true artists’ loft goes under $1,000/ft in Soho, not the $1,250/ft they wanted

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

an artist’s life in a Soho loft, from back in the day

The listing photos and description for the recently sold “4,000 sq ft” Manhattan loft #3WR at 140 Grand Street are a form of time machine. Back to the 1970s, at least, when a loft this big would have but two (modest) bathrooms and one (count ’em) bedroom (also modest), with more than two-thirds of the space devoted to artist studios (two) and storage or “work area” (floor plan, here). The pix show the 12+ foot ceilings, the beaten to hell hardwood floors, windows that must be 9 x 4 feet, and abundant  evidence of at least one working painter and possibly a working sculptor. As if there weren’t enough space already, the high ceilings permit storage over storage in Studio 1. Walls, columns, beams, and ceiling are painted white (except over the kitchen), further lightening the space, as do pretty large clerestory windows.

There’s no marketing need to show the bedroom, the baths, the sauna(!), or the kitchen, as none of these elements will survive the first day of demolition, but I’d love to see them from an anthropology perspective (and to see if a kitchen qualifies as “Spanish styles” only by tile work). How the working artist lived ….

Curiously, the space as now set-up is oriented as though the stairs were the main entry rather than the “oversized keyed elevator which opens directly into the apartment”. The floor plan’s “entrance” is there, two apparent coat closets are there, and that is the single point that gives best access to both studios. The huge elevator, by contrast, enters at the darkest part of the loft, seems to face a utility sink, and is a long and very circuitous route to Studio 2.

If there is a quiet stretch of Grand Street, this massive and handsome building at the northeast corner of Crosby Street is in it. (The building photo in the listing is nice, but doesn’t do justice. The Property Shark selection of building photos are worth your gaze. And wonder.) More romance: the coop dates from 1977 (artist usage very likely preceded that), and the sponsor (original shareholders?) dubbed their cooperative enterprise Ironclad Artists, Inc. Gotta love that.

enough loft charm, let’s talk dollars

These numbers imply that the sellers were disappointed to get less than $1,000/ft:

May 16 new to market $4.965mm
July 9 $4.4mm
Aug 6 contract
Nov 25 sold $3.9mm

The dollar per foot values drop off pretty quickly with a loft as large as “4,000 sq ft”. Starting at $1,241/ft and getting (only) $975/ft doesn’t seem quite as dramatic as selling for more than a million dollars less than the starting point. That feels dramatic! As dramatic in a tawdry mercantile sense as 12 foot ceilings, cast iron columns, and huge factory windows are in a charming (authentic!) loft sense.

More data that imply disappointment: the adjoining loft is much too small as to be a direct comp, but the “1,200 sq ft” Manhattan loft #3ER sold in April 2013 for a heady $1,250/ft. (Look again at where #3WR started.) That loft sounds more “finished” than “mint”, though it is definitely at a higher level of renovation than a 4,000 sq ft loft that is mostly artist studio and storage. Loft #3ER had central air, classic lot tenements (of course), but boasted only of a modern kitchen with marble and stainless. Still: $1,250/ft.

The “2,000 sq ft” loft #3WF gets closer to #3WR in scale, and in condition. It was billed as a working studio, “fully wired and plumbed and is ready and waiting for your contractor to renovate”. It sold in February 2011 for $1.875mm, or $937/ft. Since then, of course, the overall Manhattan real estate market is up (by 15%, per the StreetEasy Index). More disappointment for #3WR.

If you need less cheer this holiday season, consider the loft I hit in my December 5, whatever an “ungentrified” Manhattan loft is, one at 33 Bleecker Street just got $1,317ft. That one was also much smaller than #3WR at 140 Grand Street, at only “1,200 sq ft”, but it needed a gut renovation and you know from the title the result in dollars per foot. Or (gluttony?) the move-in condition loft with classic elements at 132 Greene Street I hit in my December 9, ceilings + columns + beams + brick get authentic Soho loft huge premium, despite steps. That one is also smaller (“1,550 sq ft”) and was finished, but it is a third floor walk-up in Soho at an adjusted $1,447/ft. One more and I will stop: the “2,100 sq ft” loft I hit in my November 19, true sculptor studio loft at 561 Broadway needs gut, gets $1,141/ft, was true to its blog title in that it needed a gut renovation yet sold for $1,141/ft, 14% higher than loft #3WR on a $/ft basis.

Disappointment abounds!

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of course the Tribeca loft at 363 Greenwich Street did not double in value since 2004

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

nice return anyway, in Manhattan residential real estate terms at least

Nope, you can’t say that the recent owners of the “2,010 sq ft” Manhattan loft #2B at 363 Greenwich Street doubled their money when they just sold at $2.995mm after having bought way back in April 2004 for $1.5mm. After all, that’s $5,000 less than twice their purchase price. But you also can’t say that they doubled their money because they put a nice renovation onto what had been a 1-bedroom loft with 2 bathrooms, a dark room, and a sauna between 2004 and 2013. You could say that they likely much more than doubled their money, once you take into account their original down payment (unknown) plus their renovation budget (ditto), which figure to be in the half million dollar range, compared to nearly three million bucks, but then you’d have to factor in the mortgage balance (unknown) and mortgage payments and … it gets complicated.

Regardless of how well the recent owners did, we know that the loft (essentially) doubled and that this result out-performed the overall Manhattan residential real estate market over that time, at least as measured given ‘a feel’ for by the StreetEasy Manhattan Condo Index. From April 2004 to October 2013 (the last month available), that Index was up from 1,480 to 2,184, or (only) 48%. Let’s pretend that the 2004 renovation cost about $150/ft; the loft in selling for $2.995mm was still up 66% over the purchase + (assumed) renovation expense.

classic Tribeca loft, with some funk

Loft #2B has a classic Long-and-Narrow footprint, with windows only front and back. (It’s a floor-through but not a full-floor, as the condominium has 9 units with 9 windows spread across a long frontage opposite the northern Independence Plaza building.) The elevator is, as I have described in other old loft buildings, in the “wrong place”, taking up a front window, rather than further back along one of the side walls, as is common in loft buildings that were built with elevators. The two bedrooms share the back wall, with the plumbing arrayed in the middle of the long north wall. (Floor plan, here.)

The listing has no bedroom photos (other than the glimpse off in the distance of pic #4), which is a shame as I am very curious about how “bright” they can be. (“Quiet” bedrooms generally face the backs of nearby buildings; this is a second floor loft; and the liberal use of “frosted glass panel wall[s]” (see media room photo #4 and the floor plan with similar lines for the second bedroom) suggests this material was used to bring light into the back. Plus, I’d love to see what those lines in the second bedroom do, other then separating that room into two 9×9 foot squares.

