rational market? not for 15 Broad Street loft that sold 13% above unsuccessful 2013 ask

by Sandy MattinglyPosted on Posted in loft neighborhoods fidi — No Comments ↓
economists weep over the downtown Manhattan loft market (sometimes)

In yet another twist on the Manhattan-lofts-that-sell-above-ask theme, the wrinkle that most interests me about the recent sale of the “2,011 sq ft” Manhattan loft #3120 at 15 Broad Street (Downtown by Starck) that sold $5,000 over ask is that it did not sell when offered at a much lower price last year. With the overall Manhattan residential real estate market up about 10% from November 2013 to September 2014 (according to the single number proxy in the paired-sale StreetEasy Manhattan Condo Index), you’d think that a loft that just sold for $2,605,000 would have sold a year earlier if offered about 10% less than that. You’d be wrong.

Chew on this a bit:

May 10, 2013 new to market $2.295mm
Nov 10 off the market
April 30, 2014 new to market $2.6mm
Sept 8 sold $2,605,000

(The inter-firm data-base does not reveal when the loft when into contract, as if there were no REBNY rules about such things; alas.)

Let’s review, if you’ve finished chewing. The loft was professionally exposed to The Market for 6 months last year, without selling. For some reason, the sellers and their agents decided to try again six months later, 13% above the unsuccessful offering. For some reason, they were right.

(Remember: an unsuccessful asking price tells you only that The Market does not like that ask; it doesn’t tell you how far away from The Market that unsuccessful price is. If it were me, I’d guess that the last unsuccessful price was at least 5% too high, on the assumption that someone willing to pay, say $2.18mm, would have been able to successfully negotiate that modest discount last year, with the possibility of a much higher miss.  After all, that $2.295mm was the original asking price in that marketing campaign, so you can reasonably assume there was some discount the4 sellers were willing to take.)

what’s not to like about this FiDi loft, apart from the obvious?

There is a significant portion of Manhattan loft buyers who would never consider this 2006 uber-loft conversion because of the oppressive (to some) security measures involved with living across the street from the New York Stock Exchange, even if such buyers would consider elsewhere in the Financial District. But nothing about that has changed since last year, or even since the building was freshly residential.

That aside, this loft has many charms: in addition to the standard issue Starck finishes and the super amenity package. Loft #3120 has one of the better 2-bedroom floor plans in the building:

split bedrooms + long walls of windows + corner + large living room

And, from the 31st floor, “breathtaking water and city views from every room”.

Again, nothing about the appeal of this loft in 2014 was not also appealing in 2013, and earlier.

there was an active market at this corner last year

Sometimes there is some hyper-local reason for a loft under-performing The Market, but I can’t imagine what that could be at 15 Broad Street. Among many other sales, two “2,220 sq ft” 3-bedroom lofts on lower floors sold last year just as #3120 was coming off The Market. Loft #1810 sold for $2.85mm in October 2013 and loft #1410 (with the same floor plan and building location, obviously) sold for $2.7mm in November 2013. Neither claimed the views (including the river) that #3120 bragged about, though each has the obvious advantage over #3120 of the third bedroom. Yet they sold at or above $1,216/ft at the same time that #3120 was languishing at $1,141/ft.

Let’s make this even a little worse …. The 3-bedroom market at 15 Broad Street does not seem to have changed much since late last year. The “2,300 sq ft” loft #1620 has a very similar floor plan to the 3-bedroom “10” line neighbors (with no special bragging about views, just about light), and just sold for $2.85mm, or $1,239/ft.

Of course, loft #3120 sold two months ago at $1,295/ft. More, on a dollar-per-foot basis, than the 3-bedroom #1620 last month, after not having sold at least $72/ft lower than #1810 and #1410 last year.

Go figure. I dare ya.

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lots of reasons loft at 710 Broadway sold 30% over ask

by Sandy MattinglyPosted on Posted in loft neighborhoods noho — No Comments ↓
provocative price does its job: generates a feeding frenzy

Let’s start (uncharacteristically) with the main point: it’s not that the “2,500 sq ft” Manhattan loft on the 7th floor at 710 Broadway sold quickly for a lot of money, it’s that this Noho beauty sold for a great deal more than the ask. To market on July 11 at $2.15mm and in contract by August 15 at $2.8mm (closed on October 21, but the action was in Summer). As you know from the headline, or because you have a head for simple fractions, that’s 30% above the ask. Unlike the Chelsea loft in my November 20 post, lovely … but Chelsea loft at 236 West 26 Street sells TWENTY-FOUR PERCENT above ask, this one is easy to understand; at least in result.

There’s a lot to chew on with this lovely loft and its sale, but first let me tell you a story….

put yourself in this Manhattan loft buyer’s shoes … what would you do?

You know that aphorism about the bird-in-the-hand, and what it is worth? Imagine that you have been looking for a very loft-y downtown Manhattan loft, that you are somewhat flexible about neighborhood, that you have to have 2 bedrooms and that you really want at least 1,500 sq ft. Of course, you don’t have an unlimited budget (no one does) but imagine that you have the resources to react to constantly being disappointed by the available inventory to push your budget above $2mm. Imagine that you are lucky enough to work with an agent like Manhattan Loft Guy (if there is such an agent 😉 ) so that you have a very high level of confidence that you are well advised about The Market. After some months of not finding the loft, you drive a hard bargain for a space that meets nearly all of your criteria, with character, high ceilings, size, in decent (if not mint) condition. It’s been months of looking, involving some dozens of lofts seen in person between $1.5mm and $2.5mm, so you are elated to have found The Right Loft At The Right Price.

Then imagine that a few days into due diligence, a new listing hits that seems to be superior to TRLATRP in every way (a little bigger, a little more finished, a little more interesting) and is nearby. And is cheaper.

Of course you are inclined to panic! Of course you wonder if that hard bargain you made was tilted in favor of the TRLATRP seller. Perhaps you even wonder (gasp) if that very high level of confidence that you are well advised about The Market was misplaced.

That lucky-to-work-with-agent begs his way into the very first showing opportunity for the new listing, as your due diligence clock on TRLATRP continues to tick, and that agent and your lawyer are telling you that you have only a few days (at most) in which to sign the TRLATRP contract or risk losing that opportunity. You visit the new listing, and it looks in real life as it is presented on the web: a little bigger, a little more finished, a little more interesting than TRLATRP. And cheaper.

Of course you want to own the new listing instead of TRLATRP. But only if it can actually be purchased at the right price.

So you have the conversation with that agent about the bird-in-the-hand, and what it is worth, and you start thinking about exactly what risk of losing the TRLATRP you are willing to run in order to get what chance of owning the new listing at the right price.

First things, first: you immediately bid above the ask for the new listing (before anyone else has even seen the loft). If there’s any chance of this working out, you have to force the new listing to go quickly, if you have that leverage, so you show your motivation and explain your timing problem (that handy bird).

Stop there, folks. What would you do? How much risk would you run, and how might you assess the likelihood that you could buy the new listing at the right price, at the risk of losing the other place?

Let’s leave you in that state of uncertainty a bit, and return to that new listing, which is (d’oh) the 7th floor loft at 710 Broadway in what is technically Noho but can feel like NYU….

“The loft is attractively priced and will sell quickly.”

