a conventional story downtown Manhattan, enhanced by beautiful renovation work
I need to bring some balance, some rationality, to my consideration of loft renovation projects in Tribeca. Steven Soderbergh’s devil-may-care attitude is driving me a little crazy today (yesterday’s post, 155 Franklin Street loft sells in a reverse flip (viewer discretion is advised), has gone through several updates today, and has spawned many tweets, a Facebook spin on my Manhattan Loft Guy business page, and even a quick hit on my LinkedIn page about how he’s ruining rational market analysis by not being, you know, [economically] rational). With that as background, I am thrilled to have the recent sale of the “2,060 sq ft” Manhattan loft #2B at 366 Broadway (Collect Pond House) to chew on.
Folks did everything right: they bought as The Market should have been well into The Thaw, at what seems like a still-deeply discounted price ($1.17mm on November 25, 2009); they had the taste and good fortune to hire a quality team to do a lovely renovation; and they just sold at a significant premium to comps in the building, evidently pocketing a lot of ‘extra’ money, beyond what they’d invested or could expect from passage of time ($3.101mm on January 29). Let’s get the drooling out of the way first….
hard to do better with a second-floor no-view loft
The post-renovation floor plan is less inspired than efficient, and mirrors other lofts in this line in this building that I have seen over the years:
You’ve got two moderately sized bedrooms, additional utility from the office-with-Murphy, multiple plumbing stacks allowing widely separated baths, plus a laundry room behind the kitchen, and a master ‘dressing room’ that deals with the funky angles caused by the bend in the building’s public hallway.
The fun stuff is in the details, of course, of course, which actually look better than they read:
light-filled space features 12.5 ceilings, restored crown and base moldings, 7.5 wide-plank European white oak floors, central AC, custom built-ins, and southern exposures … new 10 double-hung windows. …. Modern chefs kitchen boasts 48 Bertazzoni range, Caesarstone counters, tile backsplash and abundance of storage. Spacious master suite includes dressing room and luxurious 5-fixture bath. Baths have radiant-heated floors and are beautifully finished. Fabulous private laundry room.
I especially like the kitchen, with a white that often feels cold but in this rendering does not (is it the tone of the flooring that warms it?):
The living room is warmer still:
I especially like the radiators (are they custom at this height?), but everything works. I’m not the only one who appreciates this renovation:
|Sept 8, 2014||new to market||$2.75mm|
|Jan 29, 2015||sold||$3.101mm|
how extensive was the renovation?
The floor plan and listing photos from 2009 show a loft that is superficially the same (shape and array of rooms) but radically different.
The 2009 broker babble oozed potential (“flexible enough for many other layouts”) and necessity (“has not been on the market for over 30 years”). I usually prefer wood-frame windows that look like wood-frame windows, but the current white looks an improvement over this:
The new floor plan recaptured for the living room a fourth window (behind the left wall in 2009), a much more efficient use of space, giving the living room more volume even with the kitchen moving forward.
In principle, I prefer lofts that retain original elements, like that mosaic flooring (an element that has to force visitors to ask about it). But the new loft, with new flooring, and a tweaked array is a fully integrated and significant improvement. The $64,000 question is what did all this good stuff cost?
let’s play with numbers in the ballpark
Without access to their budget details, we can only guesstimate how much value the lovely renovators added to the loft, above their Cost + Renovation, Adjusted For Time. But that uncertainty never stopped me before ….
At “2,060 sq ft” and every one of those feet redone, I’m guessing these folks spent $600,000 to $700,000 in 2009, with the real number more likely to be lower than that range than higher. Let’s add that upper limit to their purchase, then adjust for time, with the single number proxy for the overall Manhattan residential real estate market (aka the StreetEasy Condo Index) up 37% from purchase in November 2009 and sale more than 5 years later.
$1.17mm (purchase cost)
$700,000 (estimated renovation)
$673,200 (timing adjustment of 36%)
$2,543,200 (projected current value)
In ballpark terms, we’ve just estimated what the loft would have been worth in the current market based on a series of reasonable assumptions: (a) if the November 2009 purchase was a true ‘market price’; (b) if the StreetEasy Index is a reasonable proxy for changes in the market; (c) if the renovation had really cost $700,000 [$340/ft]; and (d) generated a dollar of market value for every dollar spent. These assumptions seem pretty reasonable to me, but note how big the spread is between the nominal $2.5mm or so and the observed $3.1mm or so.
My strongly held working assumption is that these folks generated quite a bit of ‘extra’ value by renovating so well.
the neighbors must be jealous
The last two public sales at Collect Pond House strongly support this conclusion, while the last private sale is … interesting. Let’s start at the top, with the different shaped but
similarly sized [update, see BG comment below] smaller penthouse loft #12C, which sold five months before #2B. That one was babbled very enthusiastically:
Beautifully renovated, this loft boasts an open chef’s kitchen with Carrera marble slab counter tops, pro-grade appliances from Sub-zero, Viking and Miele, custom cabinetry and wine storage. The bathrooms are finished in Waterworks tiles and fixtures, and both have skylights. Other details include high ceilings, a gas fireplace, oversized arched windows, central air, walk in closet, Washer/Dryer, sound system and home security system.
And it boasts two (three?) things that are generally treated as major (expensive) elements that #2B lacks: “unrivaled light[,] unobstructed views”, and “approximately 1200 square feet of landscaped multilevel rooftop entertaining space”. Frankly, this one as a comp really confuses me, as it should have sold much higher than #2B, even allowing for timing differences, because of the (seemingly) equal condition, much better light, much better view, and those “1,200 sq ft” outdoors. Yet, it sold for (only) $2.6mm. [see below]
More recently, the #2D duplex sold five week before loft #2B. There’s no significant timing adjustment to make, but that one is larger (“2,849 sq ft”) and in pre-renovation condition (your basic “[b]ring your architect and design your dream home in Tribeca” special project). [Reader BG thinks the light is much worse on #2D’s alley.] That one sold slightly above ask at $2.924mm, or $1,026/ft. Compare that to the post-renovation price of the smaller #2B ($1,505/ft). No way that #2D would cost $479/ft to bring it up to the quality of #2B.
Private sales are impossible to comp, as we lack information not only about the condition of the loft when sold, but we have no way to tell how arm’s length the deal was. Loft #4B just sold for a tad more than loft #2B. I wonder how they arrived at that price.
The recent #2B sellers did not renovate in order to sell; they renovated in order to enjoy the space (assuming they did it right after buying, of course). They very likely enjoyed it a lot, as it is a beautiful loft. The fact that they generated so much value was, no doubt, heartening, but not the point.
Congratulations to them. It helps to wash some of the Steven Soderbergh backwash out of my mouth.