living to riff
One of my favorite types of Manhattan Loft Guy posts involves looking at the impact of outdoor space on a given Manhattan loft sale; if I don’t always link to The Mother Post of that type (the may 6, 2010, riffing with The Miller on the value of Manhattan terraces, decks + balconies) (as I should), I hope by now it is clear to all that I am hugely in debt to The Miller for having systematically addressed the value of outdoor space in his blog. As regular readers know, and as you can easily see in the links, in order to value outdoor space for a given property you need a baseline for the interior space. In a condominium like The Petersfield, a 1987 conversion to residential lofts, that task is supposed to be easier than in a coop, because there are (supposed to be) better ‘official’ size measurements. The difficulties I have had with the most recent sale of a penthouse in The Petersfield, #8F at 115 Fourth Avenue, show that this process is not always as easy as it should be.
Let’s look at the fun stuff (the lovely loft) before getting depressed over the hard stuff.
wonderful light + custom storage does not qualify for mints
The listing photos substantiate this bit of broker babble: “[a]ll rooms face south with wonderful light ”; but they also establish that the wonderful light from the south does not come with a wonderful view. (that would be the 13-story residential loft coop at 111 Fourth Avenue out all of the south windows). The listing photos, especially pic #2, also establish that the babble undersells by not mentioning the great east light in the living room with apparently open views.
It is hard to tell how mint-y the finishes are, except for the fact that the babble is pretty restrained (“oversized kitchen with granite countertops[,] abundant custom closets with terrific storage [,]… massive walk-in [master] closet with floor to ceiling storage…[,] multi-zoned air-conditioning”) and it does not mention mints. Granite aside, the bragging is about custom storage. While not a foolproof method, the absence of enthusiastic and detailed bragging about finishes is usually a sign that the loft is nice (“move-in”) without being special, especially with no proper proper name dropping.
The floor plan (from Corcoran, as it is oddly absent from StreetEasy) shows a simple 2-bedroom, 2-bath layout, with a long angled walk past the second bath and kitchen before the loft opens up into the southeast living room and the “oversized sun flooded windows” that take advantage of the 12 foot ceilings. Neither bedroom is especially large, especially for a loft said to be “1,800 sq ft”, and there is an office at the top of the circular stairs, leading to the “400 sq ft” “decked and planted private rooftop terrace”.
If it is not quite fair to say that The Market loved this penthouse loft, it liked it a lot, at least as measured by days and dollars. Loft #8F came to market at $2.795mm on February 9, went into contract by March 21, and closed on May 2 at $2.65mm (since it is a Corcoran listing and our system has no mention of a price change I assume that StreetEasy is wrong about the initial price being lower for a few days).
Love or like, that is a successful campaign. Which leads me to wonder about how much value the terrace added. Which leads me to moan about rulers. (Readers who do not need the anal detail can skip the next 4 paragraphs without remorse.)
mis-matched feet, everywhere I look
Do you see the “1,800 sq ft” in the listing description? Can you find it in floor plan (even roughly by adding interior room dimension for the south rectangle and estimating the rest)?? But “1,800 sq ft” is what our listing system says. The numbers, as they say, do not add up, but (as they also say) “dimensions are approximate[; f]or exact dimensions, you must hire your own architect or engineer”.
Now look at the deed record associated with the closing on May 2 at $2.65mm: “1,200 sq ft”. I used to think that Streeteasy took such deed numbers from the New York City ACRIS system, which (I thought) took them from a Condominium Declaration, where available.
For those of you who can view ACRIS documents, page 27 of the 86 page Condo Declaration for The Petersfield is the page of the Exhibit B with “area in s/f” and, in the case of the penthouses on the 8th floor, a field for (spelling things out) ‘area excluding stair bulkhead and private terrace’. For #8F, the Condo Dec has “2,268 sq ft” in total area and “1,445 sq ft” of area excluding stair bulkhead and private terrace. Look at the floor plan dimensions and see how closely the roof numbers fit the 823 sq ft that the Condo Dec says comprise area stair bulkhead and private terrace (for those without patience, I get round numbers of 220, 149 and 285 for the 3 deck areas, 66 for the office; if the entire bulkhead is 8’6” x 20’ [look at the floor plan: it fits], the numbers come out as close to exact as you could reasonably want).
