but lots of energy
Under what circumstances might it be a good deal for a Manhattan loft seller to sell 24% lower than a similar loft that sold just 6 months earlier, when that similar loft was on a lower floor and required a renovation of half work/half residential space for full residential use? In the case of the “2,131 sq ft” Manhattan loft #9E at 50 West 29 Street, those circumstances include that the loft was in somewhat primitive condition, with a floor plan funky enough that an Alternate Layout was proposed that changed some angles and moved the kitchen, and that it had been on the market for more than 8 months before selling at $1.7mm on Lincoln’s actual birthday.
The contrast was with the mixed use “2,286 sq ft” loft #7E, which had been asking $1.8mm but cleared at a rather astounding $2.136mm on August 30, which needs to be integrated to create a fully residential loft (but the now-residential half was “completely renovated”), and which boasted all-day sunlight and “spectacular” city views from 3 exposures and 17 windows. In other words, this slightly larger slightly lower neighbor was half ‘done’, with a fairly clean build-out needed to integrate the half (present) office use into full residential use, easily done with the addition of a bedroom.
You won’t see the main reason why $1.7mm for #9E should have seemed like a good deal in any of the marketing materials. By the time that my buyer saw #9E, potential development plans for the adjoining lot to the east were public that would probably so change the light and views on that side of the building to make the current and proposed Alternate Layout untenable.
first the bad news, then the BAD news
You have to go to the Corcoran site to see the current #9E floor plan, though you can see the Alternate Layout there and on StreetEasy. Judging from the dated feeling from being in the space in real life, especially of the kitchen and baths, this loft has the look of one that was laid out with a single bedroom at the south end, with that diagonal wall, with the rest of the loft originally open; only later, I am guessing, were the two bedrooms added at the north end. This bedroom-bookends layout works in the classic Long-and-Narrow footprint only because of the 4 very wide east windows, bringing light into the public space in the middle of the loft. The bad news is that the entire loft needs updating, if not a gut renovation. The bad news is that the current allocation of space (no matter how well renovated) will not work in the future.
Sometime before #7E closed at the end of August, demolition permits were filed for the two 4-story buildings to the east, with the rumor circulated that a hotel would be built on the site. I don’t know what information was publicly available (to someone who diligently dug in the right places), but it appears likely that there was nothing to see (but much to fear) when the #7E contract was signed by July 12. By the time my buyer became seriously interested in #9E, the hotel cat was out of the bag, with the discussion topic being the interplay of mass, height, setback and F.A.R. regulations under different scenarios, with the very real risk that the east lofts at 50 West 29 Street would lose most east windows up to some height (probably including the 7th floor and possibly including the 9th floor) and that some east windows above the to-be ‘bricked-up’ level would likely face a hotel tower wall.
In the most likely best case scenario involving loft #9E, both sets of east windows in the middle of the loft would face a nearby hotel wall, with the east windows at both the north and south ends possibly retaining a sliver of view and light, either in front of or in back of the hotel tower at this height. Hence, the option of keeping the living and dining rooms and the kitchen in the middle of the loft would be far less attractive, with the most logical place for the public space (assuming a renovation complete enough to erase all the lines and begin fresh) would be at the north end, with its wonderful light and Empire State Building views.
An owner who wanted only bedrooms with windows would then put two across the south end, exactly as so many classic Long-and-Narrow lofts with windows only front and back are set up. (An owner with an appetite for interior sleeping areas could retain a wide master suite at the south end, and string one or two interior rooms along the east wall.) The planned hotel changed the calculation for people considering buying it and living with it as presently configured, people who might have an appetite for a small-scale upgrade (freshening up the more primitive elements) upon moving in, and a plan to afford a more extensive renovation down the line. No one who wants light in the public area could leave those bedrooms in the front of the loft, once the hotel possibilities were known.
timing is, as they say …
The #7E sellers got out at the latest possible good time, obviously at a price that far exceeded their expectations. The #9E sellers were just a few months too late on the draw. The difference is dramatic, $416,000 in hard dollars, or $934/ft v. $798/ft. Looked at from a different perspective, the #9E buyers negotiated knowing that the always-at-risk lot line windows that flooded the loft with eastern light were likely to be substantially blocked, and paid accordingly; while the #7E buyers got bid up in an environment in which the eastern risks were only theoretical, with the specific pain of paying for light and views present when they signed the contract that were no longer likely when they bought the deed.
You have heard the expression that it can be better to be lucky than smart in real estate; assuming those #7E buyers exercised appropriate View Diligence, perhaps it can be worse to be unlucky than ignorant.
I like that “view diligence” locution a lot; it captures the issues and the context. Given that Manhattan lofts tend to be in Manhattan neighborhoods that are / have been / or will be developing (by definition: the buildings had prior non-residential use), this comes up a lot. Last time I hit it in a comprehensive way was in my January 24, 2012, banging the View Diligence drum (again), for Glass Farmhouse loft views from 448 West 37 Street, which has links to no fewer than 7 prior manhattan Loft Guy posts that are relevant. At least one of those links has a what-to-do-if-a-potential-bidder angle; all, of course, are fascinating.
about the energy in the sub-head…
There is a striking thing about loft #9E that is not apparent from the listing photos. In fact, it is such a memorable thing about the space that I shared a chuckle with somebody months later who had also seen this loft; I don’t remember who, or how #9E came up in conversation, but one of us asked the other if we “felt the energy” in the space.
If you look in the main listing photo you see a glass topped coffee table in the living room, resting on two very large stones that have been sliced open to reveal crystals. It seems as though there were at least 50 other crystals in the living room, none quite that large but of varying sizes. That is not my thing, but was clearly a big deal to the recent sellers. Alas, all that energy did not help them sell….
© Sandy Mattingly 2013