No ship, Sherlock. This is not quite true, however, at least not for me: “every element of your fantasy New York loft is found within”. No beams and no columns, so not “every element”; but I quibble. More quibbling …. The floor plan is both backwards (with the bedroom in front, over Broadway) and awkward (I said “the” bedroom because the “study / sleeping area” has no window; the inhabitants of the bedroom and sleep area probably share the first bathroom, otherwise it is borderline cruel to make the sleep area sleeper pass the bathroom immediately outside the sleep area to walk around the corner). I understand the logic of the layout, but I wonder if the new owners won’t erase all the lines and start over:

You can squeeze two 8-foot wide bedrooms in the front, but why bother? (Better to have someone sleep in the dark.)

Still more quibbling …. You’ll not find any bragging about finishes (unless you consider “Viking and Jenn-Air appliances” to be bragging about finishes), for good reason. The beauty of the loft is partly in the bones (11 1/2 foot barrel-vaulted ceilings, massive windows), partly in the scale (a 600 sq ft bedroom and a 900 sq ft living room), but mostly in this number: $2.15mm. The genius of starting so far below market is that the specifics of the loft (all that Manhattan Loft Guy quibbling) are rendered irrelevant. Of course there are ‘issues’, says every informed buyer who ever visited the space … just look at the ask!

I shouldn’t overstate the ‘issues’ (hence, mere quibbling), as the loft as-is is in move-in condition and the layout is very workable for any buyers who don’t need two bedrooms with windows. (Such as my clients.) In fact, that makes it more attractive to some buyers, because the new owners don’t have to renovate, and when they decide to they can do it in stages if their lifestyle and/or financial resources make that a logical approach. (Again, folks with another $750,000 in cash might well do a gut renovation.)

 how’s that conundrum going for you?

How much of a risk would you have run to take a shot at owning this 7th floor loft at 710 Broadway, knowing that you might lose the opportunity to buy (the loft formerly known to my clients as) The Right Loft At The Right Price? That’s going to depend on your budget, in part, but also on your assessment of what others in the market will pay for the 7th floor loft, once they are pushed to pay their maximum comfortable price.

In the event, the conundrum was easily (if a bit sadly) resolved for my clients, as the bird in that hand (TRLATRP) had been hard fought to get in hand and they (correctly) predicted that The Market would drive the 7th floor loft beyond the price at which it would still be less expensive than TRLATRP. (In other words, they realized they had little leverage to force the seller into a quick decision to sell to them at a reasonable price.) So they only had to agonize a few days over the possibilities, hardly causing a hiccup in the due diligence and contract term tinkering for TRLATRP.

I don’t think I’ve had a buyer client face this sort of conundrum before, quite so starkly. It was fascinating to watch them walk through it, ultimately coming to what we all agreed was their only logical decision.

In retrospect, the 7th floor at 710 Broadway was not really a competitive listing with TRLATRP, as the relative advantages of the 7th floor loft evaporated at $2.8mm (which was a number beyond which they wanted to pay, anyway). I’m not going to identify TRLATRP so as not to overshare about my clients, but they’ve long since closed on that loft, happily.

A Seller’s Market can be a terrible place to be for a buyer….

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lovely, but … Chelsea loft at 236 West 26 Street sells TWENTY-FOUR PERCENT above ask

by Sandy MattinglyPosted on Posted in loft neighborhoods chelsea — No Comments ↓
(sometimes, you have to shout about Manhattan loft sales)

The Capital at 236 West 26 Street is a fairly mature coop, having been converted in 1984. There are some quirks (commercial lofts mixed with residential units; odd numbering conventions for lofts), but it is big enough to have enough history, certainly big enough that this should not happen, except on purpose: the “1,800 sq ft” Manhattan loft #11NW came to market on July 25 at $2.495mm and found the contract within 3 weeks that closed on October 22 at $3.1mm. And I don’t think they were trying to do that on purpose.

The loft has many charms, from condition (mint-y, with “custom finishes throughout”) to exposures (“sun-filled”, with open views) to outdoor space (setback terrace, with Empire State Building views, not to mention those Juliet balconies), but Jeezy Pete … $605,000 over ask, and $1,632/ft, roughly adjusted for outdoor space at 50% of the value to the interior, in a coop in which the last sale was of to-be combined lofts at $953/ft.

The loft is a beauty, with those finishes on a quirky footprint that is ideal for the right buyer. (And the found the right buyer, didn’t they?)

I am a sucker for Manhattan loft floor plan porn

Particularly after beating up on the awkward-and-not-in-a-good-way floor plans in Triebca Space, as I did in Tuesday’s, The Market has its way with “above ask” Tribeca Space loft sale, as is its wont, I find the #11NW floor plan to be a thing of beauty:

quirky, and optimized for entertaining by a small family (an Elliman image)

This is not a “flexible” floor plan. You could flip it around, theoretically, by splitting the north wing (the kitchen / dining area) into two bedrooms, then opening the west wing into living / dining (assuming those bathroom plumbing stacks could handle kitchen duty), but what’s the point? You get no more bedrooms, just a different look.

As is, the loft has an unconventional allocation of space, with about equal space allocated to the separate kitchen / dining area and to the living room space … but what entertaining possibilities! The dining area flows around the corner to the living room, optimal for guests wandering along the window walls or out onto the terrace. And note how the kitchen is a working (entertaining) kitchen: who needs that much counter space, if not to feed and entertain 20 or 50 folks?

Another subtle thing I like about the floor plan: you see that entry, behind the kitchen? Because that kitchen ‘wall’ lacks tall cabinets, it is obvious that in real life you can see the north windows (with a view ‘over’ the kitchen) immediately on entry.

enter through that grey door, and you will feel compelled to look to your right to the open city views (Elliman, obvs)

My only quibble (because I am that guy) is the home office. It eats into the living room, ruining the square of open space that should be there. But: they built it to optimize their usage, and this was obviously valuable; and, it is easily removed, if the new owners don’t need an office (or, as used by these sellers, a nursery).

the terrace is a thing of beauty

As noted, that terrace is perfectly placed for access from the kitchen / dining area, with easy access as well from the living room. Cocktails and hors d’ourves on the terrace, anyone? It’s just big enough for a small crowd, with quite a lot of character (brick porn, anyone?), with An Iconic View:

a lot of sky, and that tall needle to the northeast, always nicely lighted during cocktail hour

Talk about optimized for entertaining: would you turn down a dinner party invitation here during terrace weather?

If you are a regular reader of Manhattan Loft Guy, you noticed what I did up top in doing rough adjustment for the outdoor space to get to a ballpark value for loft #11NW of $1,632/ft. Obviously, that 50%-of-interior rubric is my doff of the cap to The Miller, with whom I riffed about how to value outdoor space way back in my May 6, 2010 post.

If any terrace earns super-premium treatment, it would be this one, as it is only a small percentage of the overall space (while still being large enough to fit a small crowd), it adds views not easily evident from much of the interior (who doesn’t love to guess the reason the Empire State Building is that color this night?), and is directly accessible from the most logical parts of the loft, rather than being up the stairs or accessible only from the second bedroom. I ballparked the terrace at 50% of the value of the interior because that is the top of The Miller’s general guide; hence, $1,632/ft as the adjusted value of the entire loft. But I could be persuaded that the terrace is really equal to the value of the interior, which would bring the adjusted value of the entire loft down to $1,550/ft.

A small difference between the 50%-of-interior ($1,632/ft) and 100% ($1,550/ft), but perhaps enough to make a difference in comping to the last sale.

not science, but art (or, is it guesswork)?