Which does not answer the question why Corcoran thinks the loft has “1,800 sq ft” of interior, or why StreetEasy thinks it is only “1,200 sq ft”. But this exercise shows that the 8th floor and rooftop measurements on the floor plan line up really well with the Condo Dec at “1,445 sq ft” on the 8th floor and 823 on the top, including the entire stairway bulkhead.
apples to apples, feet to feet
The key to valuing the outdoor component of a loft is, as noted, to start with an interior value. The Miller would compare the interior space on the main floor of penthouse #8F with past sales at The Petersfield, then (if he were working forwards) estimate the value of the roof deck as a percentage of the interior, starting from a ballpark range of 25-50%, all as stated and analyzed in my May 6, 2010 post up top and The Miller link in there.
The last 3 public sales at 115 Fourth Avenue (that excludes #8D) were all in the first half of 2011; each has different sizes on StreetEasy in the listing and the deed record (smaller), and each has a different (smaller still) size in the Condo Declaration (on page 25 of 86), so to be consistent with #8F I am using the Condo Dec numbers and will leave for another day (perhaps never to come) when I figure out why the friggin’ numbers in this condo are so friggin’ different….):
One of these things is not like the others: #2D is described as in “original but in very good condition”, while #3G drops words like “flawless”, “triple mint”, and even “anti-bacterial” and #3J claims a 2-year-old “major renovation” and also sues spiffy language. These descriptions in the babble are broadly consistent with the values achieved, and (after all) we are just ball-parking here….
You already know that #8F was not babbled as enthusiastically as #3G or #3J, but if we can reasonably ballpark all 3 lofts in the same value range (adjusting #8F down for condition but up for light and views seems a reasonable trade), we get the interior value for the “1,445 sq ft” of #8F as $2.128mm (using roughly the $1,473/ft midpoint of #3G and #3J).
loving to riff
if we were to do this frontwards, using The Miller’s starting point range (outdoor space as 25% to 50% of the value of interior space) would give a range for the 823 sq ft on the roof of $300,000 to $600,000. The Miller would look at factors such as proportion (this terrace is more than 50% of the interior, so not quite as valuable on a $/ft basis) and utility (this terrace is not ideal, as you have to go in circles up the stairs), while I suspect he would also consider added view and scarcity (certainly, my idealized internet vision of The Miller would do that). Let’s say that this roof is within The Miller’s range, but just a little bit closer to the bottom than the top, because of (a) overly-large proportion, (b) less than ideal utility, (c) no evidence of a better view, but (d) the likelihood that there are not many private roof spaces in the general neighborhood. I am going to call the net of those factors at 35%, as a ballpark number.
But because this entire exercise involves a closed sale, we know what the loft sold for in the open market: $2.65mm. We ballparked the interior #8F space at $1,473/ft, using #3J and #3G as comps on standardized Condo Dec sizing:
We ballparked the rooftop space at 35% of the interior value on a $/ft basis, yielding for the 823 sq ft up there:
We are about $100,000 short of the actual purchase price, but we have just been ballparking here. If the interior space valuation based on the #3G and #3J comps is a more solid place to start, then the observed roof value was $521,515, which means we should have ballparked the rooftop space as worth 43.85% of the interior. Still within The Miller’s starting range.
But we are just playing with numbers here, right?
who gives a ___?
I hate this ridiculous uncertainty about how big this condo loft is. It surely looks to me to be smaller than the listing’s 1,800 and bigger than the StreetEasy deed 1,200, and in a delightfully Goldilocks place that matches the Condo Dec at 1,445 sq ft.
The seller probably does not care exactly how big the loft is, inside or out, so long as it sells for an acceptable number (obviously, it did). The buyers may not even care, so long as they deem it a good use of their scarce dollars by comparison to what other lofts they could buy that also meet their needs. I am not sure the mortgage lender cares (so long as the comps are good at this sale price), but I have seen appraisers who care, as they feel compelled to use hard data to find real comps. Bless their hearts! I also care because (d’oh) I try to make sense of The Market, and (call me naive) it is impossible to make sense of the market without such data.
The recent buyers have no mortgage in their list of title documents on Property Shark (scroll down about one-third), but that may just be a filing delay. If they got a mortgage, their lender had it appraised. If it was appraised, the appraiser (should have!) measured it. regardless of precise measure, the appraiser needed to find comps with indoor and outdoor space, or do a Miller riff with same-building data. I would love to see an appraisal on #8F, to see (a) how big the lender thinks it is, (b) what comps the appraiser used, (c) what adjustments were made to the comps, and (d) how much of the value the appraiser thinks was due to the outdoor space.
Personally, I am going with $521,515, or about 20%.
This has gotten way too much into math (and
guesswork ballparking) for a Friday, let alone a holiday weekend Friday afternoon to (unofficially) begin Summer. Is that sun I see out the window??
© Sandy Mattingly 2012