loft lab at 161 Hudson Street, as loft takes 5 months to make a quick sale

up 43% since 2004
Yesterday was pricing at 2004 (January 10, 150 Nassau Street mini-loft sells at about 2004 pricing); today is about the sale of the “2,117 sq ft” Manhattan loft #3C at 161 Hudson Street at $2,323,150, which (among other things) was way higher than the same loft sold for on November 30, 2004 ($1,624,108; at about the same time that the notional value of yesterday’s loft crossed its December 2011 value). Whew!

Of course, that 2004 sale was a sponsor sale, so perhaps this post should be wondering whether the sponsor left money on the table back in the day, but I am not going in that direction today. (In broad strokes, a +40% Tribeca result 2004-to-2011 seems large, but not ridiculously so, compared to the overall residential Manhattan real estate market.)

Loft #3C came to market April 25 last year at $2.395mm and did not find the contract that eventually closed until September 23. Nonetheless, it was a quick sale, as there was a (failed) contract within a month and (counting only days officially on the market) it took only 51 days after that for the (eventually successful) contract. Part of those 7 weeks had to have been consumed by ferocious negotiation, as the ask of $2.395mm got chiseled only by 3% to that very funny number, $2,323,150. If the last move in that negotiation was ‘split the difference’ from the last bid and counter, it had been quite a while since these folks were dealing in round numbers.

peering at the neighbors: up 1% over stunning neighbor upstairs in 2010
That quick timing (and chisel work) aside, what interests me most about the #3C sale (on November 29, but the deed was not filed until January 4) is how it compares to its peers, all of which were sold in brand spanking new condition in 2004. The sub-head says it closed ‘up’ over a 2010 sale, but 1% is a rounding error; the fact that loft #4C closed on August 31, 2010 at an even $2.3mm should be a data point in the recent media claim that The Market in 2011 was ‘flat’.

The broker babble is much more enthusiastic about #4C than #3C, but I these lofts are most likely in exactly the same condition (compare the kitchen photos in both, for example; the #3C floor plan has an ‘office’ where #4C has only storage, but they are otherwise identical). So, the #3C 2011 value compared to #4C in 2010 … essentially identical.

Of course, 2009 was a different market than 2010-2011. Not just generally in the overall residential Manhattan real estate market, but hyper locally: loft #5C had the poor fortune to have been offered for sale in the depths of the post-Lehman nuclear winter, on January 3, 2009, and the worse fortune (for those sellers) to have a musta-haveta-gotta need to sell, starting at $2.7mm, dropping twice quickly (down to $2.45mm) and once more that July (to $2.295mm), just as the overall market was thawing. Either #5C was perceived as damaged goods, or buyers saw blood in the water, for it took #5C until September 22 that year to find a contract. Those unfortunate sellers cleared out on October 23 at $2.065mm … clearly a punishing price.

Look again at #4C in August 2010 compared to #5C 10 months earlier: $2.3mm  to $2.065mm. Put aside for the moment the really painful woulda-shoulda-coulda for the #5C sellers, who (in theory, at least) could have tried to sell a year before they did, and might well have achieved peak pricing. Instead, the got frostbite, selling for 10% less than #4C in 2010 (or 11% less than #3C in 2011, for those who want to quibble).

So far, the hyper-local “C” line market in the loft building that was home to the former Wetlands Preserve music (and old Volkswagen) venue in north Tribeca mirrors the overall Manhattan residential reasl estate market very well, from early 2009 through 2011.

the limits of over-analyzing data points
In a perfect world, we would find a “C” line loft sale at 161 Hudson Street that was at The Peak of the overall Manhattan market, and that sale would (a) reflect a (roughly) 25% peak-to-trough history, and (b) be still at heights The Market has not yet provided to current sellers.

Loft #2C does not quite live up to these expectations: selling for $2.4mm on July 13, 2007. Price is a little low for my taste, and the timing just a little short, about 6 months ‘too soon’ for an Absolute Peak experience. But The Overall Market is a trend line made up of messy data points, some above the line, some below. Comparing #5C in October 2009 to #2C in July 2007, that spread of (only) 16% might be artificially low because #2C should sell for less than #5C in a perfectly rational market due to floor height (#5C is the only one to brag about “open city views”).

We will have to be happy with what we have: four “C” line sales in 2007, 2009, 2010 and 2011 that line up directionally with what you would expect. Highest in 2007, lowest in 2009, and 2010 and 2011 at parity.

If you want more than that for a single small (24-unit) Manhattan loft building, you are greedy.

© Sandy Mattingly 2012