I don’t love babbling that leads with awkward grammar stylings such as “classically-styled yet chicly modernized”, but it hits the high notes (my emphasis added):

luxurious light-filled living space, with high ceilings and refined finishes at every turn. The generously-sized living/dining area with oversized windows, hardwood flooring and white painted brick walls with original arched details is divine for entertaining, with meals served from the huge discretely hidden gourmet chef’s kitchen adorned with sleek marble counters and premier Miele, Subzero and Fisher Paykal appliances. Behind a frosted glass panel wall, the den/media room with a wall of custom cabinetry is the perfect spot to relax with a good book or movie. Both bedrooms are bright and quiet. The master has a separate dressing area with custom walnut cabinetry and an opulent ensuite bath with double sinks, a glass-enclosed rain shower with Dornbracht fittings and radiant heated floors. Other highlights include a stylish guest bath with a custom Calacatta marble vanity, soaking tub and radiant heated floors, Lutron lighting on dimmers throughout, plus a washer/dryer.

I also don’t love a “discretely hidden” kitchen that is, nonetheless, open to the dining room and (on an angle) the part of the living room. I get it that it is not a classic open loft kitchen configuration, but “hidden” implies a higher level of trickery than is evident here.

The proper proper names and materials suggest a near total renovation, sometime after 2004. Assume the hardwood floors and brick walls were restored (and in the case of brick, painted). You can’t see the former floor plan in our listing system, but it is very similar to the current set-up, which is less a suggestion that the renovation was limited than it is a recognition that there are only so many ways to use a limited set of plumbing stacks in a Long-and-Narrow footprint.

I happen to love the way that the panels inside the arched brickwork have been painted (one a rich blue, one a rich red, with no view of the other arch in the living room or the one in the second bedroom), but your mileage may vary. The primary colors are completed by the yellow sprinkler pipes below the ceiling, another nice (loft-y) touch.

I am so easily distracted by odd loft elements

Do you see that door and insert (fire door?) on the long (south) wall on the floor plan? At first scan I assumed that that was the elevator entrance, and the opposite door in the front corner cut-away was to a stairway. But that is incorrect, as the Google Streetview shows the outline of cinderblocks in the windows directly above the blank wall just to the right of the Pig ‘n Whistle’s red column and just to the left of the condo entrance marked “363”. Obviously (as noted above), the elevator is in the ‘wrong’ place, in a front window, and loft #2B includes the window just above the “363” entrance and the next one to the right.

Then I got fixated on that change in floor height around that door on the south living room wall. (You see the sunken square with a red floor mat in the left of the first listing photo.) What the …? You’d think there is another loft in the same condo on the other side of that wall, rather than a common stairway. (Again, look at Google StreetView for the from window array; there are 3 windows directly above the Pig ‘n Whistle and another 3 on the other side of #2B.) Whether or not that neighbor has a separate entrance (again, the StreetView distracts me on this), there has to be another loft behind that south wall door in #2B.

Why is it sunk below the level of the current floor? Is there a similar door on the other side of the brick wall, similar offset and lower in that loft’s floor? I assume that in buildings of this age, the arched brickwork means that there were a series of co-owned buildings (in this case, apparently 3) in which material could be moved from one building to another, through those (at one time) open arches. But I’d love to know …. (Sigh.)

nice comp, for this sale

Loft #3A sold last year, so we have a basis for comparing the recent #2B sale as well as another floor plan in this condo to tell us how the puzzle fits together. First, to the puzzle. The #3A floor plan fits nicely alongside that of #2B, once you flip the #3A plan over. The plumbing walls are back to back, and that #3A entrance could easily be a different wall in the same keyed elevator that services the “B” line. This would make #3A the loft two floors above the Pig ‘n Whistle, those first 3 windows from the north.

Loft #3A was also nicely renovated and enthusiastically babbled, and is essentially the same size as #2B (StreetEasy says “1,974 sq ft”, the babble claims “in excess of 2,010”), with “high ceilings” that are probably not as high as the 11 foot ceilings on the second floor (compare the window heights in the listing photos). Loft #3A got a quick contract last Spring off an ask of $2.65mm before closing at $2.525mm on July 13, 2012. Since then, the StreetEasy Index is up 10%, which would imply a recent value of (only) about $2.75mm for a comparable loft. Loft #2B seems to be that comparable loft, but it sold for $2.995mm, an ‘extra’ $220,000 or so, 19% above the #3A sale 17 months ago.

Maybe The Market gives #2B a premium for (slightly) higher ceilings, or for that hidden kitchen (that of #3A could hardly be more open), or for having (what looks to me as) a more loft-y feel. But #2B just sold for more than this 2012 same building comp implies, as well as more than the StreetEasy Index implies as a same-loft sale pair from 2004.

I don’t think that loft #4A is a good comp, even though it is more current than #3A, having sold in March 2013 for $4.9mm. Loft #4A has many more differences to account for as a comp for #2B: it is much larger at “3,006 sq ft”; it has two terraces of almost 1,000 sq ft to be adjusted for; it was probably renovated to a higher standard than either #2B or #3A (“ZenSational” and all that), as I hit in my April 11, penthouse loft at 363 Greenwich finally sells, only 29% above 2004. Plus, #4A has an opposite relationship to its prior sale in 2004 than #2B: #4A sold for $3.8mm in July 2004, so gained only 29% by 2013; a much smaller gain than that of #2B over essentially the same period. I wasn’t playing with the StreetEasy Index when I did that post 8 months ago, but the Index was up 22% over the period covered by the two #4A sales.

That puts #4A in a different light, but let’s stop there. (Or else I would wrestle with the June 2010 sale of #3B at $2.6mm. Hmmm….)

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no-lofts diversion is in keeping with the season (almost) (not really)

by Sandy MattinglyPosted on Posted in caution no real estate content — No Comments ↓

the snow will sat only until the rain comes

Of course it is a lovely New York City day, with snow falling softly. But it should be gone by morning, after overnight rain. Which brings to mind the greetings of the season: only 8+ weeks before Pitchers & Catchers report to Spring Training! (What … you had another festive event in mind??)

At this point, the Cleveland Indians will be the first team to report, on February 11, with the Yankees on February 14 as they begin Year Two of Five Dark Years. Full schedule, to be updated, here.

With snow baseball in the air like this, take a moment to read this nice little piece on Grantland about the wonderful Roy Halladay. Obviously, I’m no fan of the Jays or of the Phillies, but the guy was both very successful and very classy. Best of luck in the next stage of life, Doc!