The best comp for any given loft is a recent sale in the same building that is similar in size, quality, and view. (You know that, but I repeat for rhetorical purposes.) In this case, the “2,307 sq ft” on the 7th floor sold as a combination project 18 months before loft #11NW for $400,000 and $1.8mm is neither very recent nor very similar in quality, but it is somewhat similar in scale. And it is the best that we have hyper-locally. We can easily, if roughly, adjust for the different market conditions when that combo project sold, compared to #11NW, of course using the StreetEasy Manhattan Condo Index.

That oh so useful tool tells us (in rough terms) that the overall Manhattan residential real estate market was up 20% from March 2013 to August this year (the most current month indexed). In broad terms, that implies that the 7th floor combo would have just sold for $1,144/ft, still in need of renovation / combination. Or, about $500/ft lower than the recent value of #11NW if the terrace is worth (only) half the value of the interior; about $400/ft if the terrace is truly the premium amenity that I believe it is.

From this perspective, the fact that loft #11NW just sold for $3.1mm is not so very surprising, suggesting a premium over the 7th floor of only $150/ft to $250/ft, with the 7th floor adjusted for time and a $250/ft renovation. I say “only” because #11NW gets some upward adjustment for being four floors higher, another upward adjustment for (apparently) having better views, and for being ‘done’.

But I keep coming back to this: the people professionally responsible for assessing where loft #11NW might fit in The Market agreed with the sellers that the best asking price would be (only) $1,313/ft (adjusted at 50% for the terrace). I can imagine a strategy that intentionally prices below The Market to generate the maximum frenzy in the shortest time; I’d be surprised if any sellers would agree to intentionally under-pricing by 24%.

It is a good day. I get to play with numbers, not only making reasonable but untestable assumptions about this loft, its neighbors, and The Market, but riffing (again!) with The Miller. And, I get to wash the bad taste out of my blog-mouth of a crappy floor plan with no view or outdoor space in a nondescript not-prime Tribeca condo earlier this week, with this charmer. That helps.

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The Market has its way with “above ask” Tribeca Space loft sale, as is its wont

by Sandy MattinglyPosted on Posted in loft neighborhoods tribeca — 2 Comments ↓
who was responsible for pricing strategy of loft at 25 Murray Street?

Uncharacteristically, let me cut to the chase: yes, the “1,395 sq ft” Manhattan loft #4K at 25 Murray Street (Tribeca Space) earned the coveted green cell background on my Master List of downtown Manhattan loft sales between $500,000 and $5,000,000 because its sale price ($2mm) exceeded its asking price ($1.898mm). D’oh. (So far.) But here’s the punchline: it took 397 days, three brokerage firms, and three prices to get that ‘premium’ price. You never know how these pricing decisions are made (unless you are one of the decision makers or advisors), but someone was much too enthusiastic about this loft, repeatedly. Until they weren’t, at which point The Market corrected a too-low asking price, as it will do when the buyer pool is deep enough for such things.

This long history has a deceptively short table (with some short breaks omitted):

Aug 12, 2013 new to market $2.345mm
Feb 19 change firms
May 23 $2.145mm
July 7 hiatus
Aug 16 change firms $1.898mm
Sept 13 contract
Oct 22 sold $2mm

If I had to guess (I don’t, but I enjoy the exercise), I’d blame the seller rather than either of the first two firms. Agent #2 was (apparently) unable to persuade the seller that six months was not long enough to prove that The Market did not want the loft at $2.345mm. Nine months was sufficient to make that so-seemingly-obvious point, but then look what happened: six weeks at $2.145mm turned out not to be long enough to generate a buyer at $2mm, but four weeks below that did the trick.

Representing loft sellers in Manhattan can be a cruel business. That second firm got the loft to what might well have been the right price (assuming the seller was negotiable to a reasonable degree) but they couldn’t close the deal. Only when The Market thought that loft #4K was a bargain did enough potential buyers emerge to drive the clearing price back up to within 7% of the May 23 – July 7 asking price. The seller had better be happy with that; the last agents are quite happy; the second agents are … frustrated. But it’s business, so they move on….

this kind of thing comes from loving a Manhattan loft not wisely, but too well

The Market had some trouble with this 2006 new development back in the day and it has never been a favorite of mine. The size and footprint of loft #4K give some indication why. First, the ceilings are not very high and the windows not very large.

not very loft-y, is it? (Elliman pics here)

that dropped kitchen ceiling almost makes you duck your head, doesn’t it?

There’s no particular charm or character evident in the listing photos or the broker babble, and none in the real life experience of this loft. What you get is a level of finishes that were standard for new development condo conversions of its day (2006), a set of amenities to match (concierge, gym, sauna, billiards [!]), and the opportunity to break the loft up further, efficiently if not (to use a horrid term from The Broker babble Bible) ‘expansively’.

The recent seller traded open space for a third sleeping area:

the (new) nursery can’t be a legal “bedroom” for two reasons: no window + too narrow

(The original listing shows that the original floor plan did not have that nursery, and featured a different configuration for the closet [love the locution “small Office / Large WIC”, even if it is awkward].)

That thing called a “converted bedroom” can’t be a “bedroom”, of course: no window. But it is likely that many owners in this line use this place as the ‘master’, given the en suite bath, even if the dimensions are modest. Those not-so-masterful dimensions at the back of the loft are barely exceeded by the one true (and original) bedroom in the space. Note that putting that bedroom in that corner ‘steals’ half the windows from what would otherwise be a large open space. Oh well.

Haters gonna hate on this footprint (Manhattan Loft Guy, guilty as charged), but the benefits here are three sleeping areas in a loft that is only “1,395 sq ft”. However awkward, cramped, or dark these rooms may be, three bedrooms sleeping areas around $2mm in Tribeca is nothing to sneeze at.

asking for a building record, and nearly getting it

The StreetEasy building page (Activity Tab, of course) gives you an idea of quite how audacious the early asking prices were. At the time the #4K asking price was dropped to $2.145mm ($1,538/ft), no higher price had been paid in the building for a loft without huge outdoor space (on a dollar-per-foot basis). The neighboring “1,842 sq ft” loft #4E was then asking (only) $1,409/ft; that much more felicitous floor plan got  a contract at $1,452/ft (above ask!), which may well have been the data point that (finally) drove home to the #4K seller that her ask was beyond what The Market would bear.

Loft #4E has a classic Long-and-Narrow footprint, with no cut-away for a common stairwell because it is part of a huge building footprint instead of a full-floor or half-floor floor-through loft.

real bedrooms! grand proportions! (Elliman, again)

This may be the best floor plan in the building, optimized with two bedrooms in back, just like a classic loft, and wide enough to be (truly) ‘spacious’. It’s no wonder it got a building record, in the no-outdoor-space dollar-per-foot category.

As noted, coincidence or not, the #4E contract preceded the last #4K price drop by two months (the #4E closing preceded that #4K price drop by three short days, so maybe that was what the hiatus and change in firms was about). That last ask was (only) $1,390/ft, which still looks like a building record, other than #4E and lofts with outdoor space. We know that the #4K buyer pool woke up with that ask, very likely primed by the #4E sale, driving the price up the clearing price of $1,434/ft, well within spitting distance of #4E at $1,452/ft.

