curiously modest pricing of no-expense-spared renovated loft at 66 Leonard Street nets (predictably?) modest price

if they were trying to provoke a war, they missed
I have to wonder if the sellers of the “1,780 sq ft” Manhattan loft #12D at 66 Leonard Street (the Textile Building) thought they were going to provoke a bidding war, or if they have a lot more respect for the risks of Peak Pricing than I might. After all, after buying very close to The Peak, they took a loft in successful 2000 new development condition and did a “no expense spared” renovation; yet having paid $2.4mm on July 16, 2008 plus those “no expense spared” expenses in the 2009 renovation, they asked (only) $2.3mm when coming to market on February 15 this year.

That is not putting much faith in one of the longer litanies of proper proper names for brands and materials that you have seen recently in broker babble for any Manhattan loft this year (my bolds for the proper propers):

architect-designed complete upgrade of yet higher quality than the original development from 2000 was carried out in 2009. No expense spared. … gas fireplace, with new slate surround … new recessed lighting is Lytepoints by Lightolier.The open chefs kitchen has stainless steel appliances, slate dark grey stone counters by Caesarstone, imported beech wood custom cabinets, glass tile backsplash by Mirage, Subzero refrigerator and a 36-inch wide counter depth 5-burner gas range and Karbon articulating faucet by Kohler. … kitchen … Lytecaster down lights by Lightolier…. upgraded en suite baths. …master … bathroom with sink by Lacava, wall-mounted sink faucets by Dornbracht, anti fog backlit mirror / light by Aamsco Lighting and a giant sized stall shower with shower system, handshower, showerhead and trims by Dornbracht and shower bench by Hoesch. Floor by Lea Ceramiche. Walls by Mirage.The second bathroom enjoys deep soaking tub, and a shower system by Hansgrohe, … whole apartment has dark oak floors and window sills made of "White ice", quartz by Countrywide Stone.

The campaign was successful in that it got a contract within 7 weeks at a nominal discount from ask ($2.275mm, a 1% discount), but my first thought was that there is something off about this ….

If I had “spared no expense” after paying $2.4mm, I would be very tempted to find out what The Market thought about the value I had added in that renovation, adjusted for the difference in market conditions, July 2008 to now. Why not start at $2.4mm, offering the (reasonable) theory that the renovation offset the change in market?

direct competition is a sobering thing
That was my thinking when looking at #12D in isolation. Wrong! Each building with recent history is a micro-market for Manhattan loft pricing, ignored at your peril.

When #12D came to market on February 15 at $2.3mm, loft #9D was then being offered for sale at a thrice discounted ask of $2.275mm (after starting at $2.45mm 7 months earlier). Loft #9D was in 2000 era condition, while the #12D sellers had, of course, “spared no expense”. As a #12D seller, I would still be tempted to push the value of the 2009 renovation, but I would see the #9D offering at only $25,000 less than my #12D asking price as a way to use #9D to sell #12D (even though #9D had not yet found a buyer).

And I would be tempted to bank, instead, on the then-brand new contract for the “2,366 sq ft” loft #9A at $1,366/ft. That one is larger than either #9D or #12D, with an extra bedroom and bath, but it went into contract on February 9 off an asking price of $3.25mm ($1,374/ft). (The StreetEasy deed records have #9D at “1,877 sq ft” and #12D at “1,780 sq ft”, with the difference in the #9D and #12D floor plans being a #9D master bedroom that is 4’6” longer [x 14’2” wide].)

Pushing the ask for #12D to (only) $1,374/ft (#9A was also in 2000-era condition) would suggest an ask of $2.446mm for #12D, just a tad above the last (near Peak) sale of #12D in 2000-era condition.

But the #12D sellers were more prudent than I might have been, pricing essentially at the $/ft of the #9A contract and just a little above the unadjusted price of the unimproved #9D, which by then had been offered for 7 months. Can’t argue with their success: again, with #9A newly in contract and #9D still hanging out in the market, #12D got a contract at a 1% discount in 7 weeks.

It can be fun to second guess. With no risk! Thanks for playing.

© Sandy Mattingly 2012