With snow baseball (still) in the air, I offer this commentary from the often-sanctimonious Rick Reilly. In this instance, he makes a point that I have myself made following the news that the unneccesary Veteran’s Committee of the baseball Hall of Fame admitted managers Bobby Cox, Joe Torre, and Tony (“smartest guy in the room”) LaRussa. You can’t think of the PED scandal that is keeping implicated players out of the Hall of Fame without thinking of LaRussa and Torre. Let’s just say it is unfortunate for these managers to get into the HoF based on win totals (shall we say) enhanced by tainted players; worse, these managers were, at best, negligent in not realizing what their players were doing (more likely, the correct explanation is ‘turned a blind eye’).

OK, one more, on a more benign note: a major league baseball genealogy, showing where each of the current teams came from and where the defunct franchises were, from The Atlantic.

Don’t wait to enjoy the snow … it’s not staying very long!

 

what did a “flawless renovation” of 315 West 23 Street loft cost, to generate 60% premium over Peak?

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

big bang for those loft renovation bucks in Chelsea

This looks like a form of Manhattan loft alchemy to me: the (possibly) “1,200 sq ft” Manhattan loft #6C at 315 West 23 Street (the Broadmoor) was just sold for $1.625mm after having been purchased in January 2008 for (only) $999,000, having “been flawlessly renovated to meet the highest standards” in between. The math is pretty easy, given the near-round-number Peak price: that’s a gain of $626,000, or 63% over the (former?) Peak of the Manhattan residential real estate market. In terms of the StreetEasy Manhattan Condo Index, the January 2008 to October 2013 change was 3.5%, so the change in condition has to account for nearly all of that gain of $626,000. Yet there is no way that the intervening renovation cost much more than half of that (and probably cost less).

“before” is a little vague; “after” is a lovely loft that still has some limitations

If you start on StreetEasy you get a maddeningly opaque listing description preceding the 2008 sale, no interior photos, and a floor plan that might have been sketched on a napkin. This is what I mean by maddening: a loft that (we now know) underwent a substantial renovation was then babbled as “magnificent”, and more.

this magnificent and bright two bedroom apartment featuring five large windows, open kitchen, breakfast nook, and plenty of close space throughout. This apartment will excite you with its artistic combination of patterns which include a beamed ceiling at varying heights and a layout that will mesmerize you.

That doesn’t sound like an in-need-of-gutting loft, but the facts suggest otherwise. (By the way, you don’t often see broker babble that misstates the number of windows, but that’s just icing on the maddening 2008 cake.) More maddening: I have no idea what “artistic combination of patterns” means, or what might mesmerize you about a simple rectangular layout with bedrooms at either end. But I digress….

That (simple) layout, back in the day, featured a single bathroom, awkwardly en suite in the east bedroom. The new layout is equally simple (without being, you know, mesmerizing), but adds a second bathroom abutting the old-but-now-renovated one, adds a walk-in closet in that east (master) bedroom and a closet wall in the west bedroom, and brings the kitchen further west (into a “U”, instead of the former, shorter, “L”). Not a lot of new carpentry there, some new kitchen work, and one new bath with the other “completely renovated”.

The 2013 babbling lacks details about the quality of the upgrade (beyond “flawless”):

sprawling 2 bedrooms/2 bathrooms loft has been flawlessly renovated to meet the highest standards. The southern exposure helps soak the home with sun and offers the classic Chelsea skyline views from every room. At the center of it all is the newly renovated and extended kitchen that is open to the living room and dining room. Making it the perfect place for the gourmet chef that loves to entertain! This high floor residence is the quintessential loft with high beamed ceilings, original hardwood floors, and two split bedrooms. The master bedroom has an incredibly large walk-in closet and a completely renovated on suite bathroom.

(Still maddening: “on” suite bathroom!)

You see no proper proper names or materials in the 2013 babble and if there are any in the photos they are not evident. Kitchen appliances could be GE Pro, but if the counters or backsplash are brag-worthy the marketing effort is curiously modest. Note there are no photos of the new or renovated bathrooms. Note that there are no special built-ins in the babble or in the photos, though I assume the radiator covers are new.

Did you see the window air conditioners in each room? I assume that there is no way to do central air in this space, either because the ceilings are too low or because there is no place to hang compressors or something else. But that is a major limitation for a loft sitting only 50 or so feet above the all night buses and truck traffic on West 23rd Street. You are going to get noise bleeding through those air conditioners no matter how high quality the windows are. (Did you see anything in the broker babble about Pella or other brag-worthy window upgrades? I didn’t either.)

How “sprawling” can a “1,200 sq ft” loft with bedrooms at either end be? Each room, to me, is more “modest” than “sprawling”, and the layout as a whole reads as more limited than mesmerizing (sorry) voluminous, or sprawling. (Note the modest ceiling heights in this former hotel.)

Net-net, a nice little loft, efficiently laid out and nicely (sorry) flawlessly renovated. That just sold for $1,354/ft in a coop that is not known for being a deluxe building. Unless the renovation reads in real life as much more high quality than it appears in photos, this is a head scratcher. That’s if the loft really is “1,200 sq ft”. It was billed as “1,050 sq ft” when it sold in 2008, and is carried at that size in our data-base. (At that smaller scale the recent sale was a rather remarkable $1,548/ft. In a coop that is not known for being a deluxe building.)

 

comping lofts should not be this hard

The Market says that this loft is now worth $626,000 more than it was before it was renovated. The listing photos show a loft that is nice, but hardly over the top in quality, no matter how “flawlessly” it may have been renovated. The Market says this is the most valuable loft in the building, a building in which 3 other similarly sized lofts have sold in the 12 months before this one did.

The “1,200 sq ft” loft #7F sold this past April for $1,500,315 (above ask, setting a new building record, temporarily). That claimed a “top rate renovation” with a little more detailed babbling than with #6C and photos that show a level of finishes that appear to the the equal to that of #6C, if not better. (Note the black granite countertops, custom built-ins, recessed lighting, and Empire State Building views.)

Loft #10B sold for $1.375mm in March. It might be “1,300 sq ft” and looks and sounds like a similar quality to #6C, though it is dangerous to put too much into how a loft “looks and sounds” on the inter-tubes.

Loft #5D sold 51 weeks before #6C for $1.275mm without much bragging (and with a kitchen that might be from the 1980s). At “1,200 sq ft”, it was close to historic highs in the building for its time, with only a few lofts having sold at higher prices on a dollar-per-foot basis. (Scan the past Activity tab on the StreetEasy building page, here.)

