195 Hudson Street loft takes deep haircut to close up 385% (since last century)

speaking of low-balls …
Since the “2,325 sq ft” Manhattan loft #3D at 195 Hudson Street recently sold at $2.85mm after having been asking $3.5mm, you have to wonder just how low that negotiation started. A negotiated discount of 18.6% implies an opening bid that would be considered a low-ball if it had not been so successful. Sometimes, at least, a “low ball” bid is not a problem for anyone, contra the media meme I addressed just last week in my April 6, testing a media meme in the Manhattan loft lab: low-balling and the too-low offer.

The relatively brief sales history is interesting, for having few months and but one price:

Oct 4, 2011 new to market $3.5mm
Dec 20 contract  
Mar 16, 2012 sold $2.85mm

A short but brutal history like this makes me wonder about who, as between the seller and the agent, was pushing the asking price at the start. They agreed on the ask, of course, and the seller was convinced that a big haircut was in order to get a deal within only 10 weeks. A lot of sellers would only entertain a bid 20% off the asking price if they dropped the price (say, 10%) to signal to the entire potential buyer pool a willingness to cut a deep deal. Some buyers who would be willing to spend near $3mm would not pay much attention to units asking a half million too high. They might well participate on an ask much closer to $3mm than an ask of $3.5mm.

Whatever the back story, the seller turned out to be pretty darn negotiable after a relatively short time for such a dramatically different approach. Having paid $588,000 for the raw loft in a 1999 sponsor sale (plus whatever the lovely build-out cost), the seller evidently had enough room to make a comfortable sale at even a large discount. Especially, as explained below, the $2.85mm clearing price was a strong sale based on building comps.

is light an over-rated loft feature?
The floor plan is only on the PrUDE site, not on StreetEasy for some reason. Especially for a loft that sold at over $1,200/ft, it is a floor plan with issues. Issue No. 1: only one wall with windows. Issue No. 2: only one “bedroom”, as built, and that with no windows (but glass walls). Issue No. 3: the long wall of windows faces west, at the east facade, with brick, windows and fire escapes, of the 7-story building an alley-width away (see the building photo #7 on the listing, and note the windows in the living room and kitchen photos).

So … there is no view and limited light into the living room, kitchen and (unpictured) den, and light in the master suite only when the custom “window coverings” on the glass walls are open to the den and living area. (In the 5th photo you can see the glass walls of the study on the right and the master on the left, both with drapes closed.) While the extensive glass makes the loft as bright as it can be, there are real limits to how bright it can be.

loft comping is hard, but fun
Compare the #3D floor plan to the #5D plan to see that there are choices within this same footprint. The #5D original owner put (real) bedrooms in the opposite corners of the window wall, where the #3D kitchen and den are), moved the kitchen back along the north wall, and showed that there are plumbing stacks for an en suite master bath, a second bath in the southeast corner, and the potential for a full bath adjacent to the second bedroom. The light is evidently better from the 5th floor (“Good Light, No Views”, per the #5D 2010-2011 broker babble) and the layout differences are matched by the very different looks of #3D and #5D from the different use of colors and materials. You would not know from the listing photos that you were looking at 2 lofts in the same part of the same building, 2 floors apart.

Where #3D has dark and light (ebony stained floors, all that glass), #5D has blonde floors and kitchen cabinetry, and solid bedroom walls topped by clerestory windows. Where #3D will have a somewhat pinched sense of space from the entry (look at that 5th listing photo), #5D will seem wide open. Where #3D is sleek and modern, #5D features 4 “mushroom” columns as classic loft features (I see only two in the #3D pix, and none on the floor plan??).

Loft #5D was marketed as having high-end finishes: proper proper names in the kitchen, a “Spa-Like, Ensuite [master] Bath including 2 person Jacuzzi tub and bidet”, and a “Second spacious Bathroom [with] Steam Shower”, but The Market did not like it anywhere near as well a it liked #3D a year later. #5D came out at $2.28mm in November 2010 and sold on June 23, 2011 at $1,875,990, a number that screams out a contentious negotiation.

Note that #5D sold with but one asking price, and that the (eventual) deal was at a 17.7% discount to the ask (the agent changed firms mid-stream; I see no price changes before contract). So the two lofts have that discount in common.

But note the vastly different values: sleek and glassy #3D cleared at $1,226/ft last month; the slightly smaller (“2,299 sq ft”), blonde and open #5D cleared at $816/ft last June. For those scoring at home, that is a 50% premium for #3D over #5D; remember my statement up top that “the $2.85mm clearing price was a strong sale based on building comps”? Make that a very strong sale.

Remember my comment on how different these two lofts look? You would not know from the clearing prices that you were looking at 2 lofts in the same part of the same building, 2 floors apart, both built out new in 1999.

one more time
When #5D came to market in November 2010, #4D had sold 5 months earlier. Same footprint, but yet another different floor plan (one real bedroom, 2 interior ‘bedrooms’). You can’t see the pix very well and the babble lacks the enthusiasm or detail of that of #3D, but the experienced loft agent called #4D “stunning”, and the stainless + granite kitchen “gourmet”. I will stop after noting that the $2.32mm sales price on June 30, 2010 comes to $1,010/ft, about half-way between #3D and #5D.

With this building sale context, you can see that the #3D seller was maybe not too disappointed to move off of the $3.5mm ask. Even if selling at $1,226/ft was no where near top building values (I hit a sale at $1,548/ft in my September 6, 2011, was there a million dollar renovation at 195 Hudson Street?). Now I will stop….

© Sandy Mattingly 2012


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