74 Fifth Avenue loft celebrates new plumbing rooms by selling 34% over 2007

this Flatiron loft still has crappy light, no views

This is a sequence that drives appraisers (and other data-driven Manhattan residential real estate folk) crazy: the “1,900 sq ft” Manhattan loft #4B at 74 Fifth Avenue in central Greenwich Village just sold for $2.65mm by owners who had paid $1.975mm in September 2007 (just one calendar quarter short of the bygone era we used to call The Peak). The loft Then had essentially the same floor plan as now, but the angst is driven by changes of uncertain scale and scope, likely making it very hard to comp the loft for the August 7 sale and especially hard to use this pair of sales in a comps analysis. (For example, the StreetEasy Manhattan Condo Index methodology says that it screens out outlier pairs; compared to this 34% gain from September 2007 to now, the Index change was only 7.3%.) If we knew exactly what upgrades there were from 2007 to now we’d have a better idea of what comp adjustments to make, but we don’t, so we don’t. Drat.

Loft #4B has a floor plan that is more efficient than impressive, with the major defect ameliorated by what is (nearby) outside the windows. Check first that floor plan:

Do you see the layout problem? There are only two windows in the public space, a space that takes up about half the “1,900 sq ft”.   In many cases, that would mean that the bedrooms are stealing light from the living area. The good news/ bad news is that this problem is trivial in this space, as none of the windows bring much light, making this a great loft for nocturnal types who sleep during the day.

Check out how close the bricks visible in the two living room windows are in the main siting photo:

(As always, window treatments pulled halfway down are a big hint that there ain’t much to see.) The room with the best light is that bedroom in the northwest corner, with two windows north and one west. But there’s nearby brick in each of those windows, also. Alas.

(All photos from Douglas Elliman, obviously.)

guessing is a crummy way to do comps

The very successful marketing campaign for loft #4B (contract within a month, $55,000 over the ask) lacks magic words like no-detail-overlooked-renovation or recent-renovation or even gut renovation; the broker babble does say “beautifully designed … and pristine move in condition“, but that seems to me curiously understated if, in fact, there was an extensive renovation after 2007.

The 2007 marketing campaign also features modest babbling (bragging limited to “a tremendous cook’s kitchen“) but has a similar enough floor plan to suggest that any renovation after 2007 was less than “gut”. Comparing the listing photos (old ones are best seen on the Corcoran site) reveals that the kitchen and two baths are substantially changed and that the (formerly) dropped ceilings have been opened up to reveal the beams. (Best observed in the first two old listing photos, of the kitchen and living room.) I love it when owners bring back original ceilings, partly for the height (and associated volume) and partly for the look (flat dropped ceilings with high hats are so darn … flat). That kind of change suggests a general scrubbing of the loft, but I don’t see other changes like new (or restored) hardwood flooring or brick exposed by stripping more sheetrock, or fancy cosmetic work such as stripping iron or wood columns.

The new kitchen and two new baths look fancy enough, but it is impossible to intelligently guess at the budget for these upgrades. Anywhere from $75,000 to $300,000, but nowhere near the difference between the clearing price of $2.65mm and the pre-renovation September 2007 price of $1.975mm. (Assume a $300,000 renovation as we just play with numbers; the market gain would then be 16.5%, still a much larger gain than the 7.3% the StreetEasy paired resale Index for the overall Manhattan residential real estate market would imply.)

So it looks as though the buyer-in-2007-turned-2014-sellers created substantially more value in upgrading the plumbing rooms and exposing the old ceiling. And got almost $1,400/ft in a few-frills coop with no light or view.  Nicely played, sellers; nicely played.

moving uptown, in so many ways

Of course I am curious about where people who sell downtown Manhattan lofts go after they sell. Based on the notice address for sellers in the deed record, the folks who did such a nice job upgrading loft #4B in central Greenwich Village (and who profited nicely) moved way north to prime Upper East Side into a space that is at a whole ‘nother level of values. It appears that they rented rather than purchased this truly stunning duplex on Park Avenue at 87th Street (hard to get up-er Upper East Side than that) that is much larger than loft #4B (“3,228 sq ft”!) that was recently asking $32,000/mo for rent and (gulp) $9.95mm for sale. You don’t often see folks move into space worth nearly four times the space they left. But if they were tired of no-light-and-no-views they surely solved that problem (Note the corner views up Park Avenue and toward Central Park in the losing photos for the stacked master suite and living room. Yowza.)

Seems like their ship came in sometime in the last 7 years. Maybe even a bigger ship that that of George and Louise 40 years ago….