if you squint long enough, 44 Lispenard Street loft outperformed The Market

playing with numbers in Tribeca … just playin’

StreetEasy is hit-and-miss with past sales history of Manhattan lofts, but with the “1,527 sq ft” loft on the 3rd floor at 44 Lispenard Street (in the original triangle / trapezoid below Canal) we have a multi-step history that goes back to 1998, when this 5-unit cast-iron loft building was converted to condominiums. The same loft that was bought from the sponsor in January 1998 for $458,500 was sold by that first owner in September 2003 for $1.1mm, then resold for $1.7mm in December 2006, and reached $2.3mm when it was sold again last month. Regular readers of Manhattan Loft Guy know how much I rely on the StreetEasy Manhattan Condo Index, which I consider to be the best single number proxy for activity in the overall Manhattan residential real estate market and which goes back to January 1995, so we have an opportunity to take this loft’s history almost all the way back to the start of the StreetEasy Index.

Of course, the StreetEasy Index, as they modestly put it, only

gives you a feel for how the Manhattan Condo Real Estate market performed over the past 15 years. [sic! it’s 20 years since 1995, StreetEasy folks]

The Index can’t be used, without more, to predict what a given loft will be worth in current market conditions based on past sales history, but it is useful tool. Looking at four sales of the 3rd floor loft over the past 17 years, we get a very macro sense of how this loft did in comparison to the overall market.

The more recent sales in the sequence show this loft only modestly outperformed The Market (while the overall market is up 23% from December 2006 to February 2015, the loft’s value increased 35%; from the earlier sale, the overall market is up 78% September 2003 to February 2015, while the loft’s value increased 109%), but the long view skews heavily to over-perform: the Index values tripled from January 1998 to May 2015 (up 203%) but the loft’s sale prices quintupled (not a word I get to use every day) from January 1998 to May 2015 (up 402%).

This is fascinating, or not, depending on your tolerance for market indexes in a non-commodity market such as Manhattan lofts. For me, such a long perspective is for fun, and just a bit of grist for wondering why these values deviate from the Index. Before wandering down that path, let’s consider the merits of this loft at this time.

a challenging Long-and-Narrow footprint, rendered coldly

I can’t put my finger on why, but this loft leaves me cold.

it’s not fair to hold staging against the loft, but …

As a professional, I should be able to look past the decor and finishes to bones pretty easily. We’ve got a nice long brick wall, exposed sprinklers, and high ceilings, with modern touches such as the Boffi kitchen and central air. Yet … I don’t see any character. Maybe it is better in real life, and perhaps it is the rather desultory effort to put some furniture in the space, and some items in the kitchen cabinets that off-puts me, but there’s nothing that excites me here.

The bragging is mostly about the finishes you see in the photo above:

full-floor loft, complete with 12.5ft ceilings direct private keyed elevator, North and South exposures, oversized wood framed windows, hardwood floors, and exposed brick walls, … that old-Tribeca vibe. …  a ducted central A/C and heating system, … a master suite that features Poliform walk-through closets and a Bazzazi tile bath with Kallista whirlpool tub, separate glass shower, Grohe fixtures and a custom double vanity.

… build-in [sic] speakers throughout. … ceilings are double layered for sound insulation.

… open Boffi Kitchen with Sub-Zero fridge, Meile dishwasher, Thermador range and Grohe/Franke sink.

No photos of the Poliform closets or the master bath with the proper proper names, alas. I have to guess its because these features look even less ‘lived in’ than the bare walls, stick furniture, and 19th century television in this redundant photo:

not a large budget for staging

I’ll eat my hat (figuratively) if the sellers were actually living in this loft when these photos were taken.

There’s no doubt (even without earlier listing photos) that the loft was just sold in the same condition as when the recent sellers bought it in December 2006. Here’s that broker babble:

12.5 ft. ceilings (double layered for sound), wood floors, exposed brick walls. Central A/C and heat, custom wiring/lighting and in-ceiling speakers. Large open Boffi Kitchen with Sub-Zero fridge, Meile dishwasher, Thermador range and Grohe/Franke sink. The master suite features Poliform walk-through closets, Bazzazi tile bath with Kallista whirlpool tub, separate glass shower, Grohe fixtures and a custom double vanity. W/D.