In this sequence, #7F looked like an outlier when it sold; #6C sticks out more. In a building in which a lot of loft sales bounced around $1,000/ft, #7F and #6C may be resetting the bar. Neighbors will be happy. Buyers will be frustrated.

But I come back to this: the #6C buyers in 2008 turned sellers in 2013 sold for $626,000 more than they paid for it, after a renovation that probably did not cost $300,000. My money is on less than $300,000, and I would have to see receipts to be convinced otherwise. What a strange and wonderful (for them) thing. Caveat emptor, indeed!

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Chelsea House loft at 130 West 19 Street provokes delayed bidding war

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

a fascinating sequence finally gets this loft off to the races

It took the “1,596 sq ft” Manhattan loft #9A at 130 West 19 Street (the Chelsea House) 9 weeks to get into a contract above ask, but that is not the most unusual thing about the listing history. I find it fascinating that after 4 weeks at the ‘wrong’ price, the price drop of $100,000 eventually generated a bidding war so fierce as to drive the sales price above the original (‘wrong’) price. We are in a market in which the ‘right’ price is often discovered quickly (15 of 55 loft resales in October with contract dates on the Master List of downtown Manhattan loft sales between $500,000 and $5mm went to contract within 30 days), yet this one needed time and a price drop. I would love to know the unknowable (I am that kind of Guy): did that price drop generate enough competition to drive the price above where it would have gone had the original (‘wrong’) price been left in place long enough to provoke someone (and I mean some one) into bidding? These dates make that supposition plausible:

July 11 new to market $2.55mm
Aug 6 $2.45mm
Sept 13 contract
Nov 4 sold $2.6mm

The loft wasn’t out there long enough that this would be a Rising Tide deal, such as the Noho loft that I hit in my November 26, a rising tide floats 712 Broadway loft in upper Noho to full price after 10 months, which took almost a year to get a full price deal. But it also wasn’t like the 15 October sales that went into contract within 30 days, 13 of which went above the last ask but (only) 11 of which went above the first ask (meaning, there was an intermediate price drop to a price that was higher than the last ask but lower than the first ask). Note to self … blog about the above-original-ask sales that took longer than loft #9A at Chelsea House….

another (less exciting) theory

In re-reading the broker babble, I originally overlooked the last sentence, which might account for why this loft took a little longer to get into contract, even if priced right at the start: not many buyers will defer moving in for 3 or more months after closing:

Create a well-proportioned 3 bedroom home from this oversized 2 bedroom, two-bath apartment at the Chelsea House. This sun-flooded apartment has floor to ceiling windows and an extra-large living room. See alternate floor plan included with original layout. The open chefs kitchen has stainless steel appliances, Macassar Ebony cabinetry, and granite counters. The master bathroom has a soaking tub and separate glass shower. There is Santos Mahogany floors throughout, high ceilings, and a washer/dryer. The building features a 24 hour Doorman, private storage, a fitness center, media screening room/ playroom as well as a spectacular roof deck with cabanas, outdoor fireplace, and grass area. Tenant in place until February 2014.

(Emphasis added.) That delay between writing the check (starting the mortgage obligation) and getting to enjoy the space will shrink the buyer pool. Someone highly confident in the original pricing might wait longer for a buyer to emerge, as a result. But this someone seems not to have been so confident about prices (hence, the $100,000 drop). Interesting….

remember the nuclear winter for Manhattan real estate?

We seem to have settled for ’13-’14 into a typical winter weather pattern in New York, and the prior listing history of loft #9A reminds me of the non-meteorological winter of ’08-’09. The faceless LLC that paid $1,985,587 to buy from the developer in May 2007 was willing to sell at a loss for 5 months beginning February 2009 (asking $1.9mm), but The Market wouldn’t let it! (It doesn’t look like anyone in the LLC ever lived here, as our listings data-base shows that the two times the loft was offered for rent, per StreetEasy, the place was quickly rented; since the loft was offered for rent immediately after the sponsor purchase, I have to assume the first asking rent was a good economic deal for the LLC, so that the two rentals were no worse than a few thousand a year hits.)

With this background, and no need for the LLC to have to move somewhere else to live (unlike a natural person, d’oh), the eventual sale at $2.6mm looks like a pretty good day for the LLC’s balance sheet.

’tis the season

Sticking with the theme of mashing a seasonal term used as real estate metaphor with a seasonal term used for, you know, a season, let’s look at the loft. The condition is state of the (mid-market) art, circa 2007, as the loft appears to be unimproved since the sponsor sale. The footprint is easily mistaken for that of a classic loft, and is different from the … er … cookie cutter floor plans in other units in the building. Yes, the babble claims you can create a 3-bedroom, but as with many Long-and-Narrow floor plans with windows only front and back that are not wide enough for 3 bedrooms across the back wall, if you add a third bedroom to the front you will severely reduce the light and volume up there. If you do that, the resulting living area will be (they say) 23’11” x 12’3″, which is (as they say) “well-proportioned” in an Upper West / East apartment sense, though not from a loft-y perspective.

Loft lovers who had to have 3 bedrooms would likely buy a different property than buy this 2-bedroom and shrink it up front for that essential third bedroom. But if you own it you can do whatever you like. I won’t judge, though I may try to interpret what The Market thinks when there is a sale to consider….

 

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NoLIta neighbor buys neighbor’s modest loft at 225 Lafayette Street at a modest price

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

yes, Virginia, we live in a Manhattan loft world in which $1,789/ft is modest

Last week we saw that a Tribeca penthouse loft owner with a lot of space was able to persuade his next-door penthouse loft neighbor who also had a lot of space, to sell so that the first guy could combine the lofts into a great deal of space (over 4,500 sq ft interior, a variety of private terraces outside); that was my December 6, 110 Duane Street penthouse loft owner loves it so much he bought another one. Among the interesting facets of that private deal was that pricing was relatively modest, i.e., there was no obvious extortion by the seller (who never announced publicly an interest in selling) of the unique buyer next door (who had the means to put together two lofts purchased for over $7mm). Today’s example of neighbor on neighbor action is similarly benign: the owner-since-2005 of the “936 sq ft” loft #4B at 225 Lafayette Street was persuaded to sell privately to the owner-since-2005 of the “1,168 sq ft” loft #4A for $1.675mm.

Among other things, that price is only a 24% premium over the price the recent seller paid to buy #4B in April 2005, it is a significant premium over the last closed sale in the building (#8C sold for $1,602/ft in May 2012),  and it is quite rationally related to the asking price of loft #9C, which was in contract off an asking price of $1,836/ft at the time that the fourth floor neighbors made their private deal (even if the fourth floor folks knew that #9C sold above ask at $1,873/ft, that can be rationalized with #4B at $1,789/ft, given the difference in floor height, and the “open views and amazing light” up there).

