elevator does not go to top floor at 258 Broadway, penthouse loft sells anyway (eventually, eventually)

 
how do you comp a one-flight-up penthouse?
There are penthouses, and then there are penthouses. My understanding is that the term originally referred to a residential unit built on the roof, usually having direct (private) access to at least part of the roof, and usually added on rather than part of original building construction. Of course, in the Real Estate Industrial Complex in which all apartments are “rarely offered” if not “unique”, as words tend to be diluted, the term penthouse came to be used for any top floor unit with outdoor space, then to units on upper floors (not just the top most) with outdoor space, then to some upper floor units without outdoor space. Sigh. The “1,800 sq ft” Manhattan loft #9F at 258 Broadway must be an old school penthouse, as to get there I had to take the elevator to the 8th floor, walk down a long winding corridor, then walk up a flight of stairs.

I have seen a few of these in recent years (there’s a building on Broadway in Soho that I can’t quite remember; there’s another on Gramercy Park North, [UPDATE 2.1.13] and the essential Tribeca Citizen reminded me on The Twitter [he’s @TribecaCitizen, I’m @ManhattnLoftGuy. of couse] that there’s one on top of 1 Hudson Street (now in contract; Note to Self: blog that when it closes), but there are not many one-flight-up penthouses out there. It makes for a tough property to comp.

Whether it was the extra flight of stairs or (more likely) the nagging issue of a too-high asking price, this loft with many charms took a long time to sell (omitting a few brief periods of hiatus [hiati??] from this ancient record):

If you’re scoring at home, that’s 2 years to contract after 9 prices using 3 firms. Sold at a 32% discount from original ask, a 7% discount from last ask, and a very funny number clearing price that implies hard bargaining there at the end.

truly, “loft with many charms”
I said it, and I meant it. The floor plan is extremely efficient square with some appendages, fitting 3 decent sized bedrooms and an office, while leaving an open great room that feels bigger than it measures because of the high ceilings, skylights, and windows at two ends. I was surprised by how quiet this loft is, given that the building is at the corner of Broadway at Warren Street, but that is one benefit of being a classic penthouse, set back on the rooftop from the noisy edges. I prefer the large format photos on that ancient listing from 2010, though the last listing has a photo of the terrace from a different angle, showing how open a setback roof terrace can be, even with only an 8-story structure among much taller neighbors.

It’s been well over a year since I’ve seen it, but I recall that the finishes were more “move-in” than “mint”, though not needing upgrading. The rather muted broker babble (3 sets!) is consistent with that memory.

it is tough to comp in a (near) vacuum
When penthouse loft #9F was brought to market at nearly $3 million, there had only been one sale in the building since The Peak of the overall Manhattan residential real estate market. That was loft #2C, which claimed a “1,400 sq ft” footprint and a mezzanine of another “400 sq ft” under the 14 foot ceilings. That sold for $1,000/ft for the open footprint (no rooms on the main level), with very modest babbling (kitchen was “modern”, bath was “renovated”). Figure it was sold as a renovation project.

Penthouse #9F does not need a renovation, has 3 exposures #2C claimed “excellent” light, but is on the second floor, with only a single exposure), and has that 26’x12’4” terrace. Value that terrace at 50% of the value of the interior (new Manhattan Loft Guy readers can find me riffing with The Miler about that here), and we see that #9F started at an adjusted $1,505/ft, a 50% premium to the footprint of the renovation project downstairs that sold 2 months before #9F came to market. That was, according to the cold, cruel market, a significant premium too far.

By the time the sellers changed firms the first time (after 14 months and 4 price drops), the ask was down to an adjusted $1,222/ft, a rather reasonable premium (22%, $222/ft) over the clearing price for the footprint of the renovation project downstairs that, by then, had closed 18 months earlier. But the listing was “tired”, and The Market continued to punish it.

I’d have argued at that time, about a year ago, that the penthouse loft was then priced at or near its market value, based on the (spare) building comp data, the fact that it was a true 3-bedroom at a low price point because being so efficiently fitted in to a small footprint, and because of the rare-for-Tribeca very private terrace. I’d have been wrong, in the factual sense that it took one more firm, 3 more price drops, and 8 more months to find the contract that (finally!) closed at an adjusted $1,027/ft.

can The Market be wrong? (or only in my mind?)
But I would argue, even today and in light of that fact, that The Market unduly punished this loft. The September 2012 market was more deep and stronger than the Spring 2010 market, when #2C found its contract. Yet #9F with all its charms and few deficits (not mint-y and one flight up) cleared at a tiny premium to the condition and floor plan challenged #2C. That’s just wrong!

Using the terrible prism of hindsight, the seller would probably have chosen to flee the cold market in mid 2011, rather than fight that punishing market. I first hit that dilemma in my November 15, 2010, flight or fight? the disappointed seller’s conundrum, 30 East 21 Street and 205 West 19 Street lofts edition, which was a timely post for this seller to have (unfortunately) missed. (Other Manhattan Loft Guy posts on this theme are collected here.)

The decision to sit out The Market for a while is a very hard one for a seller to make, especially a seller that is committed to selling. Every day in a long campaign, the agent and seller believe they are (finally) priced right for then-current conditions; every day they are disappointed. With only a few short breaks, this seller was at it for 103 weeks before getting into contract, a process that was so painstaking at the end that hte negotiation ended with $500.

© Sandy Mattingly 2013