late original buyer at 415 Greenwich Street flips Tribeca Summit loft for fun and profit

nicely played, sir (& madam); nicely played

For people with an ‘investment’ approach to Manhattan residential real estate, this is how it’s done: buy at $3.35mm, sell 14 months later at $4.085mm. Everyone would do that if they could, of course; the trick (usually) is doing that first leg at a time at which others are reluctant to buy. By ‘this’ I mean the “2,318 sq ft” Manhattan loft #8A at 415 Greenwich Street (in the tough-to-launch Tribeca Summit new development of 2006-turned-2008) bought as (one of?) the last sponsor unit(s) on February 1, 2012 at $3.35mm and sold by those original owners on April 1 at $4.085mm. That’s a 22% gain ($735,000, before expenses, of course) in 14 months.

The first step is the hardest, right? Links to past Manhattan Loft Guy posts about this (as I said above) tough-to-launch new development are below, but the folks who just flipped up 22% were not the only ones with the opportunity to own this loft. The listing history is incredibly spotty on StreetEasy (and irrational, with contracts followed by price changes, and all those contracts …), but here’s what we have, with anything you can’t see on Streeteasy coming from our listing system:
 

(Perhaps I missed it, but I don’t see any attempts to rent loft #8A in this long presale period: 73 months, from start to finish.)

I mentioned that #8A sale, along with another tortured sponsor sale in the “A” line (#5A), in a post about the resale of #3A. That post, my August 27, 2012, 415 Greenwich Street loft resale clobbers sponsor at Tribeca Summit, nears record, extensively reviewed 3-bedroom sales at Tribeca Summit, ranking 8 such sales on a $/ft basis, and explaining why that February 1, 2012 sale of #8A at $3.35mm probably seemed like a good idea (for the sponsor) at the time. Long story, short: loft #5A had a very similar history to #8A, and (finally!) sold on May 6, 2011 at $3.025mm (see that post for tortuous details, detailed in tortuous Manhattan Loft Guy fashion).

That post was really about the resale of #3A at $3.505mm on August 13, 2012:

A couple of things are obvious. There was more than one very interested suitor for #3A three months ago, and none of them were interested in #8A more than three months before that. In other words, these #3A suitors were not in the market for a “2,318 sq ft” 3 bedroom loft with behind the Holland Tunnel spillways in Tribeca above $3mm when they could have bought #8A for $3.35mm or so.

Neither the #3A buyer at $3.505mm not the sponsor seller of #8A at $3.35mm is laughing, but there is no (rational) explanation for this pair of sales. It is just one of those The Market Is Funny Sometimes, In’it? moments. (Funny peculiar; not funny ha-ha.)

The nuclear winter that characterized the overall Manhattan residential real estate market after Lehman’s bankruptcy in September 2008 lasted much longer in this building, no doubt because the original developers went belly-up (probably around May 2009, reading between the lines, as I said on August 27, 2012, of the):

StreetEasy building page [, which] will give you dates of closings and corporate sellers if you want to see precisely when the break occurred, how many lofts were closed in the first efforts, and how many were after the sales efforts were revived. Knock yourself out.

(I hit on the 2010 sponsor “discounts” here in my July 15, 2010, more developer haircuts, as 415 Greenwich lofts cut to close.)

Point is, there wasn’t much buy-side competition for remaining sponsor units as recently as early 2012, as proven by the #8A price of $3.35 on February 1, 2012, following #5A at $3.025mm 9 months earlier. Those buyers were taking a risk that other buyers were clearly not willing to take.

“A” lot of activity, of late
This post is about the #8A buyers-in-2012-turned-sellers-in-2013 rather than about the #5A buyers in 2011, but note that the #5A buyers bought an even greater risk in May 2011 ($3.025mm!). Things began to look up for them when our (now) friends stepped up to buy #8A at $3.35mmin February 2012, and things continued to look up for both of them when #5A resold at $3.505mm. Things are really looking up for brave “A” line buyers at Tribeca Summit now.

The new prices show that the ‘old’ risks that had been tamping down values in this specific building are now priced out of the market. What a long strange journey for #8A, a rather profitable one for the intrepid February 2012 buyers.

When the #8A buyers-in-2012 came to market on November 20, they were really pushing the market, as the last “A” to sell at that point was #3A at $3.505mm 3 months earlier. Obviously, that worked, and fairly quickly:
 

The neighbors downstairs in #6A (who were original original buyers, on June 12, 2008 at $3,487,586) sensed the same momentum, and went head-to-head with #8A. That resale was also pretty quick, though at a relatively large discount (in light of subsequent events) unless there is a huge difference in view from the 8th floor:

With that data point in hand I am even more impressed with our #8A friends. They weathered the head-to-head competition from a neighbor who tried to did undercut their price and held out for a premium over the undercutting neighbors’ ask, and for (what they may or may not have known was) a larger premium over the undercutting neighbors’ contract.

Once again: nicely played, sir (& madam); nicely played. Your (former) neighbors appreciate how you re-set the market.

© Sandy Mattingly 2013