darn 2006 flipper ate up all the profit of 15 Broad Street loft

fasten seat belt, please
The story of the recent resale of the Manhattan loft #1202 at 15 Broad Street (Downtown by Starck) begins in 2006, when the loft was sold by the developer. Remember those days of froth? First buyer paid $535,730 on June 16, 2006 for this “943 sq ft” loft in this over-amenitized condo conversion across from both Federal Hall and the New York Stock Exchange. That buyer had all the fun, as the unit was flipped very well and very quickly, with a resale recorded on October 23, 2006 at $872,000. Without considering the sell-side transfer taxes and other expenses, the flip took 4 months to net $336,370. That’s +63% if you are scoring at home.

But that was then, and this is now. In “now”, the buyers who got flipped into $872,000 five years ago just got out. I bet you can see where this is going, but you might still be surprised by (a) how far it went, and (b) how long it took to get that far:

(I have omitted the first part of the listing history from StreetEasy, as our database has it active with that first firm at that first price for only 6 days before going off the market for 6 weeks until the second firm stepped in at $975,000; I have also omitted the 3 times it was on hiatus for a total of 8 weeks over the past year .)

Note that the sellers never dropped their asking price below their 2006 purchase price, but ended up having to accept the much lower value that the 2011 market offered. Note also that although the recent resale was down 12% from the outside market value in 2006, it was up 44% over the 2006 sponsor sale, and that the sponsor sale was (according to our data-base) from a September 2004 contract, signed well before the building was completed enough for units to be sold.

does the loft care if the owners get squeezed?
This sequence of values at 15 Broad Street is a variation on a theme I noted in my August 9, agony + ecstasy at 65 West 13 Street loft, in which I noted the different ways to describe a bumpy price history, comparing the loft’s history to each owner’s experience. In that case, nearly all the market appreciation in that loft from 2006 to 2011 went to the 2009 buyers, whose sellers had been 2006 buyers and who saw essentially no gain from 2006 to 2009:

If I were writing just about lofts I would say something like when the Manhattan loft #8D at 65 West 13 Street sold on July 6 it was up over 40% from its prior sale. And from the one before that. But I also write about loft owners, buyers and sellers, so I would also say something like when the people who owned the Manhattan loft #8D at 65 West 13 Street from 2006 to 2009 sold it, they wanted to achieve what their buyers did not set out to achieve: a three million dollar sale.

Timing, as they say, is everything.

The 65 West 13 Street loft appreciated 40% in 5 years; loft #1202 at Downtown By Starck appreciated 63% [oops: 44%] in 5 years (7, if you count from the new development contract date). But the 2006 buyer on West 13 Street chose to sell in a terrible market (more likely, was compelled to sell in a terrible market) and took a tiny loss on selling in 2009 (0.04%), leaving the 2009 buyer to reap the huge gain 2 months ago. The (first) 2006 buyer on Broad Street flipped immediately and very profitably, leaving the (second) 2006 buyer of the loft to re-sell at a 12% loss 6 weeks ago.

I noted in that August 9 post another loft with 3 sales 5 years apart, with yet another variation on the theme that a loft might show a net gain over the 5 years, but the distribution of that gain between the sequence of sellers can vary dramatically. In that case (in my January 6, 345 West 13 Street loft is candidate for sale of the year, but the year was 2009) the loft was up 13.5% in 5 years, but the December 2005 was obviously forced to sell into a terrible market and got slaughtered (selling at $3mm in June 2009 what had been purchased for $3.875mm), while his buyer won the jackpot (selling at $4.4mm what had been purchased 18 months earlier for $3mm).

Timing, as they say, is everything. And repetition is the mother of memory. Hope this helps you remember that ditty about timing.

I will close with another bromide. The Market is like Life: not fair.

© Sandy Mattingly 2011