There’s a lot of data to unpack in those preceding introductory paragraphs….

what’s to be gained with another loft?

Whether it’s a growing family or growing financial resources and a desire to spread out a bit, buying the loft next door can address some obvious needs or desires. In this case, it may be the desire for a real second (or second and third) bedroom or it may simply be the desire to almost double your space without having to move. There’s no public listing from when the recent #4B buyers bought their base of #4A but we know the condition in which lofts here were sold by the sponsor, and we have in our listing system the #4A floor plan, which is not quite identical to that of the “1,281 sq ft” #8A, which was recently offered for rent.

If you look at the building photo in that #8A rental listing (listing pic #6) before looking at the #8A floor plan, you will note that the base of the building has columns that extend just above the height of the 4-story building to the right (south). Loft #4A is at the top of that base; its “1,168 sq ft” floor plan differs from the “1,281 sq ft” plan of #8A in two significant respects: the columns in the base cut into #4A from the middle of the living room / dining area into the master bedroom (hence, the difference in size); and the fourth floor does not have the two south windows seen in #8A in the living room and den (hence, #8A can be used as a true 2-bedroom, with that den having both the dimensions and window of a legal “bedroom”, except that those windows are lot-line windows so it is still labeled “den”).

The “A” line above the fourth floor thus has significant advantages over #4A: the two southern windows bring in light and (at least by the 8th floor) the “A” line looks across rooftops all the way across Lafayette Street and Cleveland Place (with the triangular Petrosino Square tapering off between them). The #4A floor plan has a dark south wall, so less light, and a den that is-a-den-is-a-den. A 1-bedroom loft, though “1,168 sq ft”. The “936 sq ft” #4B floor plan has the same cut-out for those base columns as that of #4A, with the bedrooms in the two lofts being side by side.

While it is a simple matter of combining the two units by breaking through the bedroom-to-bedroom wall, the integrated space will be better if the usage switches to using the old public space in each loft for sleeping, and the old master bedrooms as a combined living / dining area. Even a real estate agent can see how simple it would be to have 2 bedrooms on opposite ends plus den / guest room, with modest additional expense to turn the #4B kitchen into part of a master bath, and similarly modest expense to extend the #4A kitchen into the space that is now the half-bath in that unit. Professionally creative people may have more sophisticated ideas, but this is an easy combo, starting from a rectangle with a long wall of windows facing west and multiple plumbing risers on the interior (east) long wall. Not to be rude, but the two lofts separately are rather … cookie cutter; together they can shed that tawdry label.

at what cost?

Now that you know that these 4th floor lofts lack south windows that higher floors have and are slightly more narrow because of the base columns and do not clear the rooftops to the west, look again at the $1,789/ft paid for #4B compared to the larger “C” line sales (“1,498 sq ft” of true 2-bedroom + 2.5 baths): #8C in May 2012 at $2.4mm ($1,602/ft) and #9C a month ago at $2.806mm ($1,873/ft). The #4B seller charged only 4% less than the above-ask deal for #9C (before taking into account the fact that the #9C seller paid a sales fee; the #4A seller did not). So, a strong but not extortionate price. By which the #4A owner doubled his space by adding the unique loft next door.

Nicely played all around; nicely played.

a word about same-sale indices…

I mentioned in the intro that the #4B seller got out at only a 24% premium to her purchase price from April 2005. Fans of the StreetEasy Manhattan Condo Index will want to know (may already know!) that the Index was up (only) 21% in that period. Kinda sorta another indication (though just a ‘feel’) that the #4B seller reached a fair bargain with her next-door neighbor. But if you look at the full #4B history you see that the recent seller was not the original owner. Too bad for her, as she paid her $1.345mm in April 2005 to the buyer who paid only $911,333 to buy from the sponsor a mere 9 weeks before flipping to our recent seller.

I’ve mentioned before the difficulty of using sponsor sales as “market values”, even though they were between willing buyers and willing sellers, with neither party being under undue compulsion. The sales prices imply the market for this loft went from $911,333 in February 2005 to $1.345mm two months later. Of course, with new development sales there is often a time lag between contract and closings; in this case our listing data-base shows the original buyer went into contract to buy #4B in January 2004, 13 months before closing.

I’m not going to argue that the overall market was up 48% in those 13 months, but the data points indisputably show that the hyper-local market for this loft increased by that degree in that time. (Fans of the StreetEasy Index will want to know [may already know!] that the Index was up a dramatic 23% in that short period.)

What I am going to argue, or at least point out, is that if the recent seller had been the original buyer, we’d be looking at a same-loft sales pair that increased 84% from February 2005 to October 2013, compared to the StreetEasy Index at only 24%. You know this, but let’s repeat. Caution: same-loft paired sales that start with a new development purchase often do not reflect true market changes; those that are less dramatic than this (which is likely to be caught in StreetEasy’s algorithm as an outlier) may still give you an inaccurate ‘feel’ for The Market.

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ceilings + columns + beams + brick get authentic Soho loft huge premium, despite steps

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

bringing together Manhattan loft threads about walk-ups and character

Of course the recently sold “1,550 sq ft” Manhattan loft #3R at 132 Greene Street at the top middle of prime Soho is most obviously noteworthy because it sold for $2.351mm on a deal that took only 13 days off an ask of $1.995mm: even in these heady days, 18% above ask is impressive. But regular readers of Manhattan Loft Guy will also find that this loft as a third floor walk-up fits into my Old Grey Lady rant (December 4, what do manhattan lofts and walk-up apartments have in common?) and my appreciation for classic lofts but not for “ungentrified” broker babbling (my December 5, whatever an “ungentrified” Manhattan loft is, one at 33 Bleecker Street just got $1,317ft). I rejected the Satow Theory of a Stair Premium in that first post, so I don’t think the fact that loft #3R sold for so much so quickly is positively related to the lack of an elevator; but I always appreciate classic loft features, and that second post shows The Market does as well.

That Noho loft that sold at $1,317/ft needed a total gut renovation (it being “ungentrified” and all); this one in Soho does not need a gut (it has a kitchen with top appliances, a bath and a half of well-renovated plumbing, and appears to be in very good shape) though some may want to reconfigure the tight mezzanine, and it sold for $1,517/ft before adjusting for a terrace of perhaps 150 sq ft (say, $1,447/ft, adjusted). That’s actually a small premium over the ungentrified Noho loft just about 5 blocks east and one long block north, given the difference in condition.

Let’s talk about that condition, and configuration.

did I mention the loft-y bricks or the columns?

