private loft sale at 150 Nassau Street might be an arm’s length deal

or not
Already a Manhattan Loft Guy fave building, the newest sale there is an apparently private, possibly arm’s length deal transferring the “1,793 sq ft” Manhattan loft #16C at 150 Nassau Street from an Inc. to an LLC for $1.7mm. This is a “[n]o listing associated with this closing” on StreetEasy, nor is there any information in our system. Fascinating stuff, for among other reasons that this is the second private sale in this price range in the not-really-FiDi-but-what-else-are-you-going-to-call-it building (GehryVille?) in the last year. I have to assume it was an arm’s length deal especially because there is a way to fit this sale comfortably within comparable sales in the building (i.e., it looks like fair market value); more circumstantially, there is no obvious connection between the Inc. seller and the LLC buyer from the deed record as there sometimes is (same addresses or lawyers, similar names).

The last time we were here, we celebrated a building record that was set just two floors below this recent sale. In my August 31, market for 150 Nassau Street lofts is en fuego, as another record falls, that building record was on the back of a faithful Manhattan Loft Guy reader who was outbid for the the “1,798 sq ft” Manhattan loft #14C as he was about to sign a contract. The time before that that we were here was to … (wait for it) … celebrate a building record that was set just 3 floors below this recent sale, in my February 20, 150 Nassau Street loft sells for building record, about the sale of loft #13C at $1.73mm 9 months ago.

game theory
Let’s assume that you are the Inc. that owned loft #16C and that you were in conversation with an anonymous acquaintance with an LLC and an appetite for your loft. You both want to be fair (ha!), but you both (especially) want to get the best deal you can get, from your own perspective, of course. The Inc. potential seller points to #14C at $1.842mm in August as the best (most recent) building comp, and suggests that the LLC potential buyer would do well to buy at that price to avoid a public marketing campaign that might result in a higher price to a different buyer.

The LLC potential buyer would prefer to average the last two sales (#14C at $1.842mm and #13C at $1.7mm) to get an idea of the 2012 market value, but also plays the “avoid a public marketing campaign” card by pointing out that the Inc. would be on the hook for a sales fee if #16C were publicly marketed. The #14C at $1.842mm put only $1,731,480 in his pocket after paying a 6% fee; and the #13C seller at $1.7mm put only $1.598mm in his pocket after paying a 6% fee.

They might both be right, and they might both prefer not to push the other party to find out through a public marketing campaign. So they compromise: the LLC potential buyer puts $1.7mm on the table, which the Inc. potential seller accepts and pays the other typical expenses that selling condo owners pay other than a sales fee.

Win, win, indeed. Aside from real estate agents, alas.

now an even more fave fave
In addition to the two 2012 posts in the building cited above, my fascination with this beautiful building was explored in my

• December 28, 2011, did your attorney use The Google for due diligence? would help at 150 Nassau Street
• December 14, 2011, private sale of 150 Nassau Street loft with high-floor premium or neighborly extortion
• January 10, 2011, 150 Nassau Street mini-loft sells at about 2004 pricing
• November 28, 2010, bass ackwards at 150 Nassau Street?? as lofts are sold low + bought high, with an agency twist

That December 14, 2011 was about the private sale of the “1,723 sq ft” Manhattan loft #19A to the upstairs neighbor on November 21, 2011 for $1.65mm ($958/ft). Note that loft #16C just sold for $948/ft, without the huge leverage of being underneath (or next door to) the buyer. Purty good.

I have to assume (hope?) that by now the building facade repair and water main issues on Fulton Street have been resolved since my December 28, 2011 post about due diligence issues that should have been obvious at that time. Anyone know?

© Sandy Mattingly 2012