131 Watts Street penthouse loft asks: if you can’t sell in 2006, 2007, 2008, or 2009 …

… can you sell in 2010?
If a Manhattan loft owner tried to sell in each year since 2006 without success until two weeks ago, he deserves ample credit for Trying. But does that credit outweigh the Demerits he earned by missing The Market for so long? In the case of the (true!) penthouse (not so "true", as the terrace is not a wrap, but one flight up) on the 6th floor at 131 Watts Street , the frank Manhattan Loft Guy answer has to be … maybe. On the one hand, the asking prices were out of line with The Market until this year; on the other hand, he was only on The Market for about 16 months total from the initial effort in November 2006 until the contract in August 2010.

More peripatetic than stubborn. Or maybe he got distracted or discouraged. The third time was the charm, as you will see….

that’s R – E – P – I – T – I – T – I – O – N rather than P – E – R – S – I – S – T – E – N – C – E

Nov 9, 2006 new to market $4.1mm
Dec 15, 2006   $3.75mm
Feb 22, 2007 hiatus  
June 6, 2008* back $4.5mm
Sept 22, 2008   $3.95mm
Jan 22, 2009   $3.25mm
Feb 19, 2009 hiatus  
May 11, 2010** back $3.1mm
July 14, 2010   $2.895mm
Aug 18, 2010 contract  
Oct 18, 2010 sold $2.75mm

*Tenant through April 2009; showings limited to Wednesdays and Fridays between 3 and 4 PM
**Tenant through August 2010

"here Female Dog, here girl …"
With the benefit of omniscient hindsight, the best shot was the first one. Instead of shying away from the pre-Peak market in early 2007, a few more months and a couple of more price drops might have gotten a deal done in 2007. Or, if he had come back to market earlier in 2008 than June, at a price that reflected not having sold at $3.75mm, instead of a price that reflected the lack of immediate awareness that The Peak was immediately behind him by June 2008.

bad luck + hubris = deadly
The task was made more difficult during this second marketing period by two major complications form having a tenant in place through April 2009:  a buyer would have to choose between (maybe) buying out the tenant or deferring occupancy; and showing times due to the tenant-in-place were
very limited and our system shows only a single open house during this marketing period. Not to mention that the price was nearly 20% higher than the last unsuccessful price. Hard to sell with any one of those problems….

To his credit, the seller made two large price cuts in this second period: the first the week following Lehman’s bankruptcy filing at $550,000; the second four months later at $700,000. Cumulative drops of 25% showed real motivation, but the overall Manhattan real estate market had entered its nuclear winter by then, so he was wise to lick his wounds and go off the market in February 2009.

Humility is returning to market this time at a lower price than he had left it 15 months earlier. And then accepting that a further price cut was in order. And then discounting to make a deal in August.

history did not help much
As a small (4 residential units) building with no residential sales since a “1,200 sq ft” unit sold for $1.315mm in November 2005, there were no easy comps for this “2,567 sq ft” penthouse duplex with “800 sq ft” terrace. Taking just the $1,096/ft number from the November 2005 sale and discounting the terrace (with river view!) at 50% of the interior space, that suggests the 6th floor penthouse was worth $3.25mm in late 2005, before making any adjustments for condition or light. Now look (sympathetically) at the last asking price during the second marketing period, during the chill of nuclear winter. Ouch!

paging Patti Lupone
Before you shed tears for this seller, note that he bought at this once quiet and remote corner in far-northwest Tribeca in 1997 for $800,000. That’s just a hair shy of a $2mm gain in 13 years.

© Sandy Mattingly 2010


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