85 Leonard Street loft doesn't quite zoom, but sells above ask


nearly $2mm gain in 4 years

The “2,434 sq ft” Manhattan loft on the 4th floor at 85 Leonard Street (the condo name, Kitchen, Montross & Wilcox Store, is a mouthful, explained below) enjoyed an enviable but hardly unique experience of selling above ask this month, though it did take some time. I think this limb will be strong enough to hold me: I believe this sale completes the single largest gain on resale in my Master List of Manhattan Lofts Sold Since November 2008, which is both enviable and (likely) unique. Let’s start in the present and work back.


a very specific floor plan, in classic form

The full floor loft is a classic Long-and-Narrow, with the classic floor plan to match: 2 bedrooms split the rear wall, windows only front (3, huge) and back (3, modest), plumbing on both sides in the middle permitting the bedrooms to be en suite and a half bath opposite the kitchen, with enough length to add a large closet on one long wall in the middle and a “study/[small!] interior 3rd bedroom” opposite. (When I say the “study/[small!] interior 3rd bedroom” is small, I mean smaller than the master bath; the placement of the plumbing on both long walls optimizes this loft as 2-bedroom+small!-study, rather than permitting a 3-bedroom layout; remember, the 2 full baths are en suite.)


Ceiling heights are given, unhelpfully, only as “tall” and “impressive”, which I estimate to be synonyms for “under 11 feet” in this case. The light is “magnificent” and the rest of the broker babble is long on modifiers but short on detail:


gut renovated loft: the grand entertaining/living space with a fireplace abuts a sleek kitchen with Viking and Bosch appliances, stone counters and refined smokey wood cabinetry. A gallery leads to the study/interior 3rd bedroom, a laundry room (with full size LG washer and dryer and a sink, with an abundance of storage, and an elegant powder room. The Master Suite features a large walk in closet and a sumptuous en suite bathroom with a large shower stall and free-standing sculptural soaking tub. An additional bedroom suite completes the picture. Ducted central air-conditioning, tall ceilings and hardwood floors


Maybe it was the holiday season, but the marketing campaign was relatively long for being so successful: to market  with turkey hangover on November 30 at $2.95mm, then not in contract until the champagne hangover wore off on January 11, finally closed (with a StreetEasy mismatch) on April 1 at $3.16mm. Ignoring the storage room that came with the loft, that’s $1,298/ft for a condo in a magnificent building that, although fairly babbled as “surrounded by the best Tribeca retail, restaurants and transportation” is hardly prime Tribeca.


old gut, new glory

Reading between babbling lines can be tricky, but note the word about timing missing from this bit: “this gut renovated loft…”. In a new condo development in which sales did not close until 2009 (StreetEasy building page, here), the “gut renovation” almost certainly refers to the sponsor’s work, as anything done by the recent seller would likely be promoted as “recently” or “newly” renovated, or with elements such as “brand new [kitchen, etc]”. There’s no detailed listing description from the sponsor’s marketing anywhere I can see on the intertubes, but the original new development floor plan for the 4th floor survives in our listing system, with the same telltale angles in the recent floor plan (bedroom doorways, zig-zagged bedroom walls, even the master tub) were in the developer’s floor plan.


But for that, and for the fact that our listing system has the developer’s marketing prices for the 4th floor, I’d be tempted to think that the loft had not been “gut” renovated when it was bought at this ridiculous price by the recent seller: $1,289,783, on December 8, 2009. Let me repeat that ridiculous price, slowly: one million two hundred eighty-nine thousand seven hundred and eighty-three dollars. Had the sponsor intended to sell at a ridiculous price, or offered a white box or raw space, the long, sad and sparse details would not look like this (from our system):


Aug 20, 2007 new to market $3.4mm
May 2, 2008   $2.95mm
April 6, 2009   $2.65mm


There is a similar (incomplete) scale to the part of the 2nd floor marketing campaign that survives on StreetEasy:


Nov 7, 2007 new to market* $2.95mm
Jan 17, 2008   $2.75mm
July 21 contract  
Jan 21, 2009 sold $2.225mm


(*Our listing system has an earlier start to the 2nd floor campaign, consistent with the 4th floor: August 2, 2007 at $3.2mm.)


