backstory to New York Times about buying a wrecked loft at 37 Walker Street

Manhattan Loft Guy readers (again) keeping ahead of the Times …
Nice piece by Constance Rosenblum as the main story in the Real Estate section in today’s New York Times, Not Too Shabby, about Manhattan residential real estate buyers increasingly looking for ‘projects’ to buy, then upgrade, renovate, or gut. The last of three buyer profiles is the guy who bought the loft featured in my January 3, walking up is hard to do: primitive loft at 37 Walker Street sells with 4 flights of stairs down 5% since 2006, sorta, so attentive readers of this blog probably recognized the story (and the loft).

Rosenblum got her information, presumably, from the agent and the new owner; this is a mix of Truth and Other:

he bought a 2,400-square-foot two-level loft in TriBeCa atop 37 Walker Street, an 1860s factory where straw hats were once made. The loft looks much as it did in the ‘70s, which is why Mr. Sorenson was so charmed by it. The spaces are almost entirely open, and on the top floor, shafts of sunlight stream through dusty eight-foot-high arched windows, edged with rotting sills.

The new guy has a surprisingly modest plan for a 1970s vintage loft:

He … estimates that renovation will cost several hundred thousand dollars, largely for such big-ticket improvements as new wiring to allow central air. But except for erecting walls to create bedrooms for his two children … he doesn’t plan to do much, even as regards the kitchen, now equipped with what Mr. Sorenson’s broker … described as “burners like the ones you use in the woods.”

As Mr. Sorenson summed up his plans, “I don’t want it to look like a kitchen, just like I moved in some appliances.” And he intends to leave the floors just as they are — oak planks scarred with a century and a half of hard use covered with multiple coats of worn white paint.

“Doesn’t plan to do much”?? That’s weird, and I doubt it ends up that way, even with the guy’s high level of confidence in himself and his team. If he really does intend that the place, when he is done, “will be killer”, he is going to do more than upgrade wiring, add central air, and build two bedrooms.

First off, there are now only 1.5 bathrooms. With 2 part-time kids, not too mention, two levels, I find it hard to believe (a) that he is not going to have at least one full bath on each floor, and (b) that he is not going to gut the current plumbing facilities. (Have you ever seen what 1970s vintage bathrooms look like in an 1860s loft? Hint: given the otherwise [very] primitive ‘design’ ethic, these were installed for utility, not aesthetics, back in the day. Another hint: if the kitchen has “burners like the ones you use in the woods”, you’d expect the bath facilities to match, right?)

Second, he’s got some spare plumbing stacks to work with, given that the space now has 2 kitchens (see the link to the listing in that January 3 post).

I can’t figure out what his plans for the kitchen entail. On the one hand, “not much”, but what is the alternative to “I don’t want it to look like a kitchen”? And what does the segue from that comment to “… just like I moved in some appliances”?? There was no floor plan in the listing (as sometimes happens with loft sold as total gut jobs), but kitchens of this era often looked as though … how to put it? … like people “just moved in some appliances”. Stringing a refrigerator, stove, dishwasher (sometimes!), and sink along a wall near a bathroom. The top floor kitchen might flue to the roof, allowing for a range hood and (eventually) a heavy-duty range.

But seriously: what could “I don’t want it to look like a kitchen” mean?

two very different floors
Rosenblum notes that the loft has two levels. I wonder if she has seen it. (A Times photographer has, as the big above-the-fold photo is the new guy, looking stylish and wearing a hat in this former hat factory, in front of one of his peeling walls, with vintage electrical and plumbing lines.) The photo that has the “oak planks scarred with a century and a half of hard use covered with multiple coats of worn white paint” is the lower floor; the upper floor looks very different. That floor (apparently unlike the one below) is described by Rosenblum as having “shafts of sunlight stream through dusty eight-foot-high arched windows, edged with rotting sills”. That floor, as shown clearly in the first two listing photos, does not have 150 year old floors (at least, not on top).

If you fell in love with the scarred oak planks on the lower floor, you are likely to do something about the  (1980s?) flooring added on the top floor. Much more than “not much”, I would think. You’d start by hoping that the new flooring was put down on top of old floor that was deemed (in the fashion of the [minimal] renovation by the previous owners) too damaged, and that there is some significant amount of old flooring that can be restored to its ‘scarred’ condition. Or you might try to replicate the old flooring, at least in getting similar size boards running in that front-to-back manner.

does everyone lie about their feet?
Rosenblum says the loft is “2,400-square-foot”, which is “Other” rather than Truth. Presumably that was the new owner talking, as the listing description says “over 2000 square feet” and StreetEasy has it at “2,191 sq ft”. If find that … amusing.