The first and third listing photos are especially delightful for lovers of classic Manhattan lofts. The “13’+/- ceilings” are supported by a massive wood beam and three cast-iron columns, and feature four knee-to-ceiling windows. One long wall is mostly brick, the other has some brick, and the narrow window wall is brick where it isn’t windows. Sitting in that tall open great room must be an extremely (and classically) loft-y experience. Did I hint (strongly enough) there are some issues with the configuration?

After you’ve clicked through the 6 interior listing photos and scanned the floor plan, you will notice some things that are not pictured directly. The master and second “bedrooms” for example, or the den, or the half bath upstairs. All these elements have in common the mezzanine that uses those “13’+/- ceilings” that keeps this from being a very limited loft with a single exposure and a high ceiling.

The den and the master “bedroom” above it fit under the “13’+/- ceilings”, so are more or less 6 1/2 feet “high”. The second “bedroom” sits on top of the shower in the full bath (see listing pix #5 and #3); again with a short ceiling. Here’s how awkward the mezzanine is: there is a straight stair to get to the master “bedroom” but the second “bedroom” needs a separate spiral stair because otherwise access would be through the master and through the (shared, dual-entry) half-bath. And no one is going to sleep (well, at least) in that master if there is someone else in the lower level using media without headphones, as the master is open to below over both the dining room (see listing pic #6) and the foyer.

The layout works for a limited set of buyers, and perhaps for them ideally for only a limited time. The best users will be those who need only one space for people to sleep, who can use that second bedroom as an office / guest room. Next best, people with one child small enough to fit into that small bedroom but big enough to navigate the spiral stairs safely. (The shared upper half-bath is more than metaphorically a life-saver.) I didn’t notice a ceiling fan in that long-range view of the master, but it will get warm up there without one, so far from that a/c unit hanging off the ceiling near the first window.

In addition to the volume and the classic loft elements, the loft boasts that terrace (more likely, a “balcony”, but let’s not keep quibbling). Listing pic #7 must have been taken in the morning, with the sun coming in over the buildings on Mercer Street that share the mid-block interior with the Greene Street neighbors. Looks like a lot of sun, at least in the morning, at least in the summer, on a balcony wide enough for a cafe table and more planting than the sellers have done. A usable outdoor space like this always enlarges a loft, especially one that is as space-challenged as this one.

the non-event next door is an interesting comp

Loft #3R came to market, as noted, at $1.995mm on June 14 and was on contract by June 27 at that premium price of $2.351mm. The loft in the front of the building competed against #3R head-to-head, briefly, and lost, badly. Loft #3F came out on April 24 at $2.05mm, dropped to $1,999,999 on June 19 (just after #3R came out), and retreated from the market on July 9, unsold. Obviously, the folks who bought #3R at $2.351mm could have bought #3F at a buck below $2mm (as could everyone else), but chose not to.

This pair will make Julie Satow of the New York Times beam: similar broker babble to that of #3R (“gorgeously renovated and peppered with unique details…. soaring 13 ceilings, original metal columns, exposed brick, wainscoting and an industrial-chic chef’s kitchen”; is that a tin ceiling??), with a larger footprint (our listing system has #3F at “1,800 sq ft” and #3R at that “1,550 sq ft”) all on one level and very good light (“flooded with natural light”), but a single bath. No terrace in the front, but there’s that elevator instead. The Market clearly preferred the mezzanine + terrace – elevator to the space + elevator. Curiously, the two units, for all there structural differences, have the exact same monthly maintenance of $1,855/mo.

That means that at birth, the coop issued the same number of shares to each, and got a certificate of reasonable relationship for that allocation (a proxy for equal market value) at that time. There’s no need for proxies in 2013: #3R is worth exactly $2.351mm, while the unknown value of #3F is something under $2mm.

I haven’t seen the two units, but my only guess from the listing photos is that the ‘character’ of #3R is dressed a bit better than the ‘character’ of #3F. The brick looks better in the back, the beam looks better, even the columns look better there. And that “industrial-chic chef’s kitchen” in #3F doesn’t look as chic as its counterpart in the rear.

Did I mention that comping is hard? It would be both easy and pretty cheap to add a mezzanine to #3F to duplicate the bedroom plus bath above the same elements on the main level. And cleaning up the classic elements in #3F to match the quality of #3R would take more talent than dollars. Even the kitchen can be spruced up in front, without spending anywhere near $351,001 on all these projects. That would leave #3F with similar quality, a bit more utility due to the hypothetical mezzanine, and an elevator instead of stairs (or a terrace).

Since I reject the Satow Theory of a Stair Premium out of hand, all I can offer is that the condition and the terrace make the difference between this sale and this non-sale. That hardly seems rational. but it also seems to be true. Somebody overpaid for a terrace who didn’t want to buy + fix.

(Cue the grumbling by efficient market fans, and by people who think walk-ups have no premium value, as such.) Grumble, grumble.

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110 Duane Street penthouse loft owner loves it so much he bought another one

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

 no extortion evident in this neighbor-to-neighbor Tribeca loft  sale

Whoever is behind the LLC that bought the “2,254 sq ft” penthouse loft #PH3N a year ago October from the developer for $3,309,312 just bought  the “2,297 sq ft” penthouse loft next door (#3S at 110 Duane Street) for $3.75mm in a private deal. Long-time readers of Manhattan Loft Guy know that I love to look at private deals to see how the prices relate to (possible) market value, sometimes going so far as to call it ‘extortion’ when a neighbor requires an apparently healthy premium over market to sell to the unique buyer next door. (See past posts collected under the tag “extortion”; there are at least 10, with the last being my August 7, 1 Worth Street loft neighbor bails out neighbor, at a (likely) discount, which came at it from the opposite perspective.) Note that I am not criticizing anyone who does that, as the situation is often one in which the seller has to be persuaded to sell.

The sales price of $3.75mm for penthouse #3S does not seem like one of those ‘extortionate’ deals, as that seller had paid $3,431,502 to buy it from the developer in July 2012. If you are scoring at home, that’s a gain of only 9% over a time that the StreetEasy Manhattan Condo Index was up 10%. Granted, the seller ‘saved’ 5% or 6% on a sales fee (though had to pay New York City and State transfer fees on the exit), but that spread is hardly extortionate.

living large, Manhattan loft style

The result is a to-be-combined 4.500 sq ft duplex penthouse with one lower level balcony and four upper level terraces (the largest pair of which probably abut), solving the most awkward thing about both of the pre-combination penthouses. The floor plan for #3S presumably connects to the floor plan of #3N at the kitchen wall of each (mentally flip the #3S plan 90 degrees to the right to fit the two together). With space of this scale there are a huge number of possible configurations for the combined space, but the problem that gets solved is that in their pre-combination states, both penthouses had access to the largest terraces only through the master bedrooms upstairs. That’s awkward. (Not as awkward as the smaller upper level terraces in each penthouse, accessed only through their respective master bathrooms, but awkward enough.)

