velocity in the Manhattan loft market / 72 Mercer Street sale was not the fastest

not to mention, huge gain over January 2008 sponsor sale
I tend to collect a bunch of interesting recent sales each week for future posts, writing a headline and capturing the link; often I don’t get to all in that collection because … well … so many lofts in Manhattan, so little time. And sometimes by the time I get to that loft, the initial draft headline does not fit. Which is a roundabout way of introducing the June 30 sale of the “2,142 sq ft” Manhattan loft #2W at 72 Mercer Street, a 2006 reimagining of a Soho loft building, with different facades on the 7-story Mercer wing and the 6-story Broadway wing and a private courtyard in between. My first cut at a headline referred to loft #2W sale as occurring in world record time.

So it seemed on first blush, but I did not have to check much history in the Master List of Manhattan Lofts Sold Since November 2008, as faster deals cropped up almost immediately. Not that there was anything lethargic about the #2W marketing campaign. The loft came to market on May 6 at $3.995mm, took all of 32 days to secure a full-price contract by June 7, and closed (as noted) on June 30. It is not so much the 32 days to contract as it is the 55 days from start to finish that originally earned my attention. That, and the gain over the new development sale in 2008.

The sponsor sold #2W to the recent seller for $3mm on January 3, 2008 (at The Peak of the overall Manhattan residential real estate market) at a non-trivial discount from the ask of $3.45mm. In fairness, this sale is not really an at-Peak sale, as the contract was signed in May 2007. But it is quite close to Peak. That is a very impressive premium of one-third, whether you count the base as Peak or merely near-Peak.

That huge resale premium for loft #2W is radically different from the result of the only other resale to date in this 8-unit building. Loft #4E on the Broadway side (also “2,142 sq ft”) was sold by the sponsor on April 1, 2008 (contract date of November 1, 2007) for $3,222,761 (a full-ask deal, plus the transfer taxes) and resold by that buyer on January 29, 2010 at $3.2mm. That is a less than 1% loss, but a loss nonetheless.

If you are thinking that The Market might prefer the Mercer side to the lofts on the Broadway side, remember that the sponsor thought so to some extent (the original #2W ask was $3.45mm, original #4E ask was $3.165mm), but The Market at the initial offering did not price them that way. (For better parallels, The [new development] Market valued #3E at $3,054,750 and #3W at $3,156,575, and #4E at that $3,222,761 and #4W at $3,210,542; hard to say there was a market preference for Mercer over Broadway.)

I would say that #2W just sold under market conditions that were more favorable for sellers than those prevailing when #4E sold 18 months ago, but #4E was also a very successful marketing campaign: to market December 4 at $3.3mm, in contract January 3 at $3.2mm. So I am left scratching my head over the different resale performance of these two lofts. And in need of getting back to my original point.

speed merchants abound
I have already ruined the suspense by noting that the June 30 #2W resale was not a world record. Without even having to do dig very far back here are other Manhattan lofts that were on and off the market in the same or fewer days (note to self: do a post about this phenomenon?):

Unless you got bored and stopped counting, that is 21 lofts on my Master List of Manhattan Lofts Sold Since November 2008 that found contracts within 32 days of coming to market going back to June 1, out of 103 Manhattan loft resale transactions on my spreadsheet in those 7 weeks. Obviously, that strikes me as a big number (and as a high percentage of the total). What does it mean?

At a minimum, it means that more sellers are pricing where buyers want to be, and getting deals done quickly.

down memory lane
Absolutely, one of the things that I do not do but should, is to go back to the historical record available on my Master List. (Yet another note to self ….)

Here are the numbers of loft transactions on my spreadsheet over the same period (June 1 through July 20) in past years (and there are likely to be more lofts that sold this past July 20 or before that have not yet been recorded), with the total transaction resale volume and the number of sales with contracts within 32 days of coming to market:

I am a little surprised that 2010 had so many quickies; not at all surprised about 2009. Data are data. Enjoy!

oy
I also found in a pile of draft posts a OYAToMLG subtitled “high velocity Manhattan loft sales edition”. It would have been nice if I had posted this three weeks ago when it was timely, but here is a One Year Ago Today on Manhattan Loft Guy post that should have gone up on July 7, about an even dozen Manhattan loft sales that found contracts within 5 weeks, suggesting a changing market: 12 examples of the (rapid) velocity of the Manhattan loft market. Of course, the implication is that this was a change in the market.

© Sandy Mattingly 2011