25 Murray Street loft slow walks through market, takes 7 months to deal at small discount

inefficiency is maddening

The “1,850 sq ft” Manhattan loft #6E at 25 Murray Street (Tribeca Space) recently sold for $2.145mm, at a tiny discount to last ask, less than a 5% discount to the prior ask, and less than a 7% discount to the first two offering prices. Not knowing more than that, you’d have to say that the loft was priced correctly from the beginning and you’d probably guess that the price drops were quick indications that the seller was (to use a technical term from the Manhattan residential Real Estate Industrial Complex) “motivated”. You wouldn’t be wrong in having to say that that, but your guess would be wrong.

This is the kind of listing history that leads listing agents and sellers to pull their hair out:
 

Assuming the seller was reasonably negotiable from the start (not everyone is, of course), a loft worth $2.145mm should provoke a buyer by asking $2.3mm. Didn’t happen that way early last year.

Assuming the seller was at all negotiable (nearly everyone is), a loft worth $2.145mm should provoke a buyer by asking $2.49mm. Didn’t happen during late Summer last year.

It took more than 3 months to get into contract when the seller was asking almost exactly the right price, if “almost exactly” is understood to mean 99.814% of the clearing price.

an aging bit of inventory

The critical context for this history is that during the entire listing period for loft #6E, the overall Manhattan residential real estate market was suffering from low inventory. Buyers repeatedly (and legitimately, if hyperbolically) said “there’s nothing to buy”, meaning that The Good Stuff came and went to contract quickly.

I counted on the Master List of Manhattan Lofts Sold Since November 2008 27 lofts in Tribeca that closed between 90% and 110% of the #6E closing price from April through the end of 2012; many more lofts closed in this dollar range elsewhere downtown.

Every loft sale involves a specific seller and (especially) a specific (unique?) buyer, so it is impossible for an outsider to the transaction to understand why this deal got done at this price on that date. Was the buyer a consistently frustrated loser on other lofts, or was the buyer new to market? Did the buyer prefer this busy corner of southeast Tribeca because of proximity to subways or Wall Street, or did the buyer really want prime Tribeca and settle for this location?Without knowing the details, it is impossible to … er … know.

building values

Perhaps this is a single data point in support of the proposition that Tribeca Space 2-bedroom lofts trade within a very narrow range. (That might explain the price, but not the time it took to get there.) Exhibit B would be the smaller (“1,651 sq ft”) loft #6G, which sold at $1,148/ft relatively quickly (to market November 16, in contract January 6). Exhibit C would be loft #3E with the exact same footprint as #6E (it was marketed with the 6th floor floor plan, in fact), which sold at $1,135/ft after a marketing campaign that involves a story (below).

In this context, #6E at $1,159/ft makes perfect sense, but (again) the timing is the piece that is a persistent headscratcher.

Back to Exhibit C …. Loft #3E has a parallel listing history to that of #6E, with the simple explanation that not only was it the same listing agent, but the same seller (correcting for an obvious typo):

That was an interesting choice, for the owner of #3E and #6E to compete against herself so directly. She decided to change the dynamic by taking #3E off the market for the end of 2012 until #6E went to contract, but by then the damage had been done, the die cast. The #3E buyer had to figure that #6E went to contract for no more than the last ask, and chiseled negotiated a reasonable discount for floor height. That spread is efficient; it is the extended timing that makes fans of a rational market despair.

(Whether this worked out financially for the #3E/#6E seller depends on the rental stream against her cost of carry on at least one of the lofts. On a buy/sale basis, she probably barely broke even after expenses, having paid $1,858,306 on July 17, 2008 for #3E and $1,883,762 for #6E on December 30, 2010. That was another interesting choice, to double down in the “E” line in 2010.)

(unintended) irony alert

The headline for the #6E marketing description on StreetEasy has probably been there throughout the marketing period. I don’t know whether to wince or to nod: “TriBeCa is in High Demand and For Good Reason”. Gonna go with wince.

© Sandy Mattingly 2013