the modifiers are to be believed.
Unless that #12A renovation cost a lot more than $1mm, the #12A clearing price is a very strong price compared to the near-Peak price of the larger #12BC combo. Taking a million bucks off the cost of #12A would bring the notional raw value (before renovation) to right around the $1,100/ft level … right where #12BC traded two years earlier. That’s without considering that the #12BC buyer had to invest the time in the renovation (with attendant carrying charges during the renovation) and bear the risk that the planned renovation would not work out as well as projected. The #12A buyer moved in to a fully dressed “awe inspiring” space.
Of course, these two top floor units are not directly comparable, because #12BC offers half again as mch interior space as #12A, plus the huge terrace. But given the limits of $/ft comparisons, the market reaction to the two lofts in opposite conditions in two very different market environments is fascinating.
about that adjusted price per foot
You need to know about my May 6, riffing with The Miller on the value of Manhattan terraces, decks + balconies, to understand the adjustment I made to the #12BC price-per-foot valuation, using The Miller’s guidelines for valuing outdoor space. Allocating the purchase price of $5.8mm between the interior (“4,500 sq ft”) and exterior (“1,300 sq ft”) portions would give a range of adjusted values from $1,126/ft (if the outdoor space were valued at 50% of the interior value) to $1,202/ft (if the outdoor space were valued at 25% of the interior value).
I suspect that the appropriate proportionate value to allocate to the outdoor space is somewhere between the two here, where the terrace is less than a third the size of the interior, has those 360 degree views, but is not a true penthouse terrace (accessible from the single level living space; this one is built on top of the interior space). But that’s based on a series of value judgments (no pun intended, honest). Either way, the recent #12A price is still a comparatively strong valuation.
© Sandy Mattingly 2010