did the unique buyer get played in 90 Franklin Street loft sale?

unless it was the drop dead views
When the “1,895 sq ft” Manhattan loft #10N at 90 Franklin Street came to market on September 13 for $2.6mm that asking price of $1,372/ft could have been considered rather … errr … aggressive, given that the then-most recent sales were (a) rather lower, and (b) running into The Peak: at $1,253/ft (#3S, on October 4, 2007) and $1,094/ft (#2N, on August 8, 2007). Granted, these were low floor units, and #10N was billed as including “drop dead views”, but still….

I wonder if the sellers were surprised to get a contract within 3 weeks, though I have no doubt they were thrilled at the velocity and the price: #10N (eventually) closed at $2.475mm on April 8. That’s $1,306/ft, still rather dramatically higher than the running-into-The-Peak sales in August 2007.

did the neighbors talk much?
One of the favorite Manhattan Loft Guy themes, regular readers know, is the dynamic of one neighbor selling a unique property to another neighbor, a property so unique that it shares a wall, floor or ceiling with the buyer’s existing loft. I have gone so far as to label some of these transactions “extortion”, a very rough word to use between neighbors, but one that is sometimes implied by the pricing. In some case, these neighbor-on-neighbor sales were entirely private, never having been offered to the general public; in at least one case I can recall but cannot now specify (arggghhh) it was the buyer who seems to have ‘taken advantage’ of the seller, who had been on the market for a long time before being rescued by the neighbor. That is not the case at 90 Franklin Street.

Loft #10N was presented to public for almost three weeks at $2.6mm before the neighbor next door scooped it up at $2.475mm. I wonder if the buyers knew the sellers were planning to sell beforehand, or if they acted quickly in response to the opportunity to expand their domain. If this was planned in advance, I wonder if the sellers said something like “happy to sell it to you, but we want to test the market first”. Guess work is, after all, just guessing, but that scenario is consistent with the apparent premium paid and with timing of the contract; it is also consistent with a very unusual bit of post-contract timing: it took a really long time from the contract (October 1) to the closing (April 8), especially given that 9 90 Franklin Street is a condominium.

Going back to (guess) work, that looks to me like a deal that was hastily arranged that included, in exchange for a premium price, extraordinary flexibility by a seller in extending the closing date. (To show how dangerous [unreliable?] guesswork is, it is possible that the extended close was for the benefit of the buyer, but that scenario is unlikely to involve premium pricing.)

testing the premium hypothesis
This analysis is premised on the #10N sale being a premium to The Market, obviously. On timing alone, the case is strong, given the two sales just two quarters shy of The Peak at 16% and 4% lower, on a price-per-foot basis. To me, it is so obvious that the “drop dead view” is not an equalizer for the different market conditions that I am not going to bother to further justify that conclusion … except with this not-quite-conclusive datum: when the 12th floor sold on May 27, 2007, it was a very different animal at “5,027 sq ft”, though with better views. That sale was one quarter more removed from The Peak than #3S and #2N, but The Market for this huge loft with “drop dead-er views” was (only) $1,258/ft. So I am quite comfortable that the view does not justify the premium. Does the condition?

#10N was billed as in “mint condition”, though without a lot of detail or enthusiasm in the broker babble. But the conversion dates from only 2000, so most lofts here should be in mint condition. By comparison, #2N was billed as “absolutely stunning” and #3S as “[f]abulously chic”. Does the condition? No.

Finally, a note about how much fun each of the sellers of #10N have had over the years.

everybody wins! (so far)
The sales history for this loft had many people smiling, starting with the original buyers from the sponsor who was only in it for the money, not the views, or to live there:

• Mar 10, 2000 $1,013,500
• May 31, 2000 $1,550,000
• Sept 27, 2004 $1,880,000
• April 8, 2011 $2,475,000

So far, that is win, win, win! I don’t think the next seller will have a similar experience, given the dear transaction just concluded. Time will tell …

© Sandy Mattingly 2011