173 MacDougal Street loft zooms through market, into stratosphere

do you want to see a developer with a Napoleon complex?
Looking at the different resulit from when the sponsor tried to sell this spectacular “2,266 sq ft” Manhattan loft #4E at 173 MacDougal Street in late 2008 and 2009 (finally selling below $3.9mm) and when those original buyers just flipped at $4.6mm in no time at all, an image of The Emperor’s troops struggling through the Russian winter to get home comes to mind. For that developer, optimistic in warm weather, the result after a nuclear winter is carnage, sheer carnage:

Long-time readers of Manhattan Loft Guy know that I have talked before about it being better to be lucky than good (or smart) in Manhattan residential real estate. (In other things, too, of course, but let’s not digress.) A developer who got all units of a new development locked into contracts before Lehman’s bankruptcy that closed might have been brilliant in market timing, or might have been fortunate enough to have his construction people finish on time. A developer who did not launch a sales campaign until one month before Lehman’s bankruptcy? Perhaps that project was unavoidably delayed, despite the best of intentions, or perhaps the developer hit the schedule as planned, and market forces, like excrement, just happened.

For 13 months, the developer of the MacDougal Lofts held out at $4.725mm, like the Little Corporal held out hopes that his crack troops would take Moscow. Dropping 17% in asking price was a tardy about face for the developer, which was successful in getting (at that late date, months after the overall Manhattan residential real estate market was in a spring thaw) a contract at a tiny discount.

(Excrement) happens. And there was blood in the snow that (nuclear) winter. Cue the Quaker oats theme song, and pity the developer.

A loft that sold for $4.6mm in 2011 would likely have sold for that value, more or less, in 2007, as indicated in the review of paired 2007 – 2011 resales in my September 27, is the Manhattan loft market back to (up to) 2007? 61 repeat sales say “probably”, “a bit” (the associated spreadsheet is up to 78 such pairs). Such a loft would probably have sold at the peakiest moment for even more, perhaps at $4.725mm or above.

This developer was not wrong in 2008, at least not about price. Wrong about the month. Merde!

a remarkable level of … errr … sincerity in this babble
I see no difference in condition in the brand new in 2008 loft and the loft as it sold last month, either in the pix, the floor plan, or the broker babble. Indeed, it is rare to see a loft described in such similar (identical!) terms two years apart by two different teams of agents. Just clicking back and forth between the two sets of babble; if there are differences in text they are so minor that they escaped my notice. (Indeed, I checked the inter-firm data-base to confirm that StreetEasy did not mistakenly copy the text from the original listing into the flipper’s tale.)

The building is in a prime location (“first and last doorman loft condominium offered within one block of Washington Square Park”, “with the most spectacular views in Village”). The loft is beautifully rendered (these are only some highlights):

massive floor-to-ceiling 10’ by 10.5’ windows … bespoke English kitchens by Smallbone of Devizes … wide-plank Brazilian Cherry floors, glass-enclosed limestone fireplace, 4-zone Crestron system with IPOD docking station, in-ceiling stereo speakers with automatic lighting controls, video touchpanels with electronic access … 3-zone radiant heated floors … Spa Master bath … white slab carrerra marble and walnut cabinetry, steam shower with a custom teak bench and 6’ Kohler cast-iron bathtub ….

Was this appropriation of text insult on injury? The highly successful flip not only confirmed that the sponsor was right about the price (though wrong about the month), but that the loft was described in a way that should have attracted the right buyers in 2008. Had those buyers had the confidence to act, or if such buyers even existed in late 2008. The Market is cruel, indeed, like a Russian winter. Merde!

Perhaps I will return to put these two sales in the broader context of building sales, then and since, but I need to leave to go to a real estate bar camp. A bientot, mes ami.

© Sandy Mattingly 2012