New York Observer observes loft sale at 165 Duane Street but does not like lofts

or follow Manhattan Loft Guy
At least two things did not impress the New York Observer about the recent sale of the “1,550 sq ft” Manhattan loft #3D at 165 Duane Street: that it garnered a gain of only 10% from its near-Peak purchase in September 2007 at $1.7mm; and that lofts tend to have a single large open space. That’s just wrong, in both cases. Regular readers of Manhattan Loft Guy know that a 10% gain from 2007 to the current market is neither disappointing or unusual from the perspective of the overall Manhattan residential real estate market (or specifically, from the downtown Manhattan loft niche, as in my September 27, 2011, is the Manhattan loft market back to (up to) 2007? 61 repeat sales say “probably”, “a bit”) and that the “problem” identified in slide 4 of the slideshow (“That’s the problem with a loft. Different views, but it’s the same room”) is a feature of lofts, not a bug.

The O is more in the business of snark than news, of course, so here is one take on the “Canada’s Warren Buffet” and his decision to unload his disappointing (for a fat cat) pied-a-tierre:

Whatever charms Lower Manhattan held for the financial guru were almost certainly diminished by the whole Occupy Wall Street debacle. After all, it was his (well, Brookfield’s) own Zucotti Park that they were occupying.

In other words, the fun is that maybe the whole Occupy movement soured the guy on Manhattan, even from his modest pied-a-tierre. Nice try!

(Not to overdo the O as non-news, but why can’t they ever get the facts exactly right? In this case, the reported purchase price of $1.87mm was really $1.875mm; perhaps they needed to save that extra character, and kept the price to two decimal places. They’ve been wrong before, of course; I was on a sort of roll against them a year ago, e.g., in my July 28, 2011, NFL guy sells loft at 347 West 39 Street, Observer gets facts wrong (again), July 15, 2011, interesting loft sale at 260 Fifth Avenue, but Observer gets it wrong, and June 17, 2011, 19 Warren Street loft sold by minor celebrity at major profit. As I said in that July 15, 2011 post: “Small errors of fact, perhaps, but errors of fact nonetheless. In a friggin’ newspaper. About the data actually reported “according to city records”. Why do they do that?”.)

meanwhile, back on Duane Park, there have been some changes…
The non-Buffet guy bought the loft on September 17, 2008 for $1.7mm, just 15 weeks before the beginning of Peak quarter. Sadly, that listing is missing from StreetEasy; worse, our listing system (it was a Corcoran exclusive in 2007) lacks detail and interior photos. It did not last back in the day, however: coming to market at $1.65mm on February 16, 2007 and in contract a month later (with a price increase to $1.7mm) at full price.

The old floor plan survives in our system, and it shows some subtle changes, enough to suggest that the “new hardwood floors define the space while top-of-the line renovations” claimed in the recent broker babble are, in fact, “new” since 2007. Of course, that puts the price gain of $175,000 in a different light. (The same kind of light that shone in my August 16, 126 West 22 Street loft beats near-Peak, with upgrade, and in my August 14, 43 East 21 Street loft beats near-Peak value, breaks building record.) Guessing that the new elements include, in addition to that flooring, a newly appointed kitchen (“stainless Bertazzoni range, Subzero refrigerator drawers, a Bosch dishwasher, Grohe fixtures and custom cabinetry”), the “custom-designed nine foot tall glass paneled sliding doors” and an “incredibly sleek second bath”, but that much (at least) seems like a very good guess from the respective floor plans.

Alas, all this work means that what The O described as “a pretty modest profit” is rather modest, indeed. Perhaps the eh-Buffet did really want to leave New York, almost at any price. Newly appointed kitchen plus new second bath plus (probably) new master bath plus new custom doors sounds like more than $175,000 could handle, and still leave a non-trivial gain (before considering sales fee and other expenses, of course).

No surprise, but the guy wanted more. Omitting a ten-day holiday hiatus:

Sept 6, 2011 new to market $2.15mm
April 4, 2012   $1.995mm
April 30 contract  
Aug 8 sold $1.875mm

awkward elevator chats?
Notice how long he held out for $2.15mm? Here’s what was going on upstairs in #7D in part of that time:

Nov 15, 2011 new to market $2.15mm
Jan 10, 2012 contract  
Mar 15 sold $2.15mm

Obviously, The Market preferred #7D to #3D, by a lot, even though #7D has nearly exactly the same floor plan as #3D and babble that was no more enthusiastic than the #3D babble:

sunny, mint, gut renovated 1550s/f loft…. spacious open kitchen which features a SubZero refrigerator, Six-burner Thermador stove with two ovens, Miele dishwasher and granite countertops, …. high ceilings, new, oversized windows and distinctive archictectural details

I hope it is not just trick photography, but the deluxe #7D kitchen looks much more warm and appealing (to my eye) than the #3D kitchen. (Characteristically both pithy and punchy, The O in slide 5 said this about the #3D kitchen: “Expensive-looking[,] Bland”.) That aside, the only difference that seems an obvious market driver does not seem like a big driver: this loft on the 7th floor is called “sunny”, while on the 3rd floor there is no bragging about what is outside windows, or what the windows allow in.

No wonder the #3D guy was holding out for $2.15mm, and it is very likely he was sorely disappointed not to get close to the #7D close.

To recap, score one for the New York Observer for calling the post-renovation $175,000 (apparent) gain “a pretty modest profit”, even if they don’t get the market cycle; score two for the New York Observer for snarking on the kitchen as (likely) being a culprit in keeping the profit down even if they didn’t know about the upstairs sale; but take points off for moaning that lofts have big rooms. Or score it any way you prefer. My thanks to Kim Velsey of The O for provoking me into considering why this loft traded where it did, and the hat tip goes to the Tribeca Citizen for linking to the NYO yesterday.

© Sandy Mattingly 2012

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