not like young Yankee pitchers
The Manhattan loft #5C at 28 Laight Street (Cobblestone Lofts, converted to condominiums in 2001) came to market last Fall just two days after the neighbor downstairs in loft #2B went to contract. These neighboring lofts are of similar size and utility (both are 2 bedrooms with 2.5 baths, #5C claims “2,899 sq ft” and #2B “2,687 sq ft”); each even has a fireplace. Only one boasts about light and views (#5C), and the #5C broker babble is both more specific and more enthusiastic about the finishes.
All other things being equal, you’d expect #5C to be treated better by The Market. In this case, at least, you’d be wrong. Did I mention that The Market is sometimes not efficient (not rational)?
a form of competition
The sequential competition of #2B and #5C for buyers was kinda sorta like that of Phil Hughes and Ivan Nova this week for the Yankees against the White Sox: not competing against each other directly, working against more or less the same market (team) one after the other, absolute ‘success’ measured by the result (win or sale), relative ‘success’ being difficult to assess (which result is ‘better’?).
Hughes went 6 innings for a rain-shortened shutout Tuesday night. Nova went 7.2 innings giving up 1 run and striking out 10. Neither walked a batter. Both won the game. Tough roster and rotation calls to make for the Yanks, as Hughes was Very Good, Nova Very Good+. Competition was not so hard to call between these two Cobblestone Lofts:
|Aug 30, 2010||new to market||$2.995mm|
|Oct 22 2010||new to market||$3.2mm|
|Jan 5, 2011||$3mm|
YMMV, so you might assess #5C as a Very Good result and #2B as a Very Good+ result. But I am not convinced about either one.
back to 2005?
The cold hard market result for #2B was a December 2010 sale at $2.75mm, which is all of 1.8% higher than the last sale of this loft on June 23, 2005 at $2.7mm. That is a rounding error level of difference five years later. Granted, the intervening markets were one hell of a roller-coaster ride, but the result is the result: the 2010 sale was at the 2005 market. Not a Very Good+ result, and not even a a Very Good result, by my lights.
Obviously, the #5C result is comparatively worse. Recall that there was no bragging about the views in #2B, which directly overlooks the Holland Tunnel spillways from a low floor. The traffic outside #5C (with a view only east) is no worse (better, if only because higher), and the open view is dramatically superior (I have seen #5C, not #2B). Yet #5C sold at a 6.4% discount to #2B on a dollar-per-foot basis, taking much longer to find that contract. It wasn’t that way the first time they sold.
speaking of cold hard facts…
I rarely talk about September 11, 2001 (even less often in connection with tawdry real estate matters) and I generally avoid reading about it. But those events and aftermath are directly relevant to Cobblestone Lofts, so if you are September 11 sensitive, click away now….
As I mentioned up top, Cobblestone Lofts were converted to condos in 2001. Indeed, the timing is ineffably sad, and relevant to the relative valuations of #2B and #5C. 10 lofts in this 31-unit development closed between August 6 and September 6 that year. Remarkably, #2B and another 10 lofts closed between September 28 and the end of 2001. (How did they even do walk-throughs??) In the case of #2B, the contract had been signed by April 27, and the sponsor price was $1.324mm (a full price deal at $1.3mm plus the transfer taxes).
The original #5C buyer did not sign a contract until December 18 that year. The sponsor’s price (unavailable on StreetEasy but in our data-base) had been $1.475mm in June, dropped to $1.425mm, and the original #5C buyer paid ‘only’ $1.395mm (including transfer taxes) on January 31, 2002.
Point being, the sponsor thought that #5C was worth a premium of 5% on a dollar-per-foot basis before September 11 ($484/ft vs. $509/ft). Point being, this context shows that the fact that #5C in June sold at a 6.4% discount to #2B in December suggests that #5C under-performed The Market. We already know that #2B was essentially flat over June 2005, so that moves the #5C sale as equivalent to an even earlier market.
back to baseball
Nothing to write home about here. Unlike the performance this week of both Phil Hughes and Ivan Nova.
Or of (Aaron Friggin’?) Boone Logan last night (whew!). Hoping to have some more fun in the Fens today…
© Sandy Mattingly 2011