161 Grand Street sold in 2005, in 2007, in 2010 … hmmm

’tis a puzzlement
I have been wondering about the Manhattan loft #2A at 161 Grand Street (the 2002 new development The Solita) since I noticed last week that it sold on March 11 at a 20% premium over the last sale in February 2007. That 2007 sale was at a 13% premium over the prior sale in January 2005, which was a sponsor sale even though this condo had been formed and other units sold in 2002 (presumably, they rented this one out). (Yes, I will add this loft to my data dump of 2007 and 2010 paired resales, next time I update that March 5 post; but not today.)

That price sequence is interesting enough. There are also some peculiar comparisons to other sales in the building. Into the weeds we go…

size matters, of course, as does health
I don’t know why StreetEasy thinks this loft is "2,100 sq ft", when it thinks that the other non-penthouse lofts here are in the narrow range of "1,771" to "1,850 sq ft" and our inter-firm data base counts this one as "1,800 sq ft". You will see that this 300 sq ft "difference of opinion" is significant, in comparing #2A to the other loft of the floor, which sold in July 2007 at $2.2mm (StreetEasy and our data-base agree that #2B is "1,816 sq ft"). I am going to assume that #2A is "1,800 sq ft", particularly as the floor plans for #2B and #2A have dimensions and spaces that are closely equivalent. (Sorry, I find no ‘public’ floor plan for #2B, but I did find one in our data-base.)

At "1,800 sq ft", the #2A sale for $2.25mm on March 11 is a healthy $1,250/ft, healthier still when compared to the June 2009 sale of #4B at $933/ft ("1,831 sq ft", per our data-base and StreetEasy, for $1.71mm) and that July 2007 sale of #2B at $1,211/ft ($2.2mm, "1,831 sq ft", as noted). But throwing that July 2007 sale of #2B into the mix (against which the recent sale of #2A holds very well) raises the problem that #2A also sold in 2007.

reconciling 2007 (not)
The February 2007 sale of #2A at $1.87mm and the #2B sale in July 2007 at $2.2mm cannot be reconciled in a rational market. Let’s repeat that the two units are essentially the same size and that each was built new in a "luxury" condo loft conversion in 2002. Let me also point out that #2A has a significantly ‘better’ footprint, with two long walls of windows, the windows being described as 10 feet high, but which also appear to be even wider than they are high; in contrast, #2B (trust me) has less than half the length of windows, with those widows being on opposite and narrower walls. So, into the weeds we go (again).

That #2A sale in February 2007 was done without having been offered through a REBNY firm and (intentionally or not) seems to have been Below Market, at least insofar as the open-market sale of #2B in July established a market value for the second floor of this loft building at around $1,211/ft. I have no idea if the February 2007 #2A sellers and buyers knew each other, or if they bargained hard to maximize their individual interests, but the fact is that the less desirable layout of #2B sold for about 18% more 5 months later. (Not to go completely nuts here, but the respective broker-babble suggests that it is possible that #2B had some improvements that #2A lacked, with "custom book-shelves" and  "state of the art sound system", but any such improvements can’t make up a $330,000 difference in price/value.)

2008 throws a curve, with a view
I told you there’d be peculiar comparisons to other sales within this building…. Here’s one from July 2008, just 6 weeks before The Fall of the House of Lehman and the subsequent freeze in the Manhattan real estate market. #9A is described in much the same terms as #2A (by the same agent), with the same foot print and the same window array as #2A. In other words, any difference in value between #2A and #9A should be based entirely on what you can see 85 feet higher out all of those massive windows (for one thing, you are looking over the dome of the Police Building and beyond, not into its windows). If you’ve already clicked on the #9A listing history you know that there was a huge difference in value being 85 feet higher, as the (very near Peak) price of #9A was $2.75mm.

a grand unified Solita theory?
In rough numbers, if you took the July 2007 #2B sale as indicating that #2A should have been worth about $2.2mm then, and then push that notional July 2007 value to The Peak about 9 months later, you can ballpark the peak #2A value at about $2.4mm, accounting for the view premium of #9A as about 15%, or $350,000. That actually makes sense to me.

Granted, it takes making a few assumptions, and the key one being that the February 2007 sale of #2A at $1.87mm did not accurately reflect The Market. But if you don’t make some assumptions, the Hard Cold Facts are that the #9A views and 18 months of ‘froth’ account for #9A being worth $880,000 more in July 2008 than #2A was worth in February 2007, a premium of 47%. I don’t buy that (so to speak).

I believe that all of these data points in this building can be rolled into an approach to the transaction history for this building that is coherent and inclusive from 2007 to now if we can ignore (or adjust) that #2A sale in February 2007:

More or less, the recent #2A sale was a ‘strong’ sale based on the layout and light and (compared to #4B in June 2009) is an example of a recent sale above the Frightened Market phase of early 2009; more or less, the recent sale of #2A compares to the #2B 2007 sale, putting this (almost) paired resale into the more-or-less-flat bunch in the collection of 2007 recent resales in that March 5 post; more or less, #9A traded in the active part of 2008 at about a 15% premium because of the view.

None of this more-ing or less-ing works if you have to squeeze the February 2007 sale of #2A into the story. I choose to consider it an outlier.

© Sandy Mattingly 2010