59 John Street loft seller takes forever to take a bath

if at first you don’t succeed …?
The guy who paid $1,527,375 for the “1,651 sq ft” newly converted Manhattan loft #8C at 59 John Street in 2007 may never have thought that he was going to make a lot of money when he sold it, but he did hope to make some. he first hoped to make some money on a resale in 2010. And 2011. When that did not work, he came back in 2011 at a price that would accept a loss, but even that did not work until a few price drops and many more months went by. He eventually left his shirt behind, finally selling a month ago at a 10% loss.

Here is a picture of sadness, in paint by numbers fashion (omitting a few brief periods off the market):

For those scoring at home, that’s 19 months of active marketing to get a contract, with 7 asking prices, to result in a sale 9.6% below what he had paid, before considering that he also had to pay New York City and State transfer taxes on the way out (another 1.825%). And a final sale price 15% below that first asking price more than two years ago.

tough environment for resales
In the period that the #8C owner was trying to become the #8C seller there have only been 4 sales of larger units in the building. None of them suggested that the #8C pricing was on the right track, until the very end.

The much larger (“2,279 sq ft”) #10C sold on December 16, 2010 for $2.2mm, only $965/ft before adjusting for two good-sized terraces. The slightly larger #11B (“1,856 sq ft”) sold for $1.7mm on February 28, 2011, or (only) $916/ft. By the time of that last sale, #8C was still asking $969/ft, a price The Market was not willing to meet, or approach.

More recently, #8C had to compete with the identical unit two floors down, as #6C was being offered from $1.495mm to $1.425mm from September 2011 until that unit found a buyer who would sign a contract in April 2012. That deal at $1.35mm closed on May 4 as a very public marker that #8C should not be expected to do much better. The last relevant resale in the building was #3C, which appears to have sold in a private deal on June 13 at $1.39mm; it might not be a coincidence that the last #8C price drop was on June 12, down to $1.39mm. Despite the lower floor sales at $1.35mm and $1.39mm, it still took #8C another 6 weeks to find a contract while asking the #3C clearing price of $1.39mm, and that deal was at a slight discount.

Prices discovery, like comping, can be hard. And painful. Particularly if you paid about $50,000 more than the original #6C owner did to buy, or $127,000 more than the original #3C owner did to buy.

beating a metaphor to death
This is not the first Manhattan Loft Guy post for a (hate the name) Five Nine John Lofts sale. My July 6, 2009, last sponsor sale at 59 John Street / folding tent + closing wallet, touched on the very last of the sponsor sales, at a (no surprise) price that was probably more depressing for the early 2007 buyers than for the sponsor. After all, the sponsor was at least (finally) done, while the 2007 generation of buyers were stuck with (another) bad sales comp.

But at least the sponsor can close the books (lick his wounds? metaphors abound!). The sales office has long since been closed; even the building website has been taken down. Happy or not about a clearing price that was 53% of the original ask, the developer must take some solace in selling the "last sponsor unit". Even if the other penthouse owners love living there, they are probably more … conflicted … over the new sale.

In contrast, the buyer of that last sponsor unit 3 years ago, and the buyers of the three “C” line lofts to sell this year, are better able than their neighbors to handle what future market conditions will bring to Five Nine John Lofts.

By the way, whether that darn tropical storm that devastated so much of low-lying New York City, including the immediate environs of 59 John Street, will have ramifications on future market values of FiDi lofts obviously remains to be seen. I don’t see this building in the invaluable Curbed tracking of building status, so I suspect that this building ‘merely’ lost power. Stay tuned to Curbed and elsewhere on the intertubes as more info becomes available.

© Sandy Mattingly 2012