Once combined, I’d guess there will still a master bedroom on the top, but the other one becomes a media / den / entertaining space with the most frequently used doors to the terraces. Before any walls come down inside each unit, there are 6 bedrooms and a library, so there is likely to be a much larger (truly) great room in the new configuration, probably dictated by whether there is a better view north or south. (Only the north unit seems to have the arched windows on the lower level, so I’d guess that’s where the largest public space in the new loft will be if the views or light are at all comparable.)

The LLC is going to spend a fair amount of the renovation budget on demolition, though there is no limit to what someone could spend upgrading spaces like this, given that they are already in for $7 million for the two purchases. My guess is that they essentially combine the two kitchens, as at this point neither alone is of the scale that can support a 4,500 sq ft lifestyle, with another few thousand feet outdoors. I never get this lucky, but I’d hope the combination work is so spectacular as to be picked up in design or architecture or lifestyle magazines and lives to be featured in a Loft Peeping feature on Tribeca Citizen (like this bit of Loft Peeping of the truly opposite kind of loft in Soho). A Guy can dream, can’t he?

Net-net, this looks the best kind of deal: a fair price for the seller of #3S and the the new owner of this entire floor. With the outcome that a truly spectacular loft will be created.

Nicely played, LLCs; nicely played.

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whatever an “ungentrified” Manhattan loft is, one at 33 Bleecker Street just got $1,/317ft

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

breaking barriers in broker babbling about Manhattan lofts since …

There’s nothing wrong with calling a Manhattan loft “ungentrified”; it’s just a tad obscure. Does it mean the hipsters haven’t moved in yet? (Probably not.) Does it want to imply that you should bring your architect, or create your dream home, or that work must be done? (This track gets somewhere.) Maybe it is a synonym for “original”; that would certainly imply that a buyer should bring a renovation budget. The “1,200 sq ft” Noho loft #3A at 33 Bleecker Street stares right down Mott Street and drops the Q-word; it was definitely marketed as a project:

Quintessential old time terrific Noho loft with character and charm, wooden beams and columns, row of windows facing south, sun flooded and cheerful and utterly ungentrified. Charming tree line block. Not to be missed! 2 bedrooms (one interior), office and one bath.

For so few words, there are a great many listing photos. (The effect of using photos of the empty loft, then photos of the same rooms full of furniture and stuff is a little like the transition of The Wizard of Oz to color.) Yup, a quintessential loft, with character and charm, wooden beams and columns, but you need to go beyond the text to the photos and the floor plan to see the scale of the project ahead of the new owner. There’s one bath (about the size of the kitchen) and no kitchen or bath close-up, so assume that you probably won’t even re-use the stainless appliances seen only off in the distance. Mark the plumbing risers, erase the lines, and start over. You’ve got those wooden beams and columns, tons of brick, and four south-facing windows (Mott Street!) that might just seem to get smaller the closer you get. (Talk about ” … to ceiling” windows! These look jammed under the ceiling.) The single exposure and sharp angle in the southeast corner make for a challenging footprint.

The bathroom is too big for the whole space, that home office is too small for any other use, and the set-up is way too cramped, as-is. I will bet you a quarter that the first wall that went up in the loft was for that (interior) “bedroom” and that it may have been added some years after the recent sellers moved in. Another quarter says the next wall closed the home office nook, with the front bedroom having been added when the kids (twins?) arrived. The problem with this piecemeal adaptation is that the front area would have some volume, if only that bedroom weren’t there so the 4 modest windows would be seen as much as possible. I’d also try to make the columns free-standing, rather than have two in a bedroom wall and a third in a bedroom corner.

You have a lot to work with (columns, beams, brick), but not a lot of space in which to work, and not many (small) windows. If you need more than one sleep area, push that home office corner a little west and a little south, but get rid of that windowed bedroom. Open, sesame! (Please.)

meanwhile, the loft sold twice, quickly

No way to know what happened to the first contract (unless you know someone in the deal), but the loft found a quick deal off an ask of $1.55mm and then another quick deal off a higher ask. Despite selling for higher than the original asking price, this sale gets no shaded numbers on the Master List of downtown Manhattan loft sales, because there was a price change and because the sale was at a discount to last ask. (Sellers don’t care because they got more than they started at; but the lack of color on this line of the Master List is anomalous.)

May 1 new to market $1.55mm
June 6 contract
July 22 back on market $1.595mm
Aug 15 contract
Oct 28 sold $1.58mm

That’s just 5 weeks and 3 weeks to each contract, but the whole thing took about 15 weeks to get the deal done that finally stuck. Even without a green number for an above ask sale, or a blue number for a no-change-in-ask price, this is yet another sale that shows the velocity in the Manhattan residential real estate market. Buyer beware, indeed.

The buyers are going to do $250/ft in renovations, if not more, so they will push their investment around $1,600/ft. For a no-frills coop. With a single exposure and 4 cramped windows. And they will find it challenging to have more than one sleep area. Best of luck!

There are no relevant building comps. There are only 10 residential units in the building, none of which have changed hands insofar as StreetEasy has any data. Our listing system has four prior residential sales, but they were in 2002, 1999, 1992 and 1991, so of no use for comping. Props to the sellers for working in that comp fog at almost exactly the right price.

losing lexicography, or, repairing the broker babble balance

It took me quite a while to realize why that “ungentrified” bothers me as a professional sales person. Is its opposite (“gentrified”) ever used as a compliment? (A: not any more.) Hence, the “un” word tells you that you have to take it from its “un” state (idyllic, pre-gentrified) to make it modern but accuses you of doing a bad thing once you change the “un” to “gentrified”. Too cute by half. Read the babble again, but leave off the last 3 words of the first sentence. Better?

I will stop now.

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what do manhattan lofts and walk-up apartments have in common?

by Sandy MattinglyPosted on Posted in manhattan real estate business — No Comments ↓

the Real Estate Industrial Complex, Manhattan Media Division, always in search of an angle

You saw that article in the holiday weekend New York Times Real Estate section, Stair Masters, about the (ahem) ‘bragging rights’ associated with living in Manhattan buildings without elevators. A nice fluffy bit for the readers still bloated from stuffing and pie. Of course it is full of sales-y BS and ‘insight’, with a smattering of (seemingly) relevant data. I will get to that critique below, but note how well these sentences work with a slight change in text:

“There is a new generation of renters out there who don’t need a doorman, and want something unique and different,” said [a sales person]. “Walk-ups [Lofts] can offer a wonderful combination of old prewar New York mixed with new design, and that can be hard to find in a cookie-cutter doorman building.”

