took a while for architects to wake up to gut project loft at 39 Worth Street

why so long to get to small discount?

The broker babble for the “2,000 sq ft” Manhattan loft #2W at 39 Worth Street in Tribeca’s business district is not subtle:

AN ARCHITECT’S DREAM

Bring your design team to this classic 2,000SF floor-thru loft ….

You got bones (“13-foot original tin-pressed ceilings, exposed brick walls, century-old pine floors + light from enormous windows”) and, of course, “[i]ncredible potential”. The loft ended up selling for $1.55mm, only a small discount from the last ask (2.8% off of $1.595mm, since June 2012), a slightly larger discount off the $1.649mm asked since October 2011 (6%), and only 8.5% off the first asking price in April 2011 ($1.695mm). Those are small discounts and many months to finally get the deed done for what was plainly presented as a total gut job from the get-go.

I don’t think the architects were sleeping, and I don’t think anyone on the design team or even the civilian purchaser were under any illusions about the work required. After all, the babble claims 100 year-old flooring and the floor plan is about as primitive as primitive gets, with one window in front for the kitchen, one in back for the single bedroom, and a sleeping platform in the middle built on top of storage, for the odd guest or (more likely) the awkward teenager. I mean, seriously: the floor plan looks as though it was set up by a single person or couple when s/he/they could not imagine using All That Space in the vast open middle of the loft; I’d say it is 50/50 whether there even was a “bedroom” as originally lived-in, with that tall clerestory window being a possibly later concession to privacy, and an attempt to keep the north light available to the public space.

If you read the New York Times piece or my commentary about it (March 17, backstory to New York Times about buying a wrecked loft at 37 Walker Street), you’d be excused for thinking that there is a significant buyer pool for primitive gut-job properties (lofts included, of course) because … well … everyone’s favorite appraiser certifies that there is a significant buyer pool for primitive gut-job properties (lofts included, of course):

Real estate brokers and analysts report a significant uptick in Manhattan in the number of buyers seeking properties in need of major overhaul, alert for such tipoff phrases as “bring your contractor and your imagination.”

According to Jonathan J. Miller, the president of Miller Samuel, the real estate appraisal firm, an analysis of sales of properties rated as “wrecks” or in “fair” or “poor” condition jumped 40 percent between the fourth quarter of 2011 and the same period in 2012. Between those two Decembers, the increase was a hefty 83 percent, indicating soaring desire for such properties at year’s end.

As for the limited inventory driving this trend, “the listing of properties in Manhattan fell 34 percent from the fourth quarter of 2011 to the same period last year, the lowest level we’ve tracked in more than 12 years,” Mr. Miller said. “So we’re seeing more creative and flexible buyers who are faced with a lack of choices as inventory remains tight. As a result, we’ve seen an increase in sales of places in poor condition — a k a wrecks.”

But loft #2W at 39 Worth Street lingered from the Spring of 2011 into the Fall of 2012, instead of being snapped up by one of those “more creative and flexible buyers who are faced with a lack of choices as inventory remains tight”.

I have a theory, in two parts, though neither the Light part nor the Feet part is entirely satisfying.

“light from enormous windows” is one-sided

The babble brags on the “light from enormous windows”, and the listing photos show very tall windows, front (kitchen) and back (bedroom). But the rear photos are so washed out that you can’t tell what is on the other side of those windows. Indeed, you’d never know without being in the space (or peering between buildings around the corner on West Broadway) that there can’t be much light coming in those enormous rear windows, as they face the new New York Law School building that wraps alongside and behind 39 Worth Street, dwarfing this 5-story loft. (If the Google Maps page holds together in this link, click to look directly at the gap around the corner on West Broadway between the Pamper Ur Pets storefront and the New York Design storefront; you are looking at the west wall of 39 Worth in brick, to the right, and the monochrome law school colossus on the left.)

In other words, there ain’t any light and even less of a view from the rear of loft #2W. I bet that surprised (and disappointed) a bunch of potential buyers.

about those feet…

The broker babble claims this coop loft is “2,000 sq ft”, with a floor plan that approximates the interior width as 22’ 2” and approximates the interior length as 82’3”. Those numbers don’t jibe without counting some of the square feet inside the walls, but the spread appears to be tolerable for Manhattan coop lofts (1,823 sq ft v. 2,000 sq ft) except to the most fastidious buyers (like this litigious guy). This ‘defect’ (if defect it is) is at least visible to any careful buyer who does the floor plan math.

What is clear is that The Market was not excited by this build-out-a-wreck possibility, despite it being priced pretty close to market value for nearly 16 months.

a building standard value for buy-and-build lofts?

Of course you know that lofts in small buildings are difficult to comp unless there is recent sales activity. In this case, the most recent sale is not very recent. The “2,560 sq ft” loft #3E sold for $2mm on June 7, 2010. That was definitely not marketed as a wreck, or even in much need of updating, but we know that the buyer did a major renovation. (That unusual before-and-after opportunity was featured in my April 18, 2011, ever so rare before and after shots of 39 Worth Street loft.) At $781/ft that #3E sale compares well to #2W at $775/ft, even though the sales were almost 3 years apart. I am not saying that the two lofts were in very similar condition, but it is striking that the two different markets valued them at such similar levels.

© Sandy Mattingly 2013