when beautiful things happen to high ceilings / 720 Greenwich Street loft sells big after mezzanine re-do

it’s nice when it works
How big does the footprint of the Manhattan loft #1J at 720 Greenwich Street (floor plan here) look to you? Put aside for the moment the high ceilings that permit a mezzanine and do the math; you will see why the listing is coy about size (not mentioning square footage) and why I am impressed at its recent sale price. The footprint is nearly a rectangle, with a bite in one corner offset by a bulge at the kitchen and entry. The interior space in that rectangle is roughly 900 sq ft, assuming the 30’9” long living space does not include the 3’10” wide library (an East – West axis of roughly 34’8”), and assuming the 17’9” wide living space and the 8’4” long office comprise the North – South axis of roughly 26’1”.

I have no idea what the official coop measurement for this space is, but I am very impressed that this (roughly) 900 sq ft of interior space sold easily on December 21 at $1.7mm, especially as it sold at The Peak (unknown to StreetEasy*) in similar condition with a slightly different floor plan for $1.345mm (as in, “only” $1.345mm at The Peak).

How do such things happen?

When last sold (did I mention this was at The Peak?), loft #1J featured (per our listings system):

2 sleeping areas, 18ft barrel vaulted ceilings with industrial-sized windows, open chef s kitchen with granite countertops, Gaggenau stove, Sub-zero refrigerator, and Miele dishwasher, walk-in closet, built-in bookcases, oak floors, exposed brick, custom sound system, closet built-ins [with bath condition checked as “new”]

The reason that the 2008 broker babble sounds like this bit of 2012 babble is that the loft was in (somewhat) similar condition, then and now:

14 1/2 foot barrel-vaulted ceilings, exposed brick and cast iron beams, original columns, hardwood floors, tons of storage, built-ins, and great closet space. The open kitchen with center island has granite countertops, a Subzero fridge, and Gaggenau cooktop. There are 2 full baths outfitted with Hansgrohe and Duravit fixtures, and finished with glass and porcelain tiles

The big ticket item (the kitchen) is confirmed as the same in the photos, with the only change being the color of the walls and cabinet facings. The old babble did not specify the bathroom details and there is no surviving photo of a bathroom in our system, so I can’t tell whether the “new” (single) bathroom as of 2008 was upgraded by 2012.

Of course it is infuriating that the critical detail of ceiling height was described as “18ft barrel vaulted ceilings” in 2008 and “14 1/2 foot barrel-vaulted ceilings” in 2012, especially as those high ceilings permit the mezzanines that account for the biggest difference between this loft in 2008 compared to the recent sale. You can’t see the former floor plan (sorry!) but there used to be a wall making a (real) bedroom in the northeast corner, with a small (8 x 8 feet?) “office loft” on a mezzanine at the south end of the bedroom, plus another similarly-sized lofted area over the kitchen.

The new mezzanine is probably three times the size of the total of the old pair, with a full bath added on top of the original bath. Thus, the loft as sold at $1.7mm at the end of 2012 is larger than the loft that sold at the beginning of 2008 at $1.345mm. Not 26% larger, to match the sales premium from Peak to 2012, but larger by more than a trivial size, and reconfigured as to be much more spacious in feel and utility.

The 2008-buyer-turned-2012-seller traded the former main level bedroom for a mezzanine “sleeping area” on the south wall with a glass wall for a much larger living room, and used more of that (infuriating!) ceiling height along the east wall to add the mezzanine open to the living room below.

new space = (many) new dollars
Trading the much larger single mezzanine along the south and east walls (with that additional bathroom upstairs) could not have been cheap. Based on the stated room dimensions, that new space is something larger than 360 sq ft. I wonder what new mezzanine space costs to build … if $200/ft, that’s only $72,000, which sounds low, considering there is a new bathroom up there. Regardless, based on any reasonable likely cost ($300/ft is only $108,000), the 2008-buyer-turned-2012-seller created a lot more extra value than extra space by opening up the living room by removing the main level bedroom and by replacing two small lofted areas with two walls of mezzanine, including a sleep area and new bathroom.

It is more alchemy than creating something from nothing, but the difference in value 2008 to 2012 was $360,000.

This all worked because the ceilings are high enough, that north wall is long enough and the windows on it are tall enough, and because the quality of the work was high enough.The 2008-buyer-turned-2012-seller thought he created up to $280,000 in new value with the new mezzanine, as he started to market on October 5 at $1.625mm. It took until November 1 for a contract to be signed, with some set of multiple buyers fighting over the honor and the winner agreeing to the $1.7mm that closed on December 21. Nice work, all around.

more shapely + taller
The last time I recall making such a big deal about lofted (mezzanine) space in a Manhattan loft was in my January 14, when bad things happen to high ceilings: 250 Mercer Street loft sells at $650/ft, in which the title tells the main story. That one involved ceilings that were not as high as loft #1J (even if only 14+ feet) and a very narrow loft with the only windows on one very narrow end. That unfortunate loft actually traded for less than another loft (with a smaller footprint) in that same building that did not have “extra” mezzanine space, as though the mezzanine in that case was a negative value factor. (“As though”, although it is more likely that the different shapes for those two lofts accounted for much of that difference.)

not a Tax Uncertainty Sale
Add the December 21 loft #1J sale to my (so far unscientific) collection of late 2012 sales that do not fit the Conventional Wisdom about which I was skeptical in my January 4, in which Manhattan Loft Guy bravely calls BS on the Market Trend Meme Of The Day. First off, a coop seller really motivated to close in 2012 would have started sooner than 87 dsays before the end of the year. Second, this seller did not anticipate much of a taxable gain; he asked only $280,000 more than he paid, so would have no recognized gain after deducting his sales fee from a full price deal (due to the $250,000 non-recognition threshold for single filers). (Indeed, even selling above ask is not likely to generate any federal income tax bill, as the $355,000 gross gain over 2008 would be offset by that sales fee [here, 5%, or $85,000] plus the 2% flip tax imposed by the coop [$34,000], putting him only $31,000 above the non-recognition level before considering his renovation / construction costs for 360 sq ft of mezzanine.)

We will look elsewhere, sooner or later, for evidence of actual Tax Uncertainty Sellers. Note to self …
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*Note to StreetEasy: maybe the error is in ACRIS, but if you look at the deed record on February 11, 2008 for “#4B” at $1.345mm, you see that the notice address for the buyer is 720 Greenwich Street #1J [this loft] but for the seller #4B in a building uptown. As a result of this coding error, the #iJ history in the recent sale goes from April 4, 2006 at $985,000 to December 21, 2012 at $1.7mm, omitting the February 11, 2008 at $1.345mm. You can easily confirm the proper sequence by noting the seller and buyer names on the deed records.

(Countdown … 10 … 9 … 8 … 7 … 6 … 5 … 4 … 3 … )

© Sandy Mattingly 2013