142 Duane Street loft sells up a million after chilly purchase, lovely renovation

getting it right in buying, fixing, selling … a Tribeca loft trifecta

Axioms are axiomatic for a reason. In the case of the recently re-sold “2,000 sq ft” Manhattan loft #3A at 142 Duane Street the seller got it right not only in buying low and selling high, but in a renovation in between. The truly fascinating part of the story will remain a mystery, as the guy managed to buy at $1.91mm in June 2011 after his seller blew his own opportunity to sell before The Peak, then blew his opportunity to sell at The Peak, and then blew his own opportunity to sell before The Peak decayed into nuclear winter. (Dates, numbers, to follow.) The guy took what had been a charming and well-renovated loft and turned it into a “[s]pectacular triple mint” loft before selling it on October 10 for $2.925mm.

We’ll play with the respective broker babble and listing photos to estimate the scope of work between “[s]pectacular triple mint” and “unique and freshly inventive”, but there is no way the guy spent anywhere near seven figures in the upgrade and the StreetEasy Manhattan Condo Index suggests that the overall Manhattan residential real estate market was up only 14% from the purchase at $1.91mm and the sale at $2.925mm. Nicely played, sir; nicely played.

(In the sort of digit serendipity that makes me smile, the June 2011 purchase price of $1.91mm happens to match exactly the StreetEasy Index of June 2011 of 1.91k, making it so easy to see that the recent sale at $2.925mm vastly exceeds the Index change to 2,188 [for September 2013, the last value available] … I love when that happens.)

The StreetEasy Index implies the guy out-performed the market by … let’s see … 2,925 (minus) 2188 = 737 = $737,000 = 34%. I wonder how much of that $737,000 was due to dollars spent between 2011 and 2013?

reading between the lines of broker babble and loft listing photos, for fun (his profit)

When the loft was last marketed before the recent seller purchase, in 2009, it boasted of being “unique”, “freshly inventive”, and “innovative”. The features then included:

14 ft. ceilings, original fluted cast iron columns and exposed beams …. wood-burning fireplace. …open kitchen [with] custom cabinets, glass tile back splash and top appliances including Viking stove and ovens, vented to outdoors, Bosch dish washer, Sub-Zero. Even a sensor activated fresh water bowl for dogs! Smartly designed office nook, delineated by a sliding door, provides work space or potential 2nd sleep area. The master bedroom suite is enclosed by a floor-to ceiling movable wall and includes a generous pass- through closet corridor and elegant master bath with double sinks, soaking tub and glass-enclosed shower. Utility room houses unit mechanicals, washer dryer and provides storage. CAC. Hardwood wide-plank oak floors and ample closets throughout.

The floor plan from that era reveals that the major limitation in the loft is the single exposure. With only 4 windows on the north wall, I guess the invention and innovation (if not the uniqueness) was to put a long sliding door on the master suite in the northwest corner (that, when open as in listing pic #3) brings light from that corner window into the main space, and separating the office nook from the main space with another sliding door and a partial wall that does not reach the ceiling (compare listing pix #2 and #3), bringing light into the main space from the northeast window. Absent these light-bearing elements the main space would have but two windows, both rather remote from the living, dining and kitchen areas.

(Or maybe the unique, innovative and inventive thing was the “sensor activated fresh water bowl for dogs”.)

When sold recently, the new loft has a floor plan with the office down the east wall to touch the kitchen and changed a new entry to the master suite. The new master suite doors are frenched with “Reclaimed Double Fir Doors”, the office has “Hand-crafted Barn Doors”, and the kitchen has been (somewhat) upgraded to:

Open Chef’s Kitchen w/ Pantry, Viking, Miele and Sub Zero appliances, Whitehaus Farm Sink, Wine Storage, Concrete Countertops and a stunning Walnut Breakfast Bar

I say (somewhat) upgraded because I read the respective kitchen photos as showing the same double oven, range with hood, and frig, the same cabinets with different facing, and new counters on the back wall and on the island (with a new walnut facing on the island … er … breakfast bar). Apparently, he switched dishwashers from Bosch to Miele, also changed kitchen sink, and completely redid the master bath. Many of these things could fall into merely cosmetic upgrades (it is hard it say without having seen both iterations in real life), but there is little doubt that The Market loved the whole picture. (There is no mention of whether the “sensor activated fresh water bowl for dogs” survived.)

Reading between the lives as to what the two iterations say about someone’s life, I would bet a quarter that the 2011-purchaser-turned-2013-seller did not plan to move so soon. Very few people would re-do what appear to have been high-end kitchen and baths in that short an expected turnaround, as the conventional wisdom is that you won’t get your money out by making, for example, an “A” kitchen into an “A+” kitchen.

But the $737,000 “excess” gain over the StreetEasy Index tells you that it all worked out for the guy. And the new loft is certainly more appealing, largely due to moving that office function away from the windows but also due to quality materials like the Reclaimed Double Fir Doors and the Hand-crafted Barn Doors. (They may not appeal to everyone, but they did appeal to the recent buyer. And to me.)

this is what missing The Peak of the overall Manhattan market looks like for a Tribeca loft

I have to go back to the travails of the recent seller’s seller, in much the same way as a slow motion car wreck is irrestible:

(*On this kind of dispute, I prefer the inter-firm data-base over StreetEasy; it obviously did not sell or go into contract then.)

That seller’s best shot was wasted at $2.45mm and $2.3mm, when this loft did not sell in what is still the most active Manhattan market ever. (The StreetEasy Index bounced between 2,110 and 2,119 in these 8 months.) The Peak passed, but prices held relatively strongly until Lehman knocked the chair out from under the market in September 2008.  (The StreetEasy Index bounced between 2,140 and 2,119 in these 7 months, then volume fell off the table, with the Index falling to 1,830 as the seller gave up in July, on its way to a bottom of 1,790 in January 2010 .) This seller’s reactions were always too little, too late; a classic following The Market down, but never catching it.

I’d love to know why that seller chose not to test the public market in 2011, but he actually out-performed the market based on his February 2005 purchase at $1.65mm. He sold at a 15.8% gain (that private 2011 sale at $1.91mm) and over the same period the StreetEasy Index was up (only) 8.5%. Plus, he apparently saved a sales fee on the exit. (Our listing system has the 2005 data that confirms he bought then in the same condition as when he sold in 2011.)

does this remind you of another loft nearby?

Regular and attentive readers of Manhattan Loft Guy will think this all sounds familiar. Fans of an efficient market will be thrilled to know why this is familiar. Two days after loft #3A went into contract the substantially identical loft directly above came to market. I hit that loft when it sold more quickly, in my October 25, 142 Duane Street loft up 48% since 2005, 35% since 2008. Those attentive readers already know the punchline: #4A sold very quickly for $2.9mm on September 12 (contract within 2 weeks). When I say “substantially identical” loft, I mean having not only the same footprint but the same layout (with an office off the kitchen and a master bedroom in the northwest corner), and with finishes that mimic those of #3A down to special doors. The most significant difference I see in these lofts is that the 4th floor still has a tin ceiling.

The dates suggest that the fact that these two lofts did not go head to head was not a coincidence, especially as the same agent represented both. One day I may do post about the considerations when neighbors with substantially similar lofts both want to sell … do they go head to head and let The Market pick a winner, or do they proceed in sequence? In this case the results suggest they both got top dollar, but I can imagine situations in which that is not so easy to predict. Note to self ….