20-26 N. Moore Street loft comps out needing $200/ft renovation

a different kind of paired resale analysis
The brief and highly successful marketing campaign of the Manhattan loft #5E at 20-26 N. Moore Street is fascinating on several levels: it is easy to read between the lines to see that this loft needs a lot of work; yet it sold quickly 6% above ask; clearing $505,000 lower than the loft just below that sold in recently-renovated-and-done condition. Of all, that last is the most interesting to me, but let’s start at the beginning.

At this level, and the level below, the “2,700 sq ft” east line of this 2-building-2-entrances coop has little light and no view to speak of. (The floor plan for #5E is here; the identical footprint of #4E is here.) The back of the loft looks at the rear of the 7-story 140 Franklin Street, while the light in the front is reflected off of the newly-repainted white 17-story Atalanta, across N. Moore Street at #25.

The east windows on the 5th floor just clear the roof line of the two buildings that the famous Walker’s grounds, because 20-26 N. Moore Street has higher ceilings than 16 or 18 N. Moore Street, and a much higher first floor. (See this PShark building pic of 18 N. Moore, abutting 20-26 N. Moore on its east side.) If they are lucky, the benefit of eastern light in #5E is outweighed by the ‘view’ of rooftop mechanicals on the eastern neighbors.* (Use the “click on full screen” button that is partially obscured on the Corcoran listing to see what the living room light looks like, with a wall from 140 Franklin Street and the rooftop of 18 N. Moore Street.)

So what charm there is in these spaces will be based on what the interior space is like (even more so in the case of #4E, which lacks east windows), or what it can be made to look and feel like (in the case of #5E).

Maybe the buyer of loft #5E will keep some kitchen appliances, more likely not. Nothing else in the current set-up will survive. It looks and sounds like a loft that has not changed in 25 or more years: 1.5 baths, “currently used as a 2 bedroom with work room and 2 artist studios”. Figure a total gut and re-build. The opportunity quickly attracted a deep-pocketed market:

value as built: around $3.3mm
Keep that $2.805mm clearing price for a gut renovation opportunity in mind. For not only did the newly renovated loft #4E go to contract weeks before #5E came out for sale in 2011, but it had sold in a needing-extensive-renovation condition in April 2007 at $2.725mm. (As such, #4E made my list for my September 27, is the Manhattan loft market back to (up to) 2007? 61 repeat sales say “probably”, “a bit”.)

No photos or floor plan survive on StreetEasy from that 2007 sale, but our inter-firm data-base has a floor plan. Although it was marketed in that near-Peak period as having some charm, the floor plan shows that it was totally gutted before selling again this year. None of this from 2007 survived:

Recently renovated, with personality, this ideal artist’s live/work is now completely open space. Kitchen, nestled behind a glass block wall, has black granite counters, cherry cabinets, new appliances including DW and microwave.

That 2007 buyer of #4E at $2.725mm did, as I said, a gut renovation. The result is both “elegantly” and “beautifully” renovated, with

open Boffi kitchen, Ann Sacks bathrooms, separate laundary room with full size washer/dryer, custom millwork, architectural lighting and california closets throughout [sic, sic]

Of course I wonder what they spent in gutting #4E, but the more interesting question is how the value of #4E (both “elegantly” and “beautifully” renovated) at $3.31mm compares to the to-be-gutted #5E at $2.805mm. The Market in 2011 thought the difference in condition (and the east windows on the 5th floor, to be fair) was worth (only) $505,000, or $187/ft. I’d be surprised if you could do all that good work in #4E for $187/ft. Thus, I am surprised at the (small) gap.

Note that it took #4E a while to find a buyer for all that good work:

Unfortunately, there is no “click for full page view” on the Corcoran site to really appreciate the work, but these pix look pretty sweet. It is not a literally before-and-after set with the current set of #5E pix, but it is close. Call it before-and-what-could-be-after.

just playing around here with numbers
If you think that the minimum for a nice gut renovation is in the ball park of $200/ft (as an architect commenter did way back in December 2007), you have to scramble to account for the too-small-gap between the market valuations of fully done #4E at $1,226/ft and to-be-done #5E at $1,039/ft. The 3 east windows in #5E count for something, but we are talking about views along a brick wall and over a rooftop, so I doubt they are worth as much as 10% to the overall value.

Note this quote from an appraiser in yesterday’s New York Times article about views and new construction perils (see the fn):

“If the price of an apartment is being driven partially by its view,” said Michael Vargas, the president of Vanderbilt Appraisal, “then we have to consider what the impact is once the view is lost.” Good views can contribute 10 to 15 percent more to an apartment’s value, he said.

I don’t see the 3 east windows as a big driver for the value of #5E, but maybe the #5E buyer turned out to be someone interested in #4E who felt that #4E lacked light.

The #5E buyer has months of renovation ahead, during which s/he will be paying to live elsewhere, while also paying to own #5E, while also paying to renovate #5E.

What else can I say? The (small) spread surprises me. I bet it thrilled the #5E sellers.

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* Following up on yesterday’s post about new development possibilities and (temporary) views (October 9, diligence due + negligence committed as West 15 Street lofts + East 15 Street apartments lose views), the two Walker’s buildings were sold last year, in a transaction that The Real Deal reported as including (with my emphasis) “combined 15,263 square feet in the buildings plus the 7,471 square feet in development rights”. Maybe those development rights (if exercisable at all under zoning and historic district limitations) will one day take away even that eastern light on the 5th and higher floors ta 20-26 N. Moore.

© Sandy Mattingly 2011