The good news is that his budget (“he … estimates that renovation will cost several hundred thousand dollars”) will go a little further in 2,191 sq ft than in 2,400 sq ft. The bad news for his budget is that, despite his resolve to do “not much”, he’s got some big ticket items in addition to the new wiring and central air mentioned. For one, getting (at least) two modern bathrooms to replace the no doubt very primitive current 1.5. For two, remember those “dusty eight-foot-high arched windows, edged with rotting sills”? There are 12 of them, 3 each at each end of each floor.

For three, look again at the lovely huge photo on the front page of the Real Estate section, with the peeling walls, and recall that the “loft looks much as it did in the ‘70s”. Nothing quite screams Lead Paint as loud as peeling walls from the 1970s. Unless it is “oak planks scarred with a century and a half of hard use covered with multiple coats of worn white paint”. The guy’s got two kids; maybe he simply seals the “worn white paint” floors, but I suspect he’s going to have a big budget line for scraping and sealing something like 300 linear feet of brick work.

If by a “renovation [that] will cost several hundred thousand dollars”, the new owner means $400,000, he’s got $183/ft to work with. Maybe that great team he’s got come to him inexpensively, as “his” team. But I don’t see a lot of room at $183/ft when you know you need to re-do the wiring, add central air, replace 12 large window frames, do something about the upstairs floor, and (something, something, something; there’s always an unexpected “something”). He’s done it before, and he’s actually budgeted the space, so maybe he is right that this is “bulletproof”.

“I’ve done this over and over,” he added. “I have the plan, the time and a great team, so the project’s bulletproof. I know how to do it. When I’m done, this place will be killer.”

Oh, how I would love to see After photos!

a word about value
New York Times readers will be forgiven for believing that one could buy a wreck of a loft in Tribeca for $667/ft, as that is what Rosenblum presents this buyer on the top of 37 Walker Street as having done. But you know the actual price per foot is $730/ft, because you know how large the loft (officially) is. What you don’t know, unless you read my January 3 post closely (or the headline, at all), is that this duplex loft is the 5th and 6th floor of a building with no elevator. You should not expect to buy even a wreck of a Tribeca loft at $730/ft; this loft has been discounted for stairs and (probably) for location (this block of Walker Street is more convenient for subways than much of Tribeca, but is not a prime block by any stretch). Rosenblum is not writing so much about ‘value’ as she is about opportunity, yet it is a little surprising that a key fact about the loft escapes mention.

some fancy dancing about agency disclosures, I assume
Did you see Rosenblum’s reference to “Mr. Sorenson’s broker”? Interesting, and possibly not accurate, but Rosenblum got that impression from someone. Did you also note the buyer’s strategic concern on first seeing the loft?

“The moment I saw the place, I knew it would work … I had to mask my enthusiasm so I could negotiate the price.”

If you looked closely at the listing description, you saw that the sellers’ agent was … (wait for it) … the guy named as “Mr. Sorenson’s broker”. So, if Rosenblum is correct, the agent from whom the new owner had to mask his enthusiasm was … his own agent. That’s weird, and possible to do, but it involves some fancy dancy and some special paperwork.

If Rosenblum is right, then this is what should have happened: when the buyer first came to the loft (if not before), the sellers’ agent would have advised the buyer that the agent represented the sellers; for the agent to “represent” both the sellers and the buyer, he’d have to get informed consent from both, and each would have to sign an acknowledgement that the agent, in essence, would give neither of them advice but would be a faithful messenger between them. (I have beaten on this agency disclosure drum before; see my May 16, 2012, the Warburg guy wants to take the Dual out of Agency in Manhattan residential real estate, for an overview, including the head of the Warburg’s reasons for thinking this is a bad choice for sellers and for buyers; hint: here is his key question, as president of his firm: “So how could my agent be fair to both sides?”.)

Let me be clear: I am not saying that the agent did anything wrong. I am saying that there is a perfectly legal way for him to (not really) “represent” the buyer and the sellers, but that the paperwork (and, more importantly, the conversations in which informed consent is requested and given) has to be done carefully. I assume that is the case in this instance. With a buyer who immediately realizes he needs to hide his enthusiasm from the sellers (and “their” agent), this would have to be especially carefully done.

© Sandy Mattingly 2013