This pair shows the limits of the dollar-per-foot comparative metric. Two lofts in the same building that The Market valued within about 1% of each other on a dollar-per-foot basis, that (to my eye) present floor plans of very different quality. In this case, I wonder if this (to me, illogical if not irrational) small gap is due to the recent #4K seller having squeezed that ‘nursery’ into the otherwise open space of the (now, to my eye) cramped footprint. For the Tribeca buyer pool that really really really needed three sleeping areas, loft #4K could have been seen as a value play, so long as the space compromises were palatable. For at least two buyers, that compromise was apparently palatable, with at least one such buyer provoking another such buyer to $1,434/ft.

It’s a funny business, inn’t?

a marvelous main listing photo that can’t be matched onto the floor plan (bummer, that)

I can’t remember the rules, but I think agents get to sequence the photos as they appear on StreetEasy. In the case of loft #4K the photos are in a different order on the Elliman and StreetEasy, with this very inviting photo leading the presentation on StreetEasy:

this is NOT a photo of a very spacious loft, though there are wonderful classic elements

Rube that I sometimes am, this photo caught me short when I first considered the #4K sale. Wow, I thought, I didn’t think Triebca Space had lofts as nice as this photo. Do’h, it doesn’t. Obviously, if you take a second to reconsider, or if you try to find this room (with that far wall of glass) on the #4K floor plan, you realize this is the lobby. Damn. This is one beautiful loft lobby. (Note To Self … find other Manhattan residential loft buildings that have nicer lobbies than lofts, in contrast to the very many buildings with pedestrian [or gritty] lobbies and lovely spaces upstairs.)

It’s a funny business, inn’t?

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necessity, that mother, yields strange floor plan for 39 Worth Street loft

by Sandy MattinglyPosted on Posted in loft neighborhoods tribeca — No Comments ↓

not necessarily an inspired invention for this Tribeca loft, but interesting

For having a footprint that is a classic Long-and-Narrow (maybe 23 x 85 feet, with a cut-out for the elevator and building stairwell, windows front and back), the floor plan of the “2,125 sq ft” Manhattan loft #3W at 39 Worth Street is hardly classic. First, it’s backwards, with the bedroom at the front, by the elevator, and the kitchen at the back windows; second, the middle of the space benefits from high-in-the-wall windows, but the few ‘rooms’ don’t take advantage of the light (move that ‘office / guest room’ 6 feet north and it becomes a ‘bedroom’; or shift the ‘den / library’ from the east to the west wall to the same effect, if those windows are big enough to qualify for Building Code purposes).

it is even more backwards than it looks

This early-ish Tribeca coop (1981, as babbled) sits on the north side of Worth Street, just a bit east of West Broadway, so not only is the bedroom at the wrong unconventional end of the loft because the elevator is right there, those bedroom windows face Worth Street, instead of the typical mid-block (quieter) back of the building. The light’s not great across Worth Street here, and there’s no south view to speak of, as confirmed by the half-pulled blinds in the bedroom photo:

if there’s a view, they take the picture with the blinds open, right? (an Elliman pic)

The conventional Manhattan floor-through loft layout would put the bedroom(s) on the back (north) wall, but in this case that would be an expensive proposition because the kitchen is in the northeast corner of the loft. You could probably move it (more on that, below) but that’s probably the nicest element of the loft (“luxurious kitchen has Jenn-Air stove and oven, refrigerator, microwave and dishwasher [and l]ovely veined marble countertops, abundant cabinets and a breakfast bar to enjoy the morning”). Rip out the most expensive part of the loft, if you like, but that’s a different economic proposition than buying and living as-is.

 a relevant sale, downstairs, a while ago

I talked about the sale of the loft right below loft #3W in my March 26, 2013, took a while for architects to wake up to gut project loft at 39 Worth Street, after loft #2W sold in bring-your-architect condition. That loft was in different condition (obviously) and sold in a different market (obviously), but the second floor kitchen is as far from that of the third floor as possible, in the southwest corner. That suggests that the kitchens were put where they are on each floor a long time ago, when (most likely) the lofts were otherwise more open. That also means the third floor kitchen could be moved, if only one had the stomach and budget to do so.

I also talked about the light and ‘views’ in this line in that March 26 post last year:

“light from enormous windows” is one-sided

The babble brags on the “light from enormous windows”, and the listing photos show very tall windows, front (kitchen) and back (bedroom). But the rear photos are so washed out that you can’t tell what is on the other side of those windows. Indeed, you’d never know without being in the space (or peering between buildings around the corner on West Broadway) that there can’t be much light coming in those enormous rear windows, as they face the new New York Law School building that wraps alongside and behind 39 Worth Street, dwarfing this 5-story loft. (If the Google Maps page holds together in this link, click to look directly at the gap around the corner on West Broadway between the Pamper Ur Pets storefront and the New York Design storefront; you are looking at the west wall of 39 Worth in brick, to the right, and the monochrome law school colossus on the left.)

In other words, there ain’t any light and even less of a view from the rear of loft #2W. I bet that surprised (and disappointed) a bunch of potential buyers.

To prove that there’s no view and not much light from the third floor here (just as just below), check the windows (mostly washed out), blinds (mostly closed), and view (mostly absent) from the north end of the loft, with the kitchen:

how much light is there if the lights are off?

The loft just below is a fascinating comp: same footprint (obviously!) and (finally) absorbed by The Market as a total gut job a year and a half ago at $1.55mm. To use #2W as a comp for #3W, you’d need to adjust for the gut renovation required downstairs and for the time between the two sales. Let’s play in that ballpark, shall we?

If #2W had been fully renovated well but efficiently, add a round number half million bucks to its February 2013 value, to $2.05mm. Adjust roughly for the different market in February 2013 when #2W sold and the current market for #3W using the StreetEasy Manhattan Condo Index as a single-number guide, and we’d need to add 21% to the (adjusted for condition) value of #2W. Those exercises imply that #2W today, if renovated so as to add $500,000 in value, would be worth about $2.5mm.

I am not saying that the sellers and selling team went through this same analysis, but coincidence or not, that’s where they came out. It just didn’t work.

May 17 new to market $2.5mm
July 8 $2.375mm
Aug 5 contract
Sept 29 sold $2.325mm

(Perhaps the buyer wasn’t persuaded by the analysis, but if I’m the sellers, I think The Market owes them $175,000.)

meanwhile, next door, in years past

For such a small building, I’ve been here quite a few times. Indeed, I have blogged about the other third floor loft twice. At that time of my March 26, 2013 post the most recent sale in the building was the “2,560 sq ft” loft #3E, which sold for $2mm on June 7, 2010. From that March 26, 2013 again:

That was definitely not marketed as a wreck, or even in much need of updating, but we know that the buyer did a major renovation. (That unusual before-and-after opportunity was featured in my April 18, 2011, ever so rare before and after shots of 39 Worth Street loft.)

I believe that is the only time I have been able to see a loft in both as-sold and after-renovated condition, without the loft having been sold a second time. Bt the way, if you look at the ‘before’ floor plan of #3E, you will see that kitchen is midway on the wall shared with loft #3W, so there are likely still more choices for the “west” loft kitchen than taking up a window and putting it in the northeast or southwest corners.

a backwards loft can still find a buyer

All this neighbor-gazing aside, this post is about layouts. I suspect the recent buyers plan on using loft #3W without substantially changing it. (the numbers don’t work so well, if that is their plan.) Thus, proving that there is a market for lofts with no views; indeed, for lofts in which the you can’t even see out the windows in the main public room. In most of that 43′ living and dining room, the only windows are nearly 10′ above the floor. (No one has toes that tippie.)

