back to 99 Reade Street to see what the low ceilings on 5th floor support

one man’s ceiling is another man’s floor
I had no idea when I hit the recent resale of a 5th floor low-ceilinged loft at 99 Reade Street (September 21, flip city: 99 Reade Street loft sold in 2011 sells again, up 4%) that there was a 6th floor loft sale in the building that was then awaiting deed filing. That shoe dropped when the deed record reflecting the September 5 sale of the “1,528 sq ft” Manhattan loft #6E at 99 Reade Street (Reade Court) was filed this past Thursday. If you remember, the key salient point about the 5th floor of this 15 year old (then) new development is that this residential condo ‘conversion’ is a hybrid: the 1886 5-story structure had three floors added to it, in fact in such a way that the 5th floor (old top floor) ceilings were lowered to support the new construction above. The concept of building new floors on top of old was probably not new in 1994; more recent examples include the 2002 (then) new development, the Keystone Building at 38 Warren Street, and the 2003 Porter House project at 66 Ninth Avenue.

The result at Reade Court is a brand new 6th floor loft set back from the roof line and an irregular terrace on top of the old roof (let’s call that 250 sq ft). The footprint is a classic Long-and-Narrow with plumbing on both sides in the middle and enough width (23’7”) to fit a 15 foot wide master suite and an 8’3” wide second bedroom across the back (north) wall. In addition to windows front and back, there is a side window and doorway in the living room’s southwest corner, out on to the terrace. The original two bedroom floor plan was, to put it in classic broker babble, “architecturally redesigned to create a smaller 3rd Bedroom or home office without sacrificing the open lofty quality of the space”.

Apart from that added “architecturally redesigned” bedroom/office in the southeast corner, it appears that since the last century the loft has a new kitchen (a “mint chef’s kitchen [that] features GE Profile stainless steel appliances, granite counters, custom Italian cabinetry”, to be precise), a “wood-burning fireplace featured in the Italian design magazine Gap Casa in 2005”, surround sound, and two “spa-like baths with sleek designer finishes”.

comping the neighbors starts with an open question of height, alas
For all the Manhattan Loft Guy hoopla about ceilings heights in the 3rd and 5th floors in this building, I am chagrined that the broker babble is silent about the ceiling height of #6E. They do not look that tall to me; judging from the kitchen photo, not much more than 10 feet. (Probably taller than the ceiling in the #5W kitchen photo; definitely a foot or two shorter than the ceiling in the #3W kitchen photo.) That is an unfortunate gap in the public knowledge about loft #6E, because I am trying to understand the relative pricing in the building.

The point of my #5W v. #3W analysis linked to in that September 21 post is that the much higher ceilings account for the greater value on the lower floor ($1,221/ft v. $1,317/ft when both sold in  2011). Now we have #5W having resold this month at $2mm, the day before #6E at $2.115mm. Directly comparing them on a dollar per foot basis requires us to riff over the #6E terrace, of course.

paging Dr. Miller, Dr. Miller, Dr. Miller…
Applying The Miller’s rubric to start with a range of values for outdoor space as from 25% to 50% of the value of the interior space (see, as usual, my ur-post on this topic from May 6, 2010), I would assign this terrace at the lower end of the range. Although it is directly accessible from the living room (a mjor plus on ‘utility’), that (bamboo?) ‘wall’ is hiding (poorly) someone else’s private space or building mechanicals, the view from the terrace is hardly prime, and that very narrow portion in front of the living room is probably not pictured because it is probably neither very usable nor very scenic. Assigning the (roughly) 250 sq ft a value of 25% of the interior gives us an adjusted value for #6E of $1,330/ft (1,528 sq ft + 25% of 250 sq ft = 1,590 sq ft; $2.115mm / 1,590 = $1,330/ft).

That adjusted value for #6E compares to a contemporaneous #5W at $1,269/ft, only a 5% premium and not (perhaps) indicative of more than market noise for two lofts that differ on a highly valued feature (to some), that terrace. That $1,330 adjusted value for #6E also compares to #3W 21 months ago at $1,317/ft, a value that in the current market should probably be goosed a bit and certainly goosed above $1,330/ft. Proving (perhaps!) that the rather higher ceilings on the 3rd floor may even be a premium over twn foot ceilings on the 6th floor.

you can drive yourself crazy with apples to apples, to oranges, to tangerines
I am not thrilled that there is a third loft sale in the building in 2012, because Penthouse W is even less directly comparable to either #6E or #5w than they are to each other. This penthouse is a nightmare for comping purposes, as it has a very different mix of indoor and outdoor space (“1,100 sq ft” interior, “575 sq ft” exterior), with a duplex floor plan that features a double height living room, in part. It is also dramatically different from the other lofts here in the quality of light; it is so short that even the windows in the lower ceiling areas bring terrific light into the entire space on each level.

With 3 bedrooms, there is as much utility in the “1,100 sq ft” interior as in the “1,528 sq ft” #6E, but the sense of volume is different because of the ceiling height and the windows in the penthouse. The two terraces shuld rate at the top of The Miller’s normal range, if not higher, because they are direct;tly accessible from prime living space, they are just about at the top of The Miller’s sense of proper proportion for outdoor space (in a nutshell, that outdoor space in excess 50% of the size of the interior has diminishing incremental value), and they appear to afford vistas not available from the interior.

Let’s ballpark these “575 sq ft” as worth 50% of the interior value. That implies an adjusted value for #PHW of $1,236/ft ($1,715,000 / 1,100 + 50% of 575). That’s disappointingly the low value in the building for 2012, and indicative of limits on this kind ofg ballparking analysis of lofts that will appeal to different sets of buyers.

With that, I will call it a night, after some late Saturday night twists and turns at 99 Reade Street. Did I mention that comping is hard?

© Sandy Mattingly 2012