52 Thomas Street loft knocks resale out of the park, up 17% since 2008

sometimes The Market mystifies…
I keep staring at the the record of the recent sale of the Manhattan loft #3A at 52 Thomas Street, without achieving clarity. That facts are simple but inexplicable: the first resale in this 2007 new development was at a 16.8% gain over the sponsor sale three years ago and is at a 7% premium to the last penthouse sold by the sponsor 8 weeks ago, on a price-per-foot basis without taking into account the two terraces of that penthouse.

simple is as simple does
Let’s start with the simple details:

The “1,753 sq ft” loft #3A has a wonderful corner footprint that is not-quite-square. Yes, you could add a third bedroom (as the broker babble suggests) but then you’d love the lovely proportions of the 23’ 6” x 26’ main living space, and at least one of its seven windows. The finishes abound with proper proper names, but these are undoubtedly the same finishes in which this loft was dressed when offered by the sponsor.

The sponsor was asking $1.9mm and then $2mm in early 2008, but settled for the deal at $1,883,762 that closed on June 27, 2008, roughly 90 days after The Peak for the overall Manhattan residential real estate market. That is $1,075/ft, and a 5.8% discount.

The recent sale is the first resale in the building and was hardly easy: to market on September 10 (my dates are from our data-base, and area different from StreetEasy’s dates) at $2.395mm; a February 2 price drop to $2.295mm; contract by March 8; and a closing on May 20 at $2.2mm. That is $1,255/ft.

The sponsor tried to sell #PH-B (with “1,751 sq ft” interior and two terraces) for nearly 4 months leading into The Peak at $2.8mm, but took it off the market until March 24, 2010. It has been offered at $2.05mm and $2.15mm, finding a contract by February 9 and closing on May 5 at $2.05mm. That is $1,171/ft before adjusting for the terraces.

#PH-B is a duplex with the same finishes as #3A and only an eastern exposure. I don’t see measurements for the terraces, but they are both about 35 feet long; the 6th floor level is about 5 feet wide, the 7th floor is irregular but part of it looks twice that wide. Using a guesstimate of 400 sq ft to do some rough ballpark math, figure the terraces as worth 50% of the interior space (premiums for being directly accessible and a modest proportion of the interior space) and you get a (ballpark) adjusted value for #PH-B of $1,051/ft ($2,050,000 / 1,751 + 200).

So much for simplicity.

you scratch my head, I will scratch yours
Using that ballpark adjusted value for #PH-B of $1,051/ft as of May 5, when #3A sold two weeks later at $1,255/ft The Market thought there was a 19% premium for the simplex #3A looking north and east than for the duplex #PH-B facing only east with two terraces.

Is the market for duplexes so thin? #PH-C is a little smaller loft (“1,438 sq ft”) all on one level with a single terrace claimed to be “1,70 sq ft” that, like #3A and #PH-B, has two bedrooms and two baths. Using the same 50% terrace space discount as with #PH-B you get a (ballpark) adjusted value for #PH-C of $1,149/ft ($1,750,000 / 1,438 + 85), midway between #PH-B and #3A.

Is it the light? Seems unlikely. #3A sits at the NE corner of the building, which is at the SW corner of Church and Thomas Streets. The north windows look over Thomas Street, which is narrow and has a much taller building across the street; the east windows look out over the wide and very busy Church Street at the ugly and much taller (city?) office building. The market-disfavored #PH-B looks only east, at that ugly building, but is set back a bit on both levels form the building edge, so there should be very good light and (likely) a great deal of sky. I can’t tell which way #PH-C faces.

I have wondered in the past when I see a resale at a premium to a sponsor sale about whether the sponsor left money on the table (can’t put my hand on one of those posts now, but I know they are out there). That is clearly not what happened here, however, as the sponsor had tested the market at higher prices than the eventual clearing price in June 2008.

But for the recent penthouse sales I would be inclined to think that there has been a general market acceptance of this location since 2008, accounting for a 2011 resale of a 2008 sale. But the penthouses did not get the benefits of a general improvement in the hyper-local loft market east of Odeon (how’s EoOde for a locution? just don’t tell Council Member Hakeem [“HaJef”] Jeffries).

Maybe I am missing something about the building that will explain this set of market decisions. Until someone uses crayons and small words to show me what I am missing, this spectacular resale remains that most irritating of data points: inexplicable.

© Sandy Mattingly 2011