Kinda sorta like the loft I hit in my November 11, how much money earned by floating floors, dropping ceiling of 200 Mercer Street loft?, which, as it happens, also featured on (true) bedroom. This post has gone on long enough (tell me about it …), but I have to believe that “apartment” buyers would not accept the layout compromises inherent in the 39 Worth Street not-quite-prime Tribeca lofts, or in that line at 200 Mercer Street at the Noho edge of Greenwich Village. That’s a conversation post for another day ….

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how much money earned by floating floors, dropping ceiling of 200 Mercer Street loft?

by Sandy MattinglyPosted on Posted in loft neighborhoods village — No Comments ↓
but why do it if you can’t (or won’t) enjoy it?

The folks who bought the “2,246 sq ft” Manhattan loft #2E at 200 Mercer Street in October 2012 for $1.875mm with a very problematic layout gave a great deal of thought about how to improve the space and (no doubt) spent a great deal of time and money to radically renovate the space. They thought they might have doubled the value of this loft at the bottom edge of Greenwich Village proper, but they just sold it for $3.15mm. The old layout was fascinating, in a way making too tart lemonade from a bag of lemons can be fascinating; the new layout is bold, in a One Bed Wonder way, and had to be pretty expensive, and time-consuming. Most fascinating? Why someone would go to all this trouble and then love there only briefly (of at all) before deciding to sell.

as descriptive as a listing photo can be about the scope of a renovation

This photo should be a shoo-in for my (to be created) Listing Photo Hall of Fame:

the “gut renovation” caption on the broker site is rather superfluous, no? (Corcoran pic, obvs)

They claim to have started with a specific problem, identified in the lead to the broker babble:

a perfect solution for utilizing the cubic feet in a traditional loft with 13 ceilings

The footprint is Long-and-Narrow, but not in the classic manner for a full-floor Manhattan loft as there’s no cut-out for a common stairwell. This loft has full use of the rectangle. That’s because this early coop residential loft conversion (circa 1978) has 7 units per floor; i.e., a pretty large overall building footprint.  However, unlike a classic Long-and-Narrow, the windows at the west end are high up on that wall, and seem to be barely a factor. If we give them some credit for bringing some light into the master suite, the west windows are still useless for bringing any light very far into the loft. That’s just one of the challenges of this space.

Let’s look at the problem from what they started with.

a bright great room a long (dark) way from the door

The old floor plan looked like this:

it’s a strange one, with that huge section raised on top of storage

That’s how the former owners dealt with the cubic ‘problem’ presented by 13 foot ceilings: they put a huge storage space (at 49″ high, more of a crawl space) under most of the front half of the loft, putting two bedrooms, an office, two bathrooms, an additional ‘sleeping area’, and still more storage, all accessed from a single entrance off the foyer. There was some up-ing and down-ing even on the main level, with the dining area and kitchen raised a step above the floor of the great room.

The photo of what was obviously a child’s bedroom gives you an idea of how little light those west windows add to the loft:

those windows are peering through the picket fence just to the left of the steps

These (almost useless) windows are very hard to ‘read’ in the photos and floor plan, with the offset platform further west than the front door of the loft. I’ve been in lofts in this building (possibly, in this one, in 2012 or earlier), so I know that the windows are in the west wall of the building, and that offset in the kid room above sits on top of the public hallway. That’s why the loft door is a few feet in from the windows, and why the windows are (only) so high on the wall. This is a major problem with the footprint, one the former owners ‘solved’ by splitting the little light on this wall into two bedrooms, and adding (interior) windows to the ‘sleeping area’. Then, more (interior) windows above the kitchen.

These ‘solutions’ were evidently expedient for the former owners. (They bought in 1993, according to our listing system, and the photos are consistent with a renovation done way back then.) But not for the modern loft buyer, and certainly not for the folks who bought in October 2012 and sold two years later.

you can’t get much more gut than this

Per the recent babble:

Almost everything but the original exposed brick walls and the oversized east facing windows was removed.

That “almost everything” is distracting, but the open floor photo and the simple concept of floating a new floor and dropping the ceiling around new central air tells you this was a major renovation. Finally, I’ve been holding back the new floor plan:

xxx

much more open plan, but the same problem with those high windows on the entry wall

The major plumbing functions are in the same basic places, but oriented very differently (not to mention, at the floor level instead of being raised above a 4-foot crawl space), and the front of the loft is simplified (foyer-to-gallery, plus master suite), permitting a straight view from the door to the far windows.

"far" windows, indeed (pix are Corcoran, obvs)

“far” windows, indeed (pix are Corcoran, obvs)

The new owners evidently felt the space needed soundproofing (“the floor was suspended on rubber cushions … and dropped ceiling were soundproofed throughout”; no mention of those east windows, one flight above the sidewalk above Broadway) and present the loft as though the big renovation issue was how to deal with the 13 foot ceilings. I guess, in the sense that they spent a lot of money to address (readdress) this issue (they embraced the height instead of using the rabbit warren of rooms on top of the old crawl space). Not much they could do with the big problem inherent in this loft foot print, so I guess discretion dictated they not emphasize how useless those west windows on the front wall are. Fair enough.

eight million stories in the naked city …

… and there’s at least one story behind the decision of the October 2012 buyers to gut the loft to no-detail-overlooked standards but offer it for sale within a year and a half. They couldn’t have lived it in for very long, alas.

As mentioned up top, they thought they had just about doubled the value of the loft (by their renovation, and the tearing of calendar pages):

Oct 12, 2012 bought $1.875mm
Mar 17, 2014 new to market $3.675mm
June 3 $3.315mm
Sept 9 contract
Oct 28 sold $3.15mm

They sold for $1.275mm above what the paid. That’s a big number, but fails to take into account their renovation costs. At $300/ft for a no-detail-spared renovation (a conservative estimate), that pushes their buy+gut total to something above $2.5mm, before considering other expenses, and their ‘gain’ down to about $600,000, or about 23%. The calendar, by itself, implied a gain of about 22%, at least as measured by the StreetEasy Manhattan Condo Index. I hope they didn’t spend more than $300/ft for the renovation.

what will the neighbors think?

Of course it is better for comping to have a recent sale in the same building, rather than to use the StreetEasy Index to get just-a-feel-for-the-overall-market. As luck would have it, the loft on the same footprint two floors above sold a few months ago. Loft #4E has lower ceilings (10 ft) and, apart from a new chef’s kitchen, invites a renovation:

a rare opportunity to purchase a sprawling Noho [sic; feels like the Village to me] loft and renovate it into your dream home

The upstairs neighbor sold for $2.325mm at the end of June. The renovation-to-be-done there will be less expensive than the #2E sellers did *if* the chef’s kitchen survives, and if the new 4th floor owners don’t float the floor or do the ceilings to accommodate central air. If the new owners spend $300/ft (not likely, but the sky’s the limit) they’d still be about $150,000 ahead of the #2E buyers-into-sellers. Again, I hope those folks didn’t spend more than $300/ft for the #2E renovation….

a grown-up loft

I want to return to the current #2E floor plan. Note the degree to which it is optimized for no more than two people, sleeping together. There’s the master suite and a den / office that is clearly used as an office, and which is poorly suited even for a guest to sleep. (There’s no sliding door, and there’s a big old column in the middle, not pictured on the floor plan.) So, “2,246 sq ft” of beautifully finished loft space with no kids, and no overnight guests. In order to add utility for kids or guests, you’re going to have to spend some money and un-do work that’s been well (and expensively) done.

