location, location, location
Stop me if you’ve heard this before: a Manhattan loft that needs pretty much everything sails through the market above ask. That’s the story with the "2,000 sq ft" Manhattan loft on the 8th floor at 1 Hudson Street, which came out on March 8 at $2.198mm, was in contract by April 19, and sold on July 10 at $2.43mm, despite being "in original condition". In other words, a certain and total gut job, in a no-frills coop just sold for $1,215/ft.
Oh wait … that sounds like the other lofts I hit this week that went quickly above ask (August 19, 152 Wooster Street loft shows that character matters, competition drives premium, and August 20, 463 Greenwich Street loft is a fascinating project, sells at $1,442/ft), although they both had elements that might be retained in a renovation. The one thing that this 8th floor loft at the corner of Hudson and Chambers has that the 2nd floor loft in north Soho and the 4th floor loft in northwest Tribeca do not have is a wide open view.
Of course the three most important things about real estate are (in order) 1. location, 2. location, and 3. location. This axiom applies to the 8th floor at 1 Hudson but not strictly for its just-off-prime Tribeca placement at this very busy intersection; the axiom applies most because that corner sits opposite Bogardus Triangle and 1. Bogardus Triangle is a large undeveloped plot just west of the wide Varick Street, and 2. lofts at 1 Hudson Street have 12 windows facing the triangle and the open northeast sky behind it (the fourth listing photo does not do it justice), with another window facing southeast, with the Woolworth Building view in the second listing photo. (The 8th floor [open] floor plan is here.)
Google Maps gives a good sense of how wide (how far from other buildings) this prospect is. This view is not going anywhere (unless someone builds on Bogardus Triangle ;-), unlike the light from the parking lot windows at 152 Wooster or the slice of river at 463 Greenwich endangered by Ponte Family Interests. As the broker babble for the 8th floor puts it, “21 windows … wrap the loft and offer deep south,east, and west views of Tribeca’s present and future landmarks as well as charming street scenes”. (i assume the “future landmarks” is a clever reference to 56 Leonard.)
if only there were a recent nearby sale to use as a comp…
Sometimes comping is hard in a 10-unit loft building. Bear with me as I meander through some hard data.
In this case, there are full-floor sales of a 4th floor from June 2010 at $2.2mm (a 10% premium to ask) that was in decent but not very brag-worthy condition, and 6th and 10th floor sales in August 2008 at $2,437,500 and $2,525,000 that should reflect a close-to-Peak market in better condition than the 4th floor, and a not-very-useful-as-comp true penthouse sale in January 2013. The 10th floor listing surviving on StreetEasy lacks pictures and a floor plan, but fortunately I had visited the loft when it was for sale and blogged about the sale in my August 8, 2008, what a difference $675k makes / 1 Hudson Street closes. Indeed, I even hit it as a new listing, back when I used to do such things, in my October 10, 2007, top of the bottom of Hudson is new / 1 Hudson St has top price.
I quoted myself in that post when the 10th floor sold, parsing the broker babble and considering past building sales:
As I said in that October post,
The BHS listing description is a fascinating thing to deconstruct. While describing the loft as "magnificent", the only bragging is about the building (beautiful and historically significant), the ceilings (13 ft, with skylights), the windows (original, wood-framed), light, and views.
Not a word about the kitchen or the condition of the (only) 1.5 baths. No close-up of the kitchen in any of the (only) 3 interior pictures.
When I visited the loft it was clear that they were selling what was outside the windows, as the interior was nice — in a 1980s kind of way — but not what most $3mm buyers would leave untouched. Figure around $400k for a gut renovation.
As I noted then, that was a pretty big premium for views:
They are asking $3.2mm and $2,557/mo for "1,800+ sq ft", a very hefty premium for the view over the closed price for the 3d floor from February 2005 of $2.3mm (that was sold as "a beautiful and well-designed masterpiece").
All in all, asking $2.198mm for the “in original condition” 8th floor starting in March 2013 seems reasonable in light of these past full-floor loft sales … but there’s a more recent data point.
The 9th floor loft sold on May 15 off a December contract, after having taken 6 months and asking prices of $2.9mm and $2.75mm to find the deal at $2.6mm, the new (and reigning) building record price. That price implies a loft in pretty good condition (certainly, better than the “nice — in a 1980s kind of way” of the 10th floor as prior building record holder), though the broker babble is rather muted and the photos are rather unrevealing. Instead of saying “recently” or “completely” or “meticulously” renovated, the 9th floor babble vaguely says about finishes “open chef’s kitchen”, claims only “stainless appliances”, and adds the detail of central air.
Again, asking $2.198mm for the “in original condition” 8th floor starting in March 2013 seems reasonable in light of the 9th floor (in contract at $2.6mm since December), if the 9th floor is one $200/ft renovation better than the 8th floor.
In the event, The Market thought the spread between the 8th and 9th floors should be much smaller than $200/ft, the 8th floor closed at that $2.43mm, or only $85/ft less than the 9th floor. I never saw the 9th floor, so I don’t know more about its condition. The Market was not very impressed, but how much of it was believing the loft was updated-but-not-very-well and how much of it was the difference between market conditions when contracts were signed (December 2012 v. April 2013) is impossible for an outsider to say.
I was going to say “my money is on …” but I’m just a blogger, without money in this game; my best guess is that The Market really was underwhelmed by the 9th floor condition, and therefore paid a premium to start over on the 8th floor to do a really nice renovation.
© Sandy Mattingly 2013