these water views from a 505 Greenwich loft are worth $370,000 (really)

no … really … I can prove it
Sometimes the loft market in Manhattan has moments of great clarity. When #12B at 505 Greenwich Street closed on December 29 at $1.895mm, we did not then realize it, but we were only 5 days away from a moment of clarity about the value of a river view in this building. I will give you the answer (rather, I gave you the answer in the title) but allow me to lay a base before I show you my worksheet.

The outstanding positive thing about #12B is the view. Rather, (I will quote but not use the darn babble CAPS) the "panoramic water views". The most interesting negative is that it sold with "tenant in place until Spring". Rather, that it sold at all with a strong price a few months before occupancy could be assured (unless bought, which takes money). Otherwise, the listing description gives every indication that #12B is in the same condition as any well-maintained unit in this 2004 new development: the same proper proper names for the appliances, 10 foot ceilings, big windows, central air, etc, etc, etc.

#12B sold in the original offering in March 2005 for $1,659,747, so the recent sellers enjoyed an appreciation (before expenses) of 14.2%. Close readers of Manhattan Loft Guy will recall another loft in this building that recently sold at an 8% premium to it’s original 2004 sale. I hope that those same readers are ahead of me, and recall that that loft is #7B, and that it closed on January 3 at $1.525mm after being bought from the sponsor on December 20, 2004 for $1,415,367.

a highly relevant very recent (in the future!) comp
#7B sounds like the same “1,279 sq ft” loft as #12B, except that instead of "panoramic water views" it had (only) "light all day long". (Look at the main listing photo for #7B: it nearly clears the roof line across the street; so no angle to see the river but great western light.)

etc = $370,000 (was $244,280)
There’s my worksheet. One loft has great light; the other (same line, 5 floors up, in identical condition) had panoramic river views. One sold for $1.525mm; the other for $1.895mm. They were both on the market at the same time: #7B reached a contract on Oct 29 after 6 months on the market; #12B signed a contract by October 19 after only 4 weeks on the market.

I have been shocked before about what The Market will pay for a view, but this is pretty clear: the water is worth $370,000 in this building. Rather, the water view to a particular buyer in October 2010 was worth $370,000 more than just having great light, and in March 2005 the view was worth ‘only’ $244,280.

Another interesting thing about this valuation spread is that the #12B seller and agents knew it. They got that contract within 4 weeks at the asking price of $1.895mm.

idiosyncrasy, valued
Personally, I think it is hard to predict how valuable a great view will be, but this data set is pretty clear about this building. Really close readers of Manhattan Loft Guy will remember an even greater value for a great view, one that did not involve water. I can’t claim to be subtle: the title of my March 20, 2010 post says it all: a $2 million view on Madison Square? comping at 15 East 26 Street. (A post that never got spell-checked … ouch. Will fix that.) At 505 Greenwich the demonstrated premium for the river view was ‘only’ 24%; at 15 East 26 Street the new offering spread for a high-floor view of Madison Square was 75%, or $2,014,000. Really.

Here is what I said then (note that I was wrong about not finding a cleaner pair of sales from which to isolate the view premium):

The clearing prices (can’t you feel the tension mounting?) are contemporaneous: buyers signed a contract on the smaller one on January 5; for the larger one on November 26. In other words, you might never find a pair of sales in which The View is so obviously the only difference. As it happened, the developer got nowhere near the asking price on either unit, but was right about the value of the view. Somebody paid $4.73mm for the view in #14A; somebody else paid $2.69mm for the same amount of space and (only) "sweeping city views" in #14F.

Department of Redundancy Department
At this 2009 new development the "sweeping city views" cost only $2.69mm; the park views cost $4.73mm. Really!

© Sandy Mattingly 2011