The sellers though that a One Bed Wonder would be worth more than $3mm; indeed, they were hoping that such a loft at this scale would be worth well more than $3mm. The recent buyers agreed, to the tune of $3.15mm.

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fraternal twin lofts across Harrison Street sell on same day for $3mm + a few bucks less

by Sandy MattinglyPosted on Posted in loft neighborhoods tribeca — No Comments ↓
if one loft sale on this cozy Tribeca block is rare, what of two?

“Rarely does anything turnover on Harrison Street” has a nice ring to it, and it is well within bounds for graded-on-a-curve broker babble. But when babbled about the “1,707 sq ft” Manhattan loft on the 5th floor at 11 Harrison Street that sold for $3mm on October 15, it is a little unfair. After all, the “2,000 sq ft” Manhattan loft directly across he street, on the 6th floor at 12 Harrison Street, that also closed on October 15 (for $2.995mm) was already in contract when the odd-number across the street was brought to market.

Of course, Harrison Street is one of the shortest and most charming that Tribeca has to offer and lofts don’t come to market here very often. But it is a little cheeky to play the rare-turnover card a few weeks after your neighbor across the street made clear what The Market would pay on this cobblestoned stretch. Let’s do the history first, then the lofts:

12 Harrison #6
April 17 new to market $2.825mm
June 19 contract
Oct 15 sold $2.995mm
11 Harrison #5
July 24 new to market $3mm
Sept 23
Oct 15 sold $3mm

12 Harrison took much longer to close, obviously, probably for a combination of these factors: the 12 Harison seller was an estate, 12 Harrison is a (true) condop, and 11 Harrison is a condo.

would you prefer a condo, or high ceilings, or move-in condition or potential?

These two lofts have a strong surface resemblance, but present rather different strengths and weaknesses. The Market had first crack at the top floor at 12 Harrison, a handsome building:

soft brick tones, some detailing, that lovely sidewalk-level door, and a fire escape that does not overwhelm the facade … a sweet view for neighbors across the street

You know what you’re getting when the babble leads with the “possibilities are endless”: figure a complete renovation is appropriate, even if not strictly necessary. I wish I knew more about commercial building practices 100+ years ago, as this top floor has 13 foot ceilings (or maybe they are 12 feet … agents without measuring tapes, oy), much higher than usual for a top floor (note how close to the sealing the windows are on the floor below); usually it is only the second floor that has unusually high ceilings in a classic loft building.

There’s no bragging about details, let alone finishes, but the photos show some brick and they do claim three skylights.

that’s a wood stove, not a fireplace

The footprint is classic Long-and-Narrow; the floor plan has the typical two bedrooms on the rear wall and an angled bit of busyness in the middle of the loft with a “bedroom” lofted above some of the plumbing, yielding 3 “bedrooms” and 2.5 baths, none of which is likely to remain after the new owners renovate.

trust me: the angles were a ‘thing’ in the 1980s (images from Corcoran, obvs)

Completing the charm at #12, monthly maintenance is a paltry charming $1,350/mo. That ‘savings’ will be needed to pay for the upcoming renovation of $400,000 or more. If this loft really is “2,000 sq ft”, figure the new owners will be in for about $3.4mm when they move in, or $1,700/ft. I wonder if they felt a pang when the 5th floor across the street came out 5 weeks after they signed their contract, especially as they got pushed by a competing bidder to go over ask by $170,000.

That other classic Long-and-Narrow footprint one boasted of being ‘done’, but the floor plan suggests there may be some renovation in its future, as well.

only 1 bath … hmmm … and an extravagantly large master (from Stribling)

The boasting included the chef’s kitchen, brick and more brick, and carpentry (shelves and cabinetry, including the odd locution “[s]cores of closet space”). Assume it all survives, well appreciated by the new owners. That’s $1,758/ft all in, for a condo with similarly paltry charming low monthlies ($1,527/mo for taxes and CCs).

I have to wonder if the 5th floor buyers had been interested in the 6th floor across the street. The pair of lofts are very similar: #11 has wider windows, #12 has taller ceilings; #11 has a touch more character, to my eye, but has an unconventional layout, while #12 offers the opportunity to create The Loft Of Your Dreams (you know, from those “endless possibilities”). Both, as it turns out, have supplemental heating:

wood-burning stoves were also a ‘thing’, easily removed

Note the ‘view’ out the living room windows: there isn’t much, as this is the back of the building, mid-block facing south and the back of buildings on Jay Street. It’s the master that gets the more open north views, including of the handsome #12 (on the right) and its handsome neighbor, with a gap of sky further left.

with the bedroom over the street (the only open view), this loft has a ‘backwards’ floor plan, perhaps dictated by plumbing stacks

If #11 were not already so well-finished, an extensive renovation would flip the kitchen northward, if at all possible, and give the open north view to a living room. But that’s a much bigger investment, on top of $1,758/ft to buy.

One more thing I wonder about: did the condo seller at #11 wait to see how the condop at #12 was received by The Market, avoiding direct competition on purpose? If you are not sure of which unit will be better received, that can be the prudent tactical choice (especially in a deep market). Obviously, the #11 seller picked an ask that The Market was willing to accept.

And talk about a strong surface resemblance … they sold on the same day, $5,000 and the width of Harrison Street apart. Now that’s the sort of thing that (truly) happens only rarely.

finally, funny numbers on the feet

The 5th floor loft at 11 Harrison was babbled as “1,800 sq ft” with the 6th floor across at #12 as “2,000 sq ft”. I have not seen either one in real life, nor taken a tape measure to them, but they do kinda sorta look to be similar in scale, don’t they? You may have noticed that StreetEasy uses “1,555 sq ft” for the 11 Harrison loft with the deed record. Of course this kind of ridiculous uncertainty is a scandal (don’t get me started, or I may have to reprise … again). What’s weird is that the Condo Declaration for 11 Harrison carries a different number for “Approx. Net Sq Ft Area”: 1,707 sq ft (see Schedule A, which is page 8/38 of the Dec here). Hence, I used “1,707 sq ft” in my Master List of downtown Manhattan lofts that have closed in 2014 between $500,000 and $5,000,000. But this may be one set of comps that The Market might consider as equivalent in size, even if technically one might be 15% larger than the other.

Bah, humbug.

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motivated Chelsea House seller holds firm after 10 prices in 4 months

by Sandy MattinglyPosted on Posted in loft neighborhoods chelsea — No Comments ↓
every Manhattan loft seller has a limit

One way to determine if an-owner-with-a-listing really really really wants to be a “seller” is the degree to which the seller owner is willing to drop the asking price in response to market indifference. By that measure, the woman who just sold the “1,250 sq ft” Manhattan loft #7F at 130 West 19 Street (Chelsea House) was a very motivated owner, as she averaged one price change every two weeks in the 19 weeks it took to find her buyers. Many of these drops were borderline trivial, but she went from $2.25mm to $1.825mm in those 19 weeks, or a 19% drop overall. Her first two drops lopped a cool quarter-million off the ask, not that they did her any good.

