nicely played, photographer; nicely played
The listing photos in support of the recent sale of the “2,236 sq ft” Manhattan loft on the 4th floor at 119 Chambers Street don’t lie: that is the Gehry building and that is the Woolworth Building, in each case artfully framed with a window (pix #2 and #3), then taken as though through an open window (Gehry in pic #4 and both in pic #5). Of course the main listing photo is a pure interior shot of the front living room (through which the buildings across Chambers Street are visible), but the next 4 listing photos are more about the views than the interior of the lovely loft with classic elements and modern finishes.
When I visited the loft with buyers in the fall, we were of course drawn to the windows. Funny thing is, that while the pictures are accurate (real Gehry, real Woolworth), they are incomplete. Note that the other photos of the 3 east windows along the long brick wall are either at a sharp angle (pic #6) or so washed with light that the windows read as merely bright (pix #7 and #8). Of course, when you are standing at those windows they are clear; the icons are off in the distance but at about the level of the floor on which you stand is the roof of the labor union services building next door, with skylights and mechanical equipment (how noisy are those air conditioning compressors, anyway?). I am pretty sure that is the parapet of this adjoining building that you see across the bottom of the joint Gehry-Woolworth pic #5.
My folks wondered about development opportunities for the union building messing with these lot-line windows (the floor plan notes them as such), but they never got interested enough to do any research about that risk, or in further considering the noise from the rooftop equipment. In revisiting the listing photos again with the December 28 deed recently filed (and added to the Master List of Manhattan Lofts Sold Since November 2008) I was reminded of that roof. The photos don’t lie, they haven’t been altered, just wonderfully cropped or angled (pix #2, #3, #5), or washed with light (pix #6 and #7). Professional job.
meanwhile, back in the loft …
I glossed over the character of the interior in my distraction over the artful listing photos of the iconic (if somewhat compromised) views; it is well worth reviewing. I mentioned the long wall of brick on the east side of the living room into the kitchen; it is matched by the living room wall opposite. The front wall may have bricks under the sheetrock, but the compensation for sheetrock is that the 3 arched windows take up most of that south wall. The ceilings are tall (11 feet) with exposed wood beams and joists. That main listing photo is framed to just miss the wood-burning fireplace on that west wall of the living room, proving that even a pro can’t show everything.
There is enough space in the front (at 23 feet wide and 26 feet long) to easily fit a dining table without impinging on the living room seating area, and even to fit a piano. The kitchen is the requisite open and chef’s (at scale) with the proper proper names included.
The floor plan shows classic Long-and-Narrow, but there’s a twist. I can’t remember which goes up and which down, but the rear bedrooms are stacked, with the master suite on one level, and the 2nd and 3rd bedrooms with 2 full baths on the other, each on a different level from the front of the loft. My guess is that two buildings were combined at one point (it is pretty obvious where, in the floor plan), with the south building (119 Chambers) having 11 foot ceilings, and the back (north) building having lower ceilings and floors that are offset. (It is easier to picture, even from the floor plan, than to describe.)
meanwhile, back to my point, in the title at least
The full listing history, with the unmatched-by-StreetEasy-deed, shows they had high hopes for the loft, unrealized:
|May 16||new to market||$3.7mm|
That’s 4 prices and 6 months to contract, only 5% off the last ask, but 16% off the first ($600,000 in real money, of course). No doubt, disappointing for the seller ($600,000 in real money, of course, off the first ask). But it is hard to quarrel with The Market, as there are no comp data for this small (4-unit) deluxe condo conversion circa 2008, the early part of the wave at this very busy stretch of Chambers, just off Broadway and feeling remote from prime (or quiet) Tribeca, and precious few true comps nearby (no good ones, at least). Indeed, this is the first residential unit to re-sell in this building since the sponsor sales.
a year end-sale, but not one of those year end-sales
As I have said before, any sale that closed just before year-end did so for a reason, because the bankers, lawyers and title folks were dealing with such a volume that anything that could be deferred into 2013, would have been. (See my January 4, in which Manhattan Loft Guy bravely calls BS on the Market Trend Meme Of The Day, my January 23, was year-end loft sale at 101 Warren Street motivated by tax uncertainty?, and my February 20, Julliard loft at 18 Leonard Street sells up 6% since 2007 (meh!), if this needs explication.) Somebody really wanted to close in 2012, but this transaction does not fit the Tax Uncertainty Sellers Drove Volume meme.
Even at full ask there was not much taxable gain for a seller to have been worried about, and by that first price drop there was none. This year-end 2012 seller was a new development buyer at $2,978,381 on April 11, 2008. Assuming single taxpayer filing status, her bogey for zero tax gain to be recognized was, thus, $3,228,381 (the bogey for joint filers was $3,478,381, which would end the story completely).
Had she sold at $3.7mm, her tax basis would have been reduced by her sales fee (here 5%) plus the exiting New York City and State transfer taxes (1.825%), or $184,275. Add that to the Cost + $250,000 Non-Recognition = $3,478,381. She’d have paid taxes on $221,619 in gain under the full price best case scenario, and on only $21,619 on a full price deal beginning in June. And by October, she was looking forward to a long-term capital loss, not a gain.
Can we agree that whatever the buyer and seller timing considerations were to force this thing to close on December 28, they had nothing to do with a seller being afraid that Uncle would take an unknown but bigger bite out of the proceeds if she sold in 2013? In other words, that the sale of the 4th floor loft does not fit The Meme about which I was skeptical in that January 4 post? (Thank you.)
another obscure motivation
I am going to play with some more numbers here, so if you are not inclined for another digression based on the fact that the recent buyer at $3.1mm just rented the loft out, have a nice day ….
According to this rental listing, the new owner immediately (2 days) listed the 4th floor loft for rent at $15,000/mo and may have gotten that as of 2 weeks ago. Property Shark does not show that the buyer took a mortgage for the 4th floor, but it may be that there is a mortgage that has not yet been recorded.
Taxes and common charges are over $3,400/mo. Getting one of those super rates for a 7-year mortgage (under 3%) for 80% of the purchase price will run over $10,000/mo. I don’t get this math … there’s not much positive cash here month-to-month. Considering that the loft was empty (but cost money to carry) for the first month, it will be a year or so before earning back the no-rent January 2013. Weird plan.
© Sandy Mattingly 2013