foreclosure auction tomorrow for 25 N. Moore Street celebrity loft (UPDATED w result)

got bucks?
Not my metier, but I suppose that everyone who pays attention to the hip-hop world has been aware that Damon Dash has been in severe financial difficulties for a few years. (See this overview from The Atlanta Post March 16.) So the fact that his duplex loft #3A/4A at The Atalanta, 25 N. Moore Street is up for a foreclosure auction tomorrow at 1 PM is not so much a real estate story as a general business story:

• Guy buys loft in 2004 for $3.875mm;
• Guy refinances loft in 2006 for $7.3mm;
• Guy has falling out with Jay Z, and business falls to pieces;
• Guy stops paying mortgage (about $78,000/mo) and common charges (about $2,300/mo), so bank files lis pendens (August 2008) and condo files lien (January 2009);
• nothing gets better (or resolved), so the bank secures a judgment March 1, 2010 for $8,960,752, and schedules an auction for July 28.

Hard to imagine that even the bank will come out very well here.

the real estate news
The Guy did try to sell the loft in 2008 and 2009. There is a surviving StreetEasy listing from 2008 with listing history details that conflict with the inter-firm data-base, but that at least informs that that duplex loft is "5,142 sq ft" set up as 4 bedrooms + 4 baths, with 20 foot ceilings in the living room, and that the Guy had been asking $7.9mm.

The inter-firm data-base shows that he was only on the market from January into April 2008 before taking it off the market until November 2008 (after the bank lis pendens and common charge defaults), at which point he aggressively dropped the price through the winter:

Hindsight (that female dog!) reveals the timing error. If it was ever going to sell at a top price it would have been before the September 2008 bankruptcy filing by Lehman and the subsequent nuclear winter for Manhattan real estate. But the Guy sat off the market from May into November 2008 and only came back when he had to (presumably). Even then, he had no luck.

what might have been
The neighbors in the duplex loft #3C/4C had a pretty easy time of it when they came to market in June 2008, as they found a contract within 6 weeks and closed on October 1, 2008 at $4.6mm. At "3,419 sq ft" the scale of this duplex loft is different than #3A/4A with "5,142 sq ft", but #3A/4A has 3 bedrooms + 3 baths and that same high ceiling in the living room. While there is no necessary linear relationship between the values of these two lofts, the fact that #3C/4C got $1,345/ft while #3A/4A sat off the market suggests that the Guy might have gotten around $6.9mm before Lehman.

Maybe he was stubborn, in the same way the rest of his financial world went into the toilet; or maybe he didn’t have any flexibility (because of the mortgage and his other creditors). Regardless, that delay cost the Guy and his mortgage holder a lot of money.

The only two lofts to sell in The Atalanta since then have been #12B ("2,150 sq ft" on August 20, 2009 at $1,159/ft) and the #8BC combo ("4,035 sq ft" on November 30, 2009 at $1,271/ft). By the time the earlier of these two lofts went to contract (#8BC in May 2009), the desperate #3A/4A sellers were all the way down to $1,118/ft, with no sale. Indeed, the #8BC listing history shows a high level of motivation, channeled appropriately, and a very different market reaction.

Check out this velocity and final discount for #8BC:

The Market is not fair
Our listing history shows that #3A/4A sat at that $5.75mm price from June 2009 into December, when a contract was signed … but that contract obviously never closed.

Perhaps there was only one $5+mm buyer for The Atalanta in 2009. Perhaps the simplex "4,035 sq ft" layout of #8BC was a significantly more valuable space than the duplex"5,142 sq ft" layout of #3A/4A. Perhaps #3A/4A was stigmatized by the bank lis pendens and the condo lien by 2009.

But look at the overlap in 2009 marketing of these two lofts, up until the #8BC contract on May 18:

paging the Smothers Brothers
Not fair at all. At $1,271/ft, #3A/4A should have sold around that same time around $6.5mm. Instead, it languished $750,000 below that, and is set for auction tomorrow.

auction details
The auction is scheduled for 1 PM tomorrow at the New York County Courthouse, 60 Centre Street, Room 130, before referee Jay Stuart Dankberg. More information from the bank’s lawyers at 212.661.2900. Bring a big check. Certified. [UPDATE: Curbed has the link for the auction notice; and a link to this post; THX Curbed!]

[UPDATE JULY 28: The Real Deal has tweeted that #3A/4A sold at auction for $5.5mm ($1,070/ft). h/t Curbed]

© Sandy Mattingly 2010