60 Beach Street gut loft project goes for gold, gets world record
I do not understand this. At. All.
I am going to posit that pretty much all of the sales history of the recently sold “2,557 sq ft” Manhattan loft #4D at 60 Beach Street makes no sense:
- sold by sponsor Dec 21, 2010 $1,438,003
- re-sold January 3, 2012 $2.455mm (after asking as high as $2.995mm)
- re-sold July 12, 2012 $3.05mm (ask: $2.8mm)
I can make it worse, but I still can’t understand it: the loft was marketed as as total gut job (“opportunity to create your dream loft” this time; “brilliant footprint … very susceptible to anyone’s architectural fantasies” in 2011).
In percentage terms, the first re-sale gained 71% in 13 months; the second gained 24% in 18 months. I have a theory about the first re-sale (that sponsor sale had to be some kind of sweetheart or related party transaction); on the second one, I have … nothing. No clue. No (rational) guess. Just a fall back to The Market is not always (ha!) rational. (If you can do better, please do!) [UPDATE 8.1.12: many thanks to reader Magic for the unusual backstory; see his comment below about the time-limited option of the January 2012 seller. An efficient market theorist would look at that sale as not a market sale (willing seller + willing buyer, neither acting under compulsion.]
revenge of the anti-stagers?
With yesterday’s terrific New York Times article about staging (Ruthless Came the Stager; check the comments for some [amusing?] people who don’t ‘get’ staging, many of whom think that staging is [merely] ‘neutering’) still very much on my mind (Note To Self … continue the discussion in my July 28, ruthless stagers, indeed! NY Times nails story about marketing apartments (and lofts!)), it is perhaps significant that the loft did not sell well fully furnished and only sold (really) well when it was all but an empty shell. Of course, that’s weird, too.
Empty lofts (probably even more than empty apartments) are not supposed to present well. The two interior photos for the oh-so-successful sale (to market April 23 at $2.8mm, in contract by May 10 at $3.05mm) make it hard to appreciate how big the thing is, and make it plain how primitive the space is (even the kitchen, viewed only at a tough angle). Perhaps the message is that a gut job loft is more easily sold as a floor plan, with an in-person visit needed only to get a sense of the light and ‘volume’.
When it was marketed for a long time in 2011 it was no less a project, but furnished. Did the furniture make it harder to understand??
That full history in 2011, which lead to a (technically) successful result:
|Dec 21, 2010||bought from sponsor||$1,438,003|
|Jan 8, 2011||new to market||$2.995mm|
|Sept 2||change firm||$2.5mm|
|Jan 3, 2012||sold||$2.455mm|
If all you knew about this loft ended there, you would say this was a very successful campaign that just took a while (and two firms) to find the market. Granted, the late 2011 floor plan makes no sense (step off the elevator into the second bedroom? room dimensions are … off) but it is obvious that you are going to blow the whole thing up anyway. Selling a total gut job at $960/ft seems reasonable.
But for that buyer to find another set of buyers within 5 months at $1,193/ft … changes the narrative to an alarming degree. I am only going to say it one more time, then end quickly: this sequence cannot be rationally explained.
Somebody just paid $3.05mm for the exact same loft they could have bought at $2.5mm less than a year earlier. Worse, for an Efficient Market Theorist, some other bidder forced them to pay 9% more than the asking price, so there were at least two sets of buyers who missed the 2011 opportunity.