42 White Street penthouse loft sells with 1 bedroom, 5 outdoor spaces at $2,786/ft (before adjustment)

living large (and alone) for $4.65mm
I can read the broker babble (“2 bed”) as well as the next guy, but the floor plan and pictures associated with the “1,669 sq ft” Manhattan loft #6 at 42 White Street make it clear that there is a single bedroom, with a “den” upstairs that lacks a closet (but has a pool table; and a wet bar). The lack of a proper 2nd bedroom was hardly a problem, however, as this penthouse loft’s other charms include 4 terraces and a roof deck, indoor and outdoor grills, and other things we will get to in due course. When I say “hardly a problem” I mean to refer to the mere 6 weeks this was on the market and to embrace the fact that it sold above ask. One more thing, which I will repeat for emphasis: this is a “1,669 sq ft” penthouse (with all that outdoor space, yes) that just sold for $4.65mm.

That brief history and stunning conclusion (to market September 6 at $4.495mm, in contract by October 17, sold on February 8) says far more about the quality of the loft than the photos and the broker babble. The babble has some powerful adverbs and proper proper names, but I could read it six times and scroll through the pix again and again and still not be prepared for a $4.65mm experience.

There’s nothing wrong with the photos or descriptions, mind you, I just have to believe the space shows better in real life than on the inter-tubes. (Pardon me, but the surface of the large terrace in pic #5 can’t really be the cheesy suburban astroturf that it appears to be in the photo … right?) But the photos were a major piece of the marketing campaign that did its job extraordinarily well . (When I say “extraordinarily well” I mean 6 weeks to get a deal above ask for a loft that may be impossible to comp.)

You do see the sweeping stairway in two listing photos, but I’d like a more direct shot of an “architectural masterpiece” (if the world ran according to Manhattan Loft Guy, that is). All in all, there are only 4 interior photos, so I guess I feel cheated not having more. The buyer did not feel cheated, of course; though the one who bid that guy up but did not win the bid may feel cheated, he won’t be blaming the listing photos.

when is so much of a good thing too much?
Our listing system says the 5 outdoor spaces total “1,500 sq ft”. My eyeball geometry thinks that is pretty accurate, as the interior is only “1,699 sq ft”. It feels a little like the kid in the candy store complaining that he was left there too long with too much money, but these 5 spaces are an embarrassment of riches. I wonder how long you’d have to live there before you considered it an imposition to climb the last set of stairs, to go from the south-facing 360 sq ft terrace off the den up to the larger roof deck (with what looks on The Google like a 360 degree view).

The Miller addressed this issue in his seminal post, on which I riff regularly. As you will see in my May 6, 2010 post in which I started riffing, The Miller would generally start discounting outdoor space if it exceeds 50% of the size of the interior. This outdoor space of this penthouse loft is 90% of the size of the interior. The Miller’s point about the general way to approach this is that there has to be a point of diminishing returns, when (say) outdoor space up to 50% of the interior is worth more than the ‘excess’ over 50%. An owner can, for example, designate different uses for these 5 spaces (the jacuzzi suggests cigars on that terrace also, certainly the grill on the south den terrace and the wet bar in the den suggest meals will be taken there, but … you see the problem). The interior has 4 rooms (if you count the open kitchen as separate from the living room), while outdoors there are 5 rooms.

There have been no sales in this 5-unit condo for 10 years, which starts us off on the wrong foot by taking away the simplest way to establish an interior value for lovely space in the building, before considering the great outdoors. But note that there may actually be no good comps for this space (meaning, highly relevant, without need of multiple adjustments for location, condition, size, view, amenities, proportion in and out, etc). Put another way, the $4+ million buyer who wanted entertaining space but needed only one bedroom, and who really craved outdoor space, would not have many choices at any given point.

Valuing all the space equally (a nonsensical assumption, but bear with me) yields an observed value of $1,467/ft for a no-amenities building in non-prime Tribeca.

Valuing all the outdoor space at 50% of the interior (probably an aggressive way to value some of that ‘miscellaneous’ outdoor space) yields an adjusted value of $1,922/ft.

There are other ways to do it, for example by treating the (roughly half) of the exterior that is directly accessible from a room as ‘premium’ outdoor space, but discounting the roof deck further for being “too much” exterior space, but any ‘refinement’ like that probably gets us to an even higher adjusted value than $1,922/ft. Again: for a no-amenities building in non-prime Tribeca.

Did I mention that comping is hard? Is it obvious that a $4+ million buyer who craves indoor and outdoor entertaining and who only needs one bed in the space might not view the value of this space the same way a green eye-shade guy like a bank appraiser (or like Manhattan Loft Guy) might?

how is the Manhattan loft market like the Tour de France?
The Master List of Manhattan Lofts Sold Since November 2008 shows $/ft on an unadjusted value, without taking outdoor space into account. When I update the formula column after adding this penthouse loft and other recently recorded sales, this will show as $2,786/ft. This is by far the highest value for any downtown loft resale going back at least a year (with 700 or so data points). Only 14 other downtown Manhattan loft sales even cross the $2,000/ft level unadjusted for outdoor space. (Keep in mind, that adjusting at 50% yields $1,922/ft, a value that would be Top 5% comparing it to unadjusted values going back 12 months.)

Insane bicycle competitions like the Tour de France label “beyond category” mountain peaks that are extreme to a degree that the algorithm for other climbs just doesn’t apply.

This penthouse loft at 42 White Street breaks the comp algorithm. There is no way to prove (or justify) a value of $4.65mm, aside from The Market Fact that someone just paid $4.65mm for it. So that’s what it is worth. Formulae aside, carping from a blogger about photos aside, the asking price of $4.5mm aside.

To use a technical real estate term … Yowza.

the floor plan oddity of the week, if not the month
Pardon me a slight digression. I am not sure what that square is in the southeast corner of the den upstairs (a skylight, most likely), but it can’t be a closet (right?), since it appears to be in front of a window looking out onto the largest terrace. Indulge me by agreeing about that, and now count the closets in the loft. … (Waiting) .… You can stop when you get to one (that long closet in the master … er … single bedroom), unless you count a “pantry” or the space housing the washer-dryer as a closet. Of course people use things like hooks and large pieces of furniture for hanging coats or for general storage, but I can’t remember seeing a Manhattan loft floor plan before with only one closet, let alone one that sold for well over.$4 million. (See what I mean about “living alone” in the first sub-head?)

Another day, another Manhattan loft oddity. Life is good.

(Countdown … 10 … 9 … 8 … 7 … 6 … 5 … 4 … 3 … 2 … 1 …)

© Sandy Mattingly 2013
 

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