Thus, none of the change in value from $1.7mm to $2.3mm is due to a change in condition. This loft really did out-perform The Market, if modestly, in this time (again: while the overall market was up 23% from December 2006 to February 2015, the loft’s value increased 35%).

I also took a shot at the footprint in my sub-head above. It’s not the sellers’ fault, or even the developer’s. Most likely the reason the elevator is in the wrong place (for residential purposes) is that a late 19th century owner wanted to add the convenience of an elevator to an industrial building built without one, and added the elevator in the least expensive place: right on the front of the building (perhaps, originally, opening on to the sidewalk); the fact that the elevator blocked one of only three front windows was hardly important more than 100 years ago.

Long-and-Narrow, with windows front + back, but fewer windows because of the elevator (I hate when that happens)

Go back up to the first photo above to see how much that front corner window is missed. Again, it is nobody’s fault (nobody still alive, at least), just unfortunate.

not hating on the building, just this loft

The Market treated this loft pretty well, at least in historical pricing terms. And it didn’t take long, as the loft came to market on January 5 for $2.5mm and found the contract by March 8 that closed on May 19 at $2.3mm. $1,506/ft is hardly exceptional for a Tribeca condo loft, but this is a small no-frills condo (“private storage in the stairwell and basement”; no other amenities).

This loft is so … er … blah, that I didn’t realize at first that I was in this building two years ago. My buyer loved the 4th floor loft back then, but couldn’t crack the problem of laying out a 2-bedroom that wouldn’t ruin the charm of that space. The 4th floor could hardly look more different than the 3rd floor:

same brick, a similar kitchen, but a wonderful ‘feel’

Even the front of the 4th floor loft has a more open feel than on the floor below:

still only 2 front windows, but without that lofted closet (see the 3rd fl floor plan again)

I hit yesterday two same-building lofts further west in Tribeca that have very different looks. (That’s my June 17, Cobblestone Lofts seller surprised, disappointed that market at 28 Laight Street is so rational, of course.) While those lofts had similar footprints (and floor plans, in fact), they were not full-floor lofts or otherwise on top of one another. At 44 Lispenard Street, the 4th floor loft that sold in 2013 sits directly on top of the 3rd floor loft that sold last month,

What’s weird is that, though both are full-floor lofts, they have different footprints, hence, different floor plans. You see (above) that the “1,527 sq ft” 3rd floor really does use the entire rectangle of the building, less only that front corner elevator. But the “1,470 sq ft” 4th floor loft has another piece missing:

does the common stairwell sit in the southeast sliver? then where is it on the floor below??

You simply cannot squeeze a second bedroom onto this 4th floor footprint, not without an interior room that would ruin something else that is beautiful in the loft. (See that first photo above.)

The 4th floor is a wonderful 1-bedroom loft, though not quite big enough to qualify as a Manhattan Loft Guy One Bed Wonder. So the buyer pool for the 4th floor was limited to 1-bedroom buyers, unlike the larger pool for the 3rd floor. That buyer pool upstairs, while limited, was enthusiastic: that smaller loft came to market on April 4, 2013 at $2.15mm and was in a post-war contract within three weeks, closing at $2.35mm on July 18, 2013. Adjusting for time (with the StreetEasy Index, of course, up 16%), the 4th floor would be worth above $2.7mm in the current market.

That comparison makes sense, doesn’t it? The 4th floor should be worth at least 15% more than the 3rd floor, even as a 1-bedrrom-only, or 23% more on a dollar-per-foot basis. Put a $350/ft renovation budget into the 3rd floor (without touching the Boffi kitchen or the Waterworks master, that should go quite far) and you’d have something comparable to the 4th floor.

Fascinating! Much more interesting than an Index-based set of 17-year old numbers.