The last drop seems to have established a matter of principle for the seller, as she refused to negotiate even a dollar off her final ask of $1.825mm, probably to the surprise and consternation of her buyers. I wasn’t going to table the whole history, but the momentum at the end of her campaign, and her apparent resistance point, is easier to see in numbers than in prose:

Mar 27 new to market $2.25mm
April 13 $2.125mm
May 6 $1.999mm
May 28 $1.985mm
June 10 $1.975mm
June 16 $1.9mm
June 27 $1.875mm
July 3 $1.85mm
July 9 $1.845mm
July 14 $1.825mm
Aug 8 contract
Sept 11 sold $1.825mm

Okay … more words … see those last six weeks? $1.875mm for 6 days, $1.85mm for 6 days, then $1.845mm (a truly trivial change, indicative of some pain, no?) for 5 days, then $1.825mm and she was done. Holding there, against all apparent likelihood for the 25 days it took to get a contract at the asking price. Wow….

an excellent bit of babbling

The broker babble is properly enthusiastic and very specific, largely telling the story of a well done (but not super deluxe) ground-up new development, circa 2006. There’s ample opportunity to drop proper proper names and materials, but these two snippets are my favorites: “motivated seller!” (you bet!!); and

This unit does NOT have great views but gets beautiful Southern light and is very quiet.

That first bit was unnecessary for anyone with access to the price history, but it was certainly true. That last bit is a graceful way to manage expectations, preventing folks from being disappointed when they see it in real life. I don’t understand why more agents don’t deal with potential negatives as directly as this agent did, but there’s a lot I don’t understand about the Residential Sales Division of the Manhattan Real Estate Industrial Complex….

obviously, an aggressive pricing strategy, that ‘worked’ only eventually

There’s one common approach by agents who work with an-owner-with-a-listing when that OWAL has an inflated sense of the value of her loft: we’ll try at ‘your’ price for a short while, but I [agent] need you [OWAL] to agree now that we’ll drop the price aggressively and quickly if (as I [agent] suspect) The Market doesn’t bite. The marketing history of #7F is perfectly consistent with that scenario.

Here’s why a professional agent might insist on that kind of understanding with an OWAL who insisted on coming to market with a number starting with a “2” at the end of March this year: the “1,388 sq ft” down-the-hall neighboring Chelsea House loft #7D had just tried that. And failed:

Feb 13 new to market $2.25mm
Mar 6 $2.095mm
Mar 20 contract
May 13 sold $1.999mmm

Chances are very good that the #7F listing agent was given a pretty good idea of the contract price by the #7D listing agent (or the owners spoke directly), so that it is very likely that the #7F listing agent strongly suspected that “2” wasn’t going to fly. One could argue (the #7F OWAL probably argued) that the ‘extra’ space in #7D is wasted, and that buyers might prefer the (slightly smaller) floor plan of #7F over that of #7D. The argument is reasonable, but turned out not to predict how The Market would respond to #7F after just having generated a buyer for #7D at $1.999mm.

It can be hard to swim upstream.

your price doesn’t exist in a vacuum

There’s another common approach by agents who work with an-owner-with-a-listing when that OWAL has an inflated sense of the value of her loft: if you [the OWAL] come out too high, you run the risk of not only not selling your loft, but helping to sell a neighbor’s loft. That may be what happened with the Chelsea House neighbor in the “1,100 sq ft” loft #8B. When dealing with lofts of this scale in similar shape, the “150 sq ft” difference between #7F should be significant.

this proposed #7F floor plan is a rational 2BR set-up, with a reasonably sized second BR + surviving LR

 

#8B: this is a tough layout on which to squeeze a second bedroom: the new room can’t block the MBR door

 

For a buyer who does not need to plan a second bedroom, the two lofts are roughly of equal utility, such that the relative costs are very relevant to a buyer who considers them apples-to-apples. (A buyer who really wanted a second bedroom should much prefer #7F to #8B, as the above floor plans should easily illustrate.) The smaller loft came out at $1.78mm when #7F was asking $2.125mm and I will bet you a quarter that the reason that #7F dropped to $1.999mm the next day was because #8B was seen as a threat. I can’t tell when #8B went to the full-ask contract that closed on July 2, even in our listings system (sheesh … REBNY is supposed to have rules about such information being shared on a timely and accurate basis), but chances are that it was about halfway between the beginning (May 5) and end (July 2) of the process. If I am right about that (reasonable) assumption, any part of the buyer pool for #8B that was also interested in #7F would have seen them as about $200,000 apart. That’s a dramatic difference at this scale.

Loft #8B cleared at $1,618/ft on July 2 The larger #7F at that same rate would have been worth just over $2mm (a) in a rational and efficient market, (b) more or less. Do you see why I think that the #7F prices got #8B sold?

And do you see why the #7F OWAL got stubborn in the low $1.8s? That last asking price was $1,460/ft … a 10% discount to #8B on a dollar-per-foot basis. Ouch.

Very. Big. Ouch.

the obvious disclaimer…

… is that I don’t know what any of the selling agents and sellers were thinking (or saying to each other) and I don’t know what buyers actually considered in making the individual but interrelated decisions to buy #7D for $1.999mm, #8B for $1.78mm, and #7F for (only) $1.825mm.

If what I described above is not what actually motivated and informed the various individual actors, I think it is fair to use these 3 sales in the same building over a short period of recent history as illustrative of how The Market operates in real life.

From the perspective of a fan of an efficient or rational market, the #7D sale determined strongly predicted that #7F would not sell above $2mm, and that #7F should sell for more than $45,000 above #8B. Those fans were right 50% of the time. The #7F seller? O for 2, in a punishing market.

I just hope she did it with her eyes open.

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Soho (former) artist loft with (current) artist’s floor plan sells for $1,324/ft

by Sandy MattinglyPosted on Posted in loft neighborhoods soho — No Comments ↓
finishes upgraded from ‘classic artist’s’ since 1970s; floor plan, not so much

Although the “1,850 sq ft” Manhattan loft #7C at 141 Wooster Street was marketed as an “Original Soho Artists loft available for the first time since the 1970s” and is likely a candidate for a complete renovation, it is not in completely primitive condition. Both the kitchen and the (single) bathroom look to be in a decent-or-better condition, and there are no obvious defects in floors, walls, or ceiling. There is no pictorial evidence of active artist use (aside from some large paintings leaning against the walls), but the floor plan is a classic for the loft of a working artist 40 or more years ago.

12420110

There’s no light near the entry, so take advantage of the plumbing stacks by sticking the kitchen and bath there. The best light is from “Six oversized west-facing windows [that] bathe the loft in natural light”, so that essentially square space is 80% open, and entirely open closest to those windows-that-bathe. The built-in storage in the loft consists of that long closet by the door, a (small!) closet in the sole bedroom, and two rather large “storage” rooms, perfect for separating dry artist materials from wet artist materials, or for equipment from materials. In a purely residential loft with the same basic configuration, those two storage rooms would probably be part of a single walk-in closet, accessed directly from the bedroom.

Do you see that one creature comfort that is accessed directly from the bedroom? I’d love to see a photo of the sauna, to get an idea of how old it is. Very likely, it has been there since the early days, as a place for a working artist to chill relax after a long day’s work. In a purely residential loft with the same basic configuration, that would probably be a master bath (assuming there is a plumbing line there).

