strict 2-bedroom loft at 222 Park Avenue South takes a while to find its buyer

appreciating the personal style
I am not going to repeat the Caps Lock portion, but I can testify that the opening bit of broker babble about the “2,500 sq ft” Manhattan loft #3E at 222 Park Avenue South at the southeast edge of Flatiron is correct. The loft is a “stunning architectural masterpiece”, in which “you [may well] will be blown away by the attention to detail”. And, yes, “[a]ttention to detail is evident throughout this phenomenal loft with an unbelievable recessed lighting system, Venetian plaster walls, alabaster granite floors, duel zone central air, and a top-of-the-line multi-room sound system”.

But there’s one bit of babble that gets at the nub of why this beauty took 4 months and a significant discount to find its buyer. I don’t agree that the loft “[c]an easily be converted back to a 3 or 4 bedroom”, at least not without trashing some of the most beautiful parts of the layout and design. Let’s start with that layout, move to the lovely finishes, then consider The Market’s (muted) response to this grandeur.

It is obvious on the floor plan where a third bedroom would be, and I have to assume that a potential fourth would be in that same area (unless you ruin the huge open room), resulting in rather small bedrooms, but one lesson from The Market’s response is don’t do it! Exchanging the library for bedroom(s) is do-able, but would ruin the WOW factor on entering the loft and seeing the “architectural designed wood-veneered cylinder and wenge built-in cabinetry” in the present library right in front of you. (By the way, I find the floor plan on the Elliman site is easier to work with, especially as the StreetEasy large format version cuts off the bottom, missing that there’s a good-sized closet in that second bedroom; another coding glitch in The New StreetEasy??) Replace that library with a single bedroom, and you lose the view of the (truly) dramatic cylinder; replace the library with two bedrooms and you probably have to destroy the cylinder and shrink the master closet inside it. Forgive the hyperbole, but doing that (especially the 2-extra-bedroom option) would be like buying the Sistine Chapel because you like the high ceilings, then redoing the artwork.

Which is to say that this “2,500 sq ft” loft works as a 2-bedroom and only as a 2-bedroom. If you want that kind of space with more bedrooms, buy another loft rather than pay for all the wonderful work of a previous owner. Again, that babbling is right: the place is beautiful, with top materials, proper proper names; it is a very sophisticated (grown-up) space optimized for a small family that loves to entertain. (Yes, that dining table fits 14, comfortably.) I don’t like it (at all), but I didn’t buy it. To me, it is elegant but cold, more Park Avenue than Park Avenue South, with no classic loft elements other than its dimensions. For crying out loud … the floors are marble, not hardwood (original or new).

I think the marketing problem this loft faced was more due to the 2-bedroom-ONLY angle than the style, though people looking for classic lofts would never even visit this (uptown people wanting an uptown experience at a downtown address might flock here, though there’s no doorman). And here is only the most recent the marketing problem, in dates and dollars:

  • January 31 new to market at $3.85mm
  • March 19 drop to $3.495mm
  • June 1 contract
  • August 29 sold for $3.275mm

Four months is not a long time to contract, except by comparison to so many other lofts these days. Selling 15% off your original ask is not such a deep discount, except when so many lofts these days sell off the original price, faster and closer to the ask.

There were earlier marketing problems: there were 11 months well into 2011 when the loft did not sell while asking $3.25mm and $2.95mm (evidence that The Market has improved dramatically since then); there was the full frothy year before Lehman’s bankruptcy when the loft did not sell from prices ranging from $4.75mm to $3.995mm (evidence that even the frothiest market will ignore a dramatically over-priced loft). The recent seller bought loft #3E in its present condition (you can’t tell that from StreetEasy, but I can from our listings data-base) on August 16, 2004 at $2.375mm, which gives you an even better idea of how wacky the September 2007 ask of $4.75mm was. And the $3.95mm of March 2008. And the $3.85mm of January 2013.

come with me upstairs to see why I love loft buildings
That last dig may not be quite fair, as there was a very recent and very relevant data point in January 2013 that arguably supported asking $3.85mm for #3E this year: the very different loft #4E on the same footprint sold for $3.975mm right after Christmas. Loft #4E earned that value by having 4 real bedrooms, a renovation that is the equal of #3E (while very different), and by having a long wall of (high) west windows where the floor below has a blank wall.

Two lofts, one on top of the other, that have similar utility (if you mucked up #3E with more bedrooms) and the same size, that have major differences. I am about 98.13% certain you won’t see this scale of difference in uptown “apartment” buildings, starting with the kitchen placement. The #4E kitchen sits where the #3E library is, along the north wall; #3E’s kitchen is where the #4E dining area is; each is huge and highly designed and finished (#4E claims “a restaurant quality custom Henry Built kitchen”). Where #3E has a huge great room, the upstairs loft cuts that space in half to fit a huge master suite along the east wall (with a “gym/home office” [!] tacked on), exactly where #3E had that massive dining table.

See the #4E broker babble and listing photos for more detail on the no-expense-spared, no-detail-overlooked renovation of #4E. They are both too bright and shiny for me (as a classic Manhattan loft snob), but at least #4E has maple flooring and fully exposed ceiling beams and sprinklers.

I wonder if there was a tactical decision by the #3E owner not to go head to head with #4E, or if he just wan’t ready then, or didn’t want to ruin his holiday season with appointments and maintaining a show-ready environment. #4E came out on October 26 at $4.2mm and showings were done by Thanksgiving (contract signed by November 26); as noted, it closed December 26 (is 26 a lucky number somewhere?) at $3.975mm, a 5% discount achieved in 30 days.

I also wonder if people who were interested in #4E but put off by the “$4” were interested in #3E at $3.85mm and (especially) $3.495mm. They are very different spaces, with very different feels, that meet very different lifestyles and needs. The one with more bedrooms and more light sold for a 21% premium to the one that has a more sophisticated look and a party party party layout. You cannot convince me that those high-in-the-wall west windows in #4E let $700,000 worth of light bathe the place.

If you did not know that #4E has sold for $3.975mm, you’d think that #3E at $3.275mm was a strong value. As it is, it shows that #3E did have some marketing problems, probably related to the very specific design and layout choices that would appeal to a sub-set of downtown Manhattan loft buyers in the $3s.

If you have a different theory, the comment function works in this new platform.

Tagged with: , , , , , , ,

Leave a Reply