44 Laight Street, where another flipper scarfed most of the gain, but did he work for it?

we’ve seen this movie before
It is some news that the “4,021sq ft” Manhattan loft #4A at 44 Laight Street (Grabler Building) sold on August 17 at $4.06mm, give that it last sold in December 2006 at $3.75mm, as that post-2006 gain of 8.3% is interesting for those readers looking for data to answer the question of how current Manhattan loft market pricing compares to past years. Noble as that question is, I find the earlier data point in this loft’s sales history to be distracting: that December 2006 seller at $3.75mm bought from the sponsor in January 2005 for $1,570,802. In gross terms, that is a gain of $2.18mm in 22 months, before considering expenses. Yikes!

I recounted a similar story recently, in my September 9, darn 2006 flipper ate up all the profit of 15 Broad Street loft, in which the title of the post sums it up. That example was more dramatic, as that flipper pocketed a huge gain, while his buyer ended up selling at a loss. Here, at least, the 2006-buyer-from-flipper made 8.3% instead of losing, but the flipper’s gain was 140%. In 22 months. Very distracting, indeed.

I don’t know, but I suspect there is a simple reason for the spread between the sponsor sale in January 2005 and the flipper’s exit in December 2006, and I suspect that the simple explanation has to do with the condition in which the sponsor sold #4A originally. There is not enough information in our inter-firm data-base to compare the January 2005 condition to that 2 months later, but this “new developments” nugget from The Real Deal back in the day (May 1, 2004) suggests an answer: “Apartments in the lower floors are unfinished; eight apartments on the top three floors are fully finished….”  If #4A was sold as a white box, while the floors above were sold as finished, that would account for (most of?) the spread between $390/ft for #4A in January 2005 and $684/ft for #5A 3 weeks later.

If $684/ft more accurately reflects the value of an “A” loft fully built out, that would also make a little more rational the gain after 22 months to $3.75mm ($933/ft) if it was also after a build-out. Look at the history of #6C, which is the only loft “on the top three floors [that TRD said were to be] fully finished” that has sold here since 2006: sponsor sale in October 2004 at $1,420,458 (with a parking space); resale at $1.9mm (without the parking space?) in July 2008, a near-Peak sale at only a 34% premium. That makes more sense, right? That the 4th floor lofts were sold as white boxes, so the subsequent #4A sale at a 140% premium was due (in large part) to the build-out….

But, then how to explain #3A, sold by the sponsor in October 2004 at $640/ft, or $2,392,887? Not to go crazy here, but our data-base has a full listing description for that sponsor sale, with much more detail than for the sponsor sale of #4A. Looks as though #3A was sold fully built out:

LOFT 3A is a wonderful 3700sf’ home. This loft features 11 windows with beautiful light and views South over St. John’s Park and North. A wonderful home, 3A offers 2 huge MASTER BEDROOM SUITES and a 3rd large and windowed Bedroom with a 3RD Bath. There is a Powder Room, as well. This home offers a huge cook’s kitchen with walk-in pantry. Amenities include: 11’+ ceilings, original columns, a gas fireplace, and air conditoning [sic].

Loft #3A re-sold in June 2010 at $4.2mm, a gain from 2004 to 2010 of only 75%; again more rational than 140% for #4A from 2005 to 2011.

Somebody out there knows the answer to this riddle (Rudi??), but not me.

walking down memory lane
Attentive Manhattan Loft Guy readers will remember this building from my June 2 about the “4,021 sq ft” #2A, stubborn loft seller at 44 Laight Street takes a year to get right (great!) price, which told the tale of a seller not dropping the price to get a 95% contract after 11 months. I have to guess that The Market thought #2A was worth 22% more than #4A because the original purchaser of #2A did a more impressive build-out than the original purchaser of #4A.

Loft #2A had a sponsor sale price very close to that of #4A ($1,683,708 v. $1,570,802), yet when they both sold in 2006, #2A earned a huge premium ($4.775mm v. the $3.75mm previously noted). It certainly appears as thogh #2A was originaly sold as a white box, then massively over-improved, compared to #4A.

tripping down memory lane
Really attentive Manhattan Loft Guy readers will remember this building from my July 25, 2006 post about new condo buyer complaints that the cobblestones in front of the Grabler Building were slippery and a hazard to strollers and heels alike, Cobblestone wars / PR muscle moves in??

When I came back across that ancient (in blog years) post, I played around in The Google, finding this 1992 Landmarks Commission report (pdf) supporting the Tribeca North Historic District, which is great fun to peruse. Among other things you might learn is that this block had been “elegant residences” in the 1820s, then shifted to “warehouses and store and loft buildings”, following the warehouse development of the block across Hudson Street to the west after 1880 (see p 90/182). The description of the architecture and history of the Grabler Building is at p 98/182.

© Sandy Mattingly 2011

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