Back in the day, those “Six oversized west-facing windows [that] bathe the loft in natural light” were functional; now, they are aesthetic, providing “the most spectacular open views you have seen in Soho”. I suspect the same color palette has been in place since back in the day. There’s nothing like white walls and ceilings to avoid distracting the artist, and to reflect the light from those large west windows. In a purely residential loft with the same basic configuration, some of those “original details including exposed brick and cast-iron columns” would have remained (or be restored to) brick and cast iron in their natural colors, rather than painted white to disappear from view as much as possible. (Same point about that [42 foot?] magnificent beam on top of those columns; I’ll bet you a quarter it has a great deal of character, in its natural state, character that has been deliberately obscured by the white-on-white whiteness.)

 price discovery can be difficult

There has not been a public sale in this 28-unit coop since 2011, one of which was the nicely comparable loft #3C, only slightly smaller (at “1,760 sq ft”; note the shorter entry area) in much the same condition as loft #7C. Just a single bathroom but (if the floor plan is right) completely open otherwise. Maybe the flooring is in worse shape than four floors above. That one sold for $1.453mm three years before #7C at $2.45mm, or $826/ft then vs. $1,324/ft [sheesh $1,317/ft] now.

Fans of the StreetEasy Index would have projected from the #3C comp that #7C in 2014 would have been worth about $1.9mm (the Index is up 25% in the three years) before adjusting for the higher floor, with the light bathing and open views. It is not likely that fans of the Index would have added a half million bucks to the value of #7C over #3C due to the height, light, and views, but that’s what The Market did. But it took the sellers a while to figure out that’s what The Market wanted to do:

Feb 15 new to market $2.695mm
April 4 $2.85mm
June 16 in contract
Oct 8 sold $2.45mm

The sellers really gave it a shot didn’t they? (The seller seems actually to have been an estate, likely of the former artist or spouse of the former artist from back in the day, so it was folks acting in a fiduciary capacity who were trying to get every dollar The Market might offer.) They did a funny zig there, raising the price $155,000 after seven weeks, while The Market wanted to zag. They figured that out by mid-June, of course, striking the deal that closed last month at a significant premium to the value implied by the last most relevant public sale in the same building. All the beneficiaries should be happy.

Bet you a quarter the new owners strip the cast iron columns back to their former glory. Will they also reveal the beam??

 

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Tribeca loft sale at $432/ft shows 7-figure discount for rent stabilized tenant

by Sandy MattinglyPosted on Posted in loft neighborhoods tribeca — No Comments ↓
investing in occupied Manhattan lofts is not for the faint of heart

The recent sale of the  “1,875 sq ft” Manhattan loft on the 4th floor at 158 Franklin Street was arm’s length, after being publicly marketed. (It came out at $750,000 on July 21, went into contract by September 15, and closed 8% above ask at $811,000 on October 13.) But the sale tells us nothing about the condo loft market in prime Tribeca, at least not directly. There’s a new owner, but the owner’s rights are severely limited here, as there’s a “Rent stabilized tenant in place”. Hence, $432/ft. It is not hard to ballpark the value of this loft if the owner were entitled to live there: about $1,200/ft. That’s a discount for the rent stabilized tenant of about $1.4mm.

Here’s how we got into that ballpark: a fairly similar loft on the 3rd floor sold for $1,823,000 in December 2012; since then the overall Manhattan residential market is up about 23% from then to now (as measured by the single figure StreetEasy Condo Index, of course). That loft, if sold now, would therefore have been worth about $2.25mm. (I say “fairly similar” because there was no bragging about condition when the 3rd floor was marketed, just that the 1.5 baths were new; while the 4th floor probably needs a full build-out after a long rental life, so did the 3rd floor.)

The buyer pool for properties like this cannot be very deep. (I’ve never been involved in such a sale, but have a [morbid] curiosity about them.) The buyer is looking not for cash flow (there’s not likely to be much from a rent stabilized tenant.) The buyer’s upside involves selling the loft after the tenancy concludes, which means making a judgment about the life expectancy of the rent-stabilized tenant. (As I said, morbid.) That’s when the payday occurs. In the meantime, you’ve either spent cash or gotten a commercial loan.

The recent seller bought the 4th floor in August 2006 for (only) $252,500. Clearly, that purchase was already subject to the tenancy, so it appears that the 2006-buyer-turned-2014-seller got tired of (no way to put this delicately) waiting for the tenant to die (or otherwise to not be able or willing to live there). If that was an all cash purchase, the (gross) gain was 221%, compared to the StreetEasy Index appreciation of … (wait for it) … 18%. Even with the tent having survived, the big picture numbers look good for the recent seller. Even after adding in taxes and common charges for 8 years (assuming the current rates for each, which were not in effect over the entire period, of course) and the cash outlay was (only) $131,000, with some of that offset by rental payments (most, perhaps, with taxes and common charges of only $1,313/mo now).

Still a pretty good deal, even if the seller did not have the opportunity to sell completely free of the tenant.

That’s the limit of what I know about this specific sale. But why have a personal blog if you can’t wander, and wonder….

this is a very funky building

I’d love to know the origin story of this condo, as it is rather unusual There are two commecial units on the first floor an in the cellar, then residential full floor condo units on the second through sixth floors. Property Shark shows a Condo Declaration was filed in 1992, apparently by the same three individuals who later transferred each of the condo units that have been sold since the condo was formed.

  • they sold the 6th floor for $460,000 in June 1996 to the person who is now the condo’s Head Officer (per that Property Shark page)
  • in August 2006 they sold the 4th, 3rd, and 2nd floors to the recent 4th floor seller, for $252,500, $800,000, and $252,500, respectively
  • they sold the commercial units in May 2008 for $500,000 and $,070,000

The 5th floor looks like the only unit this trio hasn’t controlled, as it was bought in 1992 by the guy who did a(n intra-family?) transfer in 2011 and who shows as having voted from here as recently as last year. (The Shark page, here.)

I can’t see if the trio were the individuals who formed the condo, but you’d think so from the fact that they owned 7 of 8 units from Day One. And I have to wonder what the 5th floor owner thought he was getting into in 1992, or the person who bought the 6th floor in 1996.

Then there’s our recent 4th floor seller. We know what he was getting into: buying rent-stabilized units in hopes of making a killing down the line. He sold the 2nd floor to an LLC in August 2010 for $1.375mm, in a public sale, without mention of a tenant. Then, as we’ve seen, he sold the 3rd floor for $1.823mm in a public sale in 2012, without mention of a tenant. Curiously (did I mention this was a funky building?) the 3rd floor buyer was the same LLC as bought the 2nd floor from the same seller in 2010. Of course, he just sold the 4th floor to an apparently unrelated LLC.

Over all this time, only the 5th and 6th floors have been publicly offered for rent (see the StreetEasy building page, Past Activity tab). Further confirmation (iff any is needed) that the 2nd, 3rd and 4th floors were occupied by rent-stabillized tenants since before the condo was formed until 2010 (the 2nd floor) and 2012 (the 3rd floor). (Clicking about on the Shark, you will see that someone living on the 4th floor has been a registered voter here since 1986.) I guess the recent seller finally got tired of waiting for her, but his gross numbers look pretty darn good: he bought three floors for $1,305,000 in 2006 and has now sold all three for $4,009,000, in 2010, 2012, and last month.

It pays to be patient, I guess. But this is not a game for the faint-hearted, or the thinly capitalized.

Now the question is, why haven’t the 2nd and 3rd floors shown up as public resales, or as rentals??

 

 

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