agent sells 15 Broad Street loft after 3 years with no discount
boat floated on a rising tide?
It is easy to miss the punchline by looking at the Streeteasy history of the recently sold “2,028 sq ft” Manhattan loft #2014 at 15 Broad Street (Downtown by Starck), as StreetEasy shows a clean and brief recent history: to market January 23 at $1.775mm, in contract by March 21, sold for $1,757,500 on April 23. Zoom! And ka-ching!! The “previously listed” data starts in 2010 and is just two lines. Click on that however, and the whole picture changes. No longer zoom! and that ka-ching!! takes on a different value when you realize that the loft had been offered for sale from May 2010 into December 2011 at $1.75mm without selling.
Charitably, you’d say the seller was right about the price all along, just wrong (at first, and for a long time) about the calendar. After all, The Market rejected this loft at $1.75mm for 18 months before embracing it quickly at $1,757,500. Loft #2014 demonstrates that The Market in 2011 was different from The Market in 2013, though it does not tell us (as a single data point for an unsuccessful “sale”) the degree.
I will get back to the fact that the seller is an agent (the listing agent in the first offering, and one of two listing agents in the second go-round). For now, note that even professionals can be over-optimistic about how well a loft will be received, and stubborn in the face of persistent and clear market feedback. Fortunately for him, the seller (agent) obviously did not have to sell in 2010 and 2011, as he offered it for rent in 2011 and took it off the sales market upon being rented in December 2011.
The fact that was offered “furnished only” suggests that this had been his residence, and that he kept open the option of returning one day. Indeed, I wonder if he moved back in during 2012 after the tenant moved out. That would explain not being on the sales market in 2012.
playing with number for fun (no profit)
Whether or not the rental was a positive cash flow experience depends on how much he borrowed up front and (especially) whether he re-financed, even at the last asking rent of $8,495/mo. Taxes (abated) and common charges were $1,832/mo most recently, and he paid $1,420,458 to buy it in May 2006. Prevailing mortgage rates were around 6% in those days, driving an 80% mortgage payment to about $6,600 and a 90% mortgage payment to about $7,400. Not making any money there on a cash basis, without re-financing, or putting down more. And even if he got a break from his firm, he may have been paying a fee to an agent who brought the tenant.
neighbor v. neighbor
It looks as though the #2014 seller was paying attention to what his neighbor 12 floors below was trying. Loft #814 is trivially larger (“2,039 sq ft”) with the same footprint. Loft #814 has a pair of wine friges (is that a word??) and some customized storage, but otherwise seems to be the same high quality finishes as #2014 and the other units in the building, the babbling about being “unlike any apartment at 15 Broad Street” aside.
That loft had been on the market for almost 8 months, at decreasing but (still) unsuccessful prices ($2.25mm, $2.15mm, $1.995mm), when #2014 came back to market in January. My guess is that the #2014 ask of $1.775mm as of January 23 was an attempt to use the higher-and-unsuccessfully-priced #814 to get a quick deal. The calendar will tell you that it worked for #2014 (contract in 8 weeks), but the calendar won’t tell you the whole story.
The #814 seller sat in the market at $1.995mm from September 8 until getting a contract by February 15. But that contract was at $1.85mm, compared to the March 21 contract that #2014 finally got at $1,757,500.
Maybe the wine refrigerators and the custom storage do add significant value to #814. After all, the much higher #2014 (boasting “exquisite sundrenched WESTERN city views”) went head to head for 3+ weeks, and lost. That #814 buyer had the opportunity to buy #2014 for about six figures less than the deal for #814, but preferred #814.
why do agents do that (or, don’t do this)?
You can read two sets of broker babble by the agent / owner (now seller) of #2014 without discovering that he was the agent / owner. I don’t get that.
We’ve been here before, so you probably recall that New York State does not require that the fact of agent ownership be disclosed in the listing description, though it does have to be disclosed. (See my June 7, 2012, agent sells Chelsea Mercantile loft from San Francisco, and May 24, 2012, 40 Mercer Street news: nothing says successful new development like a 7-figure gain since 2007.) I can’t figure out why an agent wouldn’t disclose that in the broker babble, eliminating any possible claim that a buyer was not informed, but I guess that’s just me.
I also don’t know why, with all the major Manhattan residential real estate firms bringing heightened scrutiny on compliance with agency disclosure rules (see my very recent May 16, OYAToMLG dual agency was in the news), firms don’t mandate that as a matter of fail-safe policy. But I am not involved in management at any firm.
© Sandy Mattingly 2013