which was the mythical Below Market price?
It took a while, and many price drops, for the “1,473 sq ft” Manhattan loft #1180 at 101 Warren Street to finally sell on November 30 for $1.975mm. Staying on the market from January to the October contract shows persistence, and the five price drops from April to September shows a certain motivation. But I am most intrigued by the intro to the broker babble (sparing you the CAPS):
Fire sale! Way below market ….
Our listing system does not capture edits, such that I could tell when that excerpted babble first appeared (specifically, whether it was in the original text or only added when one of the price drops crossed the line to “way below market”). If that text was there from the beginning, it is self-evidently wrong (indeed, ironically so). If it got added on Price Drop #3 or #4, I wonder what instrument was used to measure the point of passage. Here is the full price history; at what point do you think it was way below market?
|Jan 31||new to market||$2.45mm|
Department of Self-Evident Truths (explained)
This loft was professionally exposed to The Market for 9 months at 6 prices, during which time it competed for all buyers (not just cash buyers, or distress vultures) with other 2-bedroom units in the building that were also offered for sale (no fewer than 6 closed while #1180 was on The Market), as well as other lofts in Tribeca that were also offered for around $2mm (per the Master List of Manhattan Lofts Sold Since November 2008, no fewer than 97 downtown lofts sold between $2.3mm and $1.7mm while #1180 was on The Market). I would say that loft #1180 was never priced below The Market and that all this effort simply proved that The Market for this loft this year was $1,975,000.
Tautology? Yes. One day I may do a post about the very specific ways that a loft might sell “below market” (basically, when offered to only a thin slice of potential buyers and/or with unusual conditions to sale), but that day is not today. (Note to self ….) You can slice and dice listings in many different ways, and come up with a different subset of listings that really competed with loft #1180, but there is no doubt that any buyer interested in #1180 had other listings to choose from between the January 31 launch and the October 11 contract; only one of those buyers negotiated a deal to buy #1180, and that was at yet another discount.
Today I will simply note that marketing a listing as “below market” is (a) mere puffery, at best, (b) unintentionally hilarious, if that puffing started before many of the 5 price drops, or (c) something in between, none of which is particularly helpful in making a sale. That is just my opinion, but I will hold it firmly until someone points out what I am missing here.
beating 2008 is supposed to be fun
The many offering prices and the broker babble imply that the seller must have been disappointed to sell at $1.975mm. Yet that recent seller bought #1180 from the sponsor on September 4, 2008 for $1,908,847. I can’t see when that contract was signed, but in the flow of sponsor sales in 2008, #1180 fits in with other 10th, 11th and 12th floor sales both in terms of timing and price. For example, #1280 sold the same day as #1180 at $1,928,628, and #1080 sold on August 8, 2008 at $1,939,766.
Loft #1180 sold last month at a 3.5% premium to the sponsor sale, in part because the #1180 seller made a relatively good deal with the sponsor. That seller netted a loss, as that 3.5% won’t cover the sales fee, let alone the New York City and NYS transfer taxes, but from a market perspective the loft sold at a premium.
Perhaps that seller thought #1180 was offered below market because #1280 was offered for some of the same time at a much higher price. But an offering price of $2.5mm for a loft with a tenant into 2012 that was unsuccessful for 3 months can hardly be said to set The Market.
There are other lofts at 110 Warren Street that have re-sold at a premium to the sponsor sales, as well as many that have sold below the sponsor sales. The best Manhattan Loft Guy overview is in my Apr. 10, 101 Warren Street resale makes news without being new and in my January 16, the difficulty in comping in former new development / the 101 Warren St laboratory, which noted a range from +22% to (10%), which results were very dependent on when those sponsor contracts were signed.
the horse is still dead, but …
Maybe there is a theory from quantum physics through which it is possible to have a Below Market sale. Call me an old-fashioned Newtonian, but when I see other lofts sell before #1180 and #1180 not sell until the price drops 5 times, I see a sale at The Market. As always, if anyone wants to prove me wrong, or just argue about it, I am willing to listen. But I suggest you start with a different example than #1180.
© Sandy Mattingly 2011