loft on top of 303 Mercer Street sold with a very expensive roof deck

meanwhile, back at Snug Harbor …
Now that I have gotten that record-keeping rant out of my system and onto the intertubes (May 30, did it really take 3 contracts to sell top floor loft with private roof at 303 Mercer Street for 99.3% of ask?), the loft that provoked that rant is worth chewing on for its own merits. Merits that The Market valued highly. Our system has the Manhattan loft triplex with roof terrace #A608 at 303 Mercer Street (in the Snug Cove 3-building coop) at “1,600 sq ft”, which looks more or less right if the terrace is more or less the “850 sq ft” claimed in the broker babble. Those of you who read the rant already know that The Market valued this 2-bedroom loft at $2.975mm. Rough math tells you that this is well over $1,000/ft even before riffing with The Miller to separately value the interior and outdoor space.

You also already know that something happened to these sellers, as the loft was so newly renovated “that [it] has yet to be lived in”. The floor plan shows that this is more a duplex-plus-roof than a triplex, with the public interior areas (living room, kitchen, dining room, half-bath) on the “main” level, two bedrooms with en suite baths on the lower level, and just a bulkhead housing the stairway in the middle of the private roof deck on the top.

The renovation is of the no-detail-overlooked variety, with custom-this and custom-that, as well as proper proper names. This bit of history is always a nice touch in the broker babble, but I don’t read “high ceilings” from the bedroom level pictures:

High ceilings and cast iron structural columns remind us of the building’s history as the S,H and P Skirt Binding Company that later was to became the Snug Harbor home for retired sailors.

The floating staircase is open on the main level, contributing (with the 3 exposures) to a very open feel in the 23 foot wide public space. If there is a cast iron structural column in the place, it would be that black thing between the stove and frig, which I took to be a waste line. (It appears to me to be relatively small for a structural column [in diameter], as well as oddly solitary and off-center; but that’s got to be it.) Looks as though it runs through the second bathroom downstairs. To quibble, the entrance is in an unfortunate spot, depriving visitors of a sense of the volume on this level until they have walked around the half bath and laundry and can (finally) turn right to look through the stairway into the living room. But that must be where the elevator is.

market love
Other loft sales in this coop show how much love The Market showed loft #A608. The last sale in this coop that did not involve outdoor space that StreetEasy has full data on was the October 12, 2011 sale of the “1,800 sq ft” loft #B203. At $950/ft, that was market value for a loft in move-in but not mint condition, within a surprisingly small range of the “beautifully renovated” #A205-A206 combination that sold 10 months earlier. I hit that sale in my December 10, 2010, turning 2 "lofts" into 1 "apartment" at 303 Mercer, then selling for $996/ft.

Did you notice the #A608 broker babble about the “architectural statement [that] perfectly blends the feel of a country home in a downtown Loft setting”? The combination in that December 10, 2010 post was even less willing to claim true loft status, in favor of the dreaded “loft-like”:

This beautifully renovated apartment lends itself to gracious entertaining and comfortable family living with its classic yet loft-like proportions.

These lofts were not renovated as well as #A608, and neither had outdoor space. If you take the average of #B203 and #A205 on a $/ft basis and add a generous $100/ft for difference in condition compared to #A608, you get to a ballpark interior value in the building for a gut renovated loft of $1,073/ft. Let’s riff!

You know how we riff; we just did it with a similar sized interior and exterior last week, in my May 25, Petersfield penthouse loft sells with … er … very valuable private roof deck at 115 Fourth Avenue.

breaking the Riff-o-meter
Backing out the market love for #A608 of $2.975mm for “1,600 sq ft” of interior and “850 sq ft” of exterior, we start from that ballpark $1,073/ft for gut renovated interior space, which would allocate $1,716,800 of the market value to the interior, leaving a whopping $1,258,200 for the roof deck. Think about that for a minute.

(waiting)

If that ballpark interior value is anywhere near accurate (based on the #B203 and #A205 sales, and adjusted upwards $100/ft), the exterior space of #A608 was more valuable than the interior: $1,480/ft v. $1,073/ft.

On the one hand, I am not sure that is possible. On the other hand, what is there about that private roof deck to take it dramatically out of The Miller’s typical range of outdoor space being worth 25% to 50% of interior space? (See my May 6, 2010, riffing with The Miller on the value of Manhattan terraces, decks + balconies, if you need a refresher.)

Let’s test out 50%, even though this outdoor space is not directly accessible from any living space and is just more than half the size of the interior.  $2.975mm / (1,600 + 425) = $1,469/ft. But here’s the problem: no sale of a 303 Mercer Street coop without outdoor space has closed anywhere near $1,400/ft.

Pushing the envelope radically, all the way to valuing the outdoor space as on par with the interior space in value, we get $2.975mm / (1,600 + 850) = $1,214/ft. But there has not been a sale of a 303 Mercer Street coop without outdoor space anywhere near $1,200/ft, either.

Provisionally (and unhelpfully), we can say that the “850 sq ft” private rooftop deck added a ridiculously large value to the loft #A608. There is one more recent sale in the building to test as a comp. Loft #A605 is not only on the same floor as #A608, and not only also has private rooftop space, but it was marketed as “a truly magnificent gut renovated 2 bedroom 1.5 bathroom Loft” before it sold on December 27 at $1.775mm. What you don’t know from Streeteasy is that the interior space (a simplex floor plan) is listed in our data base as “1,150 sq ft”, with a terrace that is said in the floor plan to be 30 x 35 feet (1,050 sq ft).

It is difficult, to say the least, to reconcile the December #A605 sale and the more recent #A608 sale. Ballparking the #A605 outdoor space at 50% of the interior value would leave us with $1,060/ft as the adjusted price per foot of #A605, a very far cry from any of the implied adjusted values for #A608 outlined above. At only 25% of the interior, the adjusted value for #A605 goes up only to $1,257/ft. While that notional value is very close to the lowest adjusted value we could come up with for #A608, and that only because we dialed #A605 all the way up (by treating the roof as worth only 25% of the interior space on a per-foot basis) while dialing #A608 all the way down (by treating that roof as worth 100% of the interior space on a per-foot basis). Treating two parts of the same roof in such different (opposite!) ways is inelegant. Or worse.

To be plain: there is no way to rationally value the outdoor space of loft #A608 in a way that is consistent with past sales of lofts in the building without outdoor space, or with the only loft in the building with outdoor space that has sold in similar condition recently. No. Way. At. All.

You could say that the #A608 is an outlier. Or you could say that the buyers overpaid. And you could wonder how a bank appraisal worked for this sale.

wide variety in styles and values
For history fans, I was last in Snug Harbor (before yesterday, I mean) when I wondered about the small apparent gain from 2005 to 2011 in the B wing that shares the elevator, in my January 25, 2011, 303 Mercer Street loft with nothing but potential sells for $640/ft. That post considered a loft that was a real triplex (living space on each of three levels) but in very different condition to #A608. And, as stated in that title, at a very different market value than #A608: $640/ft.

There is quite a range of values in this single coop loft building, with that potential selling at $640/ft, the move-in loft #B203 at $950/ft, the beautifully renovated combination at $996/ft, one gut renovated loft with outdoor space at somewhere around (between) $1,060/ft to $1,257/ft, and another gut renovated loft with outdoor space at somewhere above $1,400/ft.

Repeat after me: comping is hard.

© Sandy Mattingly 2012