***

In addition to the lower costs associated with walk-ups [lofts], they are appealing for their historic character. This uniqueness can sometimes translate into a premium over similar apartments in full-service buildings nearby.

One can make the same points about a niche-market preference for lofts with character, including, for example, writing a blog post on (say) September 16, 2006, loft owners open their own doors, about a loft market preference for no-doorman at a price point at which nearly every uptown “apartment” would be in a doorman building.

No need to change anything here to make the same point:

Because the building offers few amenities, requiring no salary for a doorman or upkeep for an elevator, [the developer] is able to keep the monthly common charges low.

***

“We looked at old photos, researched what the building looked like. You want to capture the charm and preserve the historic character while having people know that they are walking into a renovated building.”

***

“you hear renters say that they are looking for something with character — that character is an amenity. The staircase is a great place to find that, because it is the place where interactions with neighbors happen.”

***

“I much prefer old buildings,” said Mr. Kuszynski, 31. “I really don’t like sterile high-rises.”

***

“It is nice to have the same quality apartment as a doorman building, but not have to feel like someone is keeping tabs on you.”

***

“I keep hearing, ‘I want a boutique building, I want to see listings that don’t have a doorman,’ ” [a salesman] said. “There are a lot of beautiful properties that offer a level of privacy and intimacy you just don’t get in a big building.”

why do they do that?

Reporter Julie Satow wrote a harmless article, not full of demonstrably false stuff but oh-so-full of happy talk from real estate sales agents and developers. But seriously: does anyone think that if two 4th floor apartments were identical in every respect except that one had an elevator (and [slightly] higher expenses, that The Market would prefer the one without the elevator? Uh … no. And there is not likely to be any factual basis for asserting that.

There is a market truism that anything that reduces the size of the buyer pool for an asset type can reduce the market value of that asset type. In this case, I believe the Conventional Wisdom to be true. This applies to optimizing a huge loft as a One Bed Wonder, or any expensive but highly individualized renovation, or a loft with no light … or a walk-up. There is a market for each of these types, just not as deep a pool of buyers as for a 2,500 sq ft loft with 3 bedrooms, or a lovely but conventional build-out, or a loft with light but no view, or … a loft with elevator access. Someone will buy them, and some two may fight over them; but The Market wants what The Market wants. And the higher you go up the stairs, the fewer potential buyers are willing to make the trek. At all. This should not be controversial, which is why the premium-for-walk-up catches your eye.

Satow has three gross data points and two more specific points. Pardon me, but they don’t add up to the thesis of the article.

over the past year, the average monthly rent for luxury walk-up one-bedrooms (those priced in the top 10 percent), rose 5.7 percent, while that for one-bedrooms in full-service elevator buildings increased just 0.5 percent, according to data from Citi Habitats.

That’s a stat that establishes (if it is valid at all) that the rate of increase was higher for Top Of Market 1-bedroom rentals without elevators than for Top Of Market 1-bedroom rentals with elevators, not that walk-ups are more pricey than elevator units.

And the number of walk-ups sold over the past year has jumped nearly 64 percent, whereas the increase was 22 percent for units in full-service buildings, according to the appraisal firm Miller Samuel. Over the past year, Miller Samuel also found that the price of walk-ups has surged nearly 22 percent, versus less than 2 percent for units in full-service buildings.

Same point about the second sentence, as above. As to the first, that says something about the distribution of sales in the market, not the relative value of one kind of property over another. (Putting aside the definitional problem of whether for this purpose “full service” means any building with an elevator; it shouldn’t, but that’s a funny set of extremes to compare.) This 64% v. 22% might mean something if you could show that the walk-ups were selling and the “full service” units were not. But you’re not going to show that (and Satow didn’t try) because inventory of all sorts, if priced right, is selling.

Plus, I will bet you a quarter that the walk-up market is a relatively small part of the overall sales market, so is naturally more volatile in participation rates.

you know this: comping is hard

I can’t comment on directly on the specific comparisons Satow draws, since I don’t know the details from which to compare sales values at 650 Bergen Street and 618 Washington Avenue in Prospect Heights, or the rental values at 95 Horatio Street and 48 Bedford Street. But in the case of the rentals, even the developer make the case for a premium for ‘character’, not for stairs per se. And Satow hints that she might be cherry-picking data about the Prospect Heights sales: she uses an average of $872/ft for 2-bedrooms in one case, compared to “luxury” units in the other building “priced at the upper end of the market, some for more than $1,000 a square foot” (emphasis added) without comparing whether the first building has “luxury” finishes, without going apples-to-apples with an average price per foot in the walk-up building, without telling you that StreetEasy shows that three 2-bedroom units on the first floor at 650 Bergen Street (no need to walk-up, though there is no elevator) are in contract off of asking prices of $765/ft, $723/ft, and $709/ft, before adjusting for outdoor space.

Yes, those duplex units have some below grade space, making comping more difficult, but that only strengthens the point that the comps are not so simple, and the building Satow chose has an average 2-bedroom value of $732/ft, well below 618 Washington Avenue’s 2-bedroom average of $872/ft (before adjusting for outdoor space there, either). A cynic might look at just those data points and argue that even the ground floor units in walk-ups are penalized by The Market. That would be wrong, but how does that make you feel about Satow’s selection of data?

Here is one other way to support the Conventional Wisdom, and oppose The Satow Theory of Stair Premium: many, many (many!) small Manhattan loft buildings were converted to residential use from prior industrial or commercial use and added elevators to buildings that did not formerly have them. (I hit one in my September 13, 77 White Street loft lacks “bedrooms” because elevator is in the wrong place, in which I told you how to recognize such a building.) Elevators are a common amenity, as in perceived-by-The-Market-as-a-benefit. D’oh. That’s why some buildings that don’t have them put them in; that’s why developers of Manhattan lofts pretty much always put them in if feasible; that’s why — all other things being equal — The Market will pay a premium for an elevator over a walk-up.

The burden on someone arguing to the contrary should be on Satow them. Developers may like stairs, especially in 3 story buildings with their own very specific financial advantages that have nothing to do with elevators, but they don’t have to live there.

To recap: character can be a premium item; stairs … meh.

And: the Real Estate Section of even the Old Grey Lady is not a place in which journalism is often committed. The Real Estate Industrial Complex, Manhattan Media Division is usually just part of the Complex.

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