Thus, there is no reasonable doubt that the developer was selling gut renovated lofts beginning in 2007 (rather, lofts that were not finished in gut renovated condition until late 2008 or 2009).


There is also no doubt that this developer got creamed. Instead of selling the 4th floor at $3.4mm as soon as work was done to get a Temporary Certificate of Occupancy, the developer received $1,289,783 on December 8, 2009; instead of selling the 2nd floor at $3.2mm, $2.25mm on January 21, 2009. StreetEasy has the first floor unit (which included the basement and a mezzanine, totalling perhaps “7,000 sq ft”) selling on October 27, 2009 at $2.67mm, the 3rd floor not going until March 1, 2010 at $2mm, and the top floor (with rooftop addition and outdoor space) not going until May 21, 2010 at $4,276,285.


can’t blame the carpenters for everything

These sales are obviously well below expectations, and timed about as poorly as they could be timed. As far as expectations are concerned, the 2nd floor history tells you that the developer was way too optimistic, even for Peak market, needing to drop from $3.2mm to $2.95mm and to $2.75mm before biting a half million dollar bullet to get a contract in July 2008 (still two months before Lehman’s bankruptcy). That summer represented the last best chance, in retrospect of course, to take the (most) money and run. But the January 2009 first closing tells us that the developer was not done … er … developing the building in time.


Whether bad luck, bad pricing (certainly, in part), or bad (delayed) work, the results were disastrous. Net proceeds from the 5 sales: $12,061,468. StreetEasy has what they paid to buy the building in December 2005 ($11,003,955). Do you think it cost more than a million dollars to (a) carry the project from December 2005 to May 2010, and (b) to gut renovate as much as 18,000 sq ft, and (c) to pay 5% sales fees on the 5 (eventual) sales? That last piece is the easiest to ballpark and, likely, the smallest piece; but $600,000 in commissions goes a long way in starting this project down a deeply red path.


My. Oh. My.


in which we learn about sperm candle columns

To end on a happier note than a developer bath, the “tansplanted Buckeye” who had the smarts to “never stop[] being a tourist” after 30+ years here and the pen to write a lovely blog has an extended piece about the building, published on June 3, 2011. I highly recommend the piece, as it layers architecture, history (a clerk with silk-lined pockets!), and culture about this building and this block in Tribeca, and I highly recommend the blog, Daytonian In New York. (Note to Self … add to blog roll.) New York needs more “tourists” like this.


The history of 85 Leonard Street provided by Mr. Miller reminds me about one under-appreciated (subtle?) element in very old loft buildings converted to residential use: the importance of elevator placement. Buildings as old as the Kitchen, Montross & Wilcox Store (begun in 1860) predate elevators; if an intervening commercial owner put one in, they are often in the least expensive and most commercially efficient location, which happens to be the worst placement for residential use.


You know what I mean. The worst examples put the elevator at the front facade, usually taking up one front window line, and often (when installed, at least) opening directly onto the sidewalk. (Thus, the ubiquitous “Shaftway” signs you see up the front of loft buildings of a certain age, warning firefighters that there is no floor behind those “windows”.) That elevator placement is great for a commercial user to load and unload from sidewalk directly up into their space, but awful for later residential owners, who lose a window (often 1 of only 3) and width in the front of the loft.


I don’t know when the elevator was installed at 85 Leonard Street, but it is placed so as to optimize residential use, at the cost of some first floor space for a proper lobby. As you see on the 4th floor plan, it is tucked behind the public stairway, opposite the kitchen, in the long middle of the loft in which various utilities line each long side. This is the kind of thing a new residential conversion can accomplish, in a building not previously provided with elevator service.


That’s a happy note! One to quit on….


© Sandy Mattingly 2013


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