500 Greenwich Street loft sale mocks ‘market efficiency’

by Sandy MattinglyPosted on Posted in loft neighborhoods soho — No Comments ↓
unique buyers make deals with unique sellers, market trends be damned

You can tell pretty easily that the recent sellers of the “3,963 sq ft” Manhattan loft #402 at 500 Greenwich Street were rather disappointed to have sold their oh-so-classic loft for $4.95mm on June 14: the darn thing was brought to market way back in June 2015 … for $6.75mm. Before we look at the full (painful!) listing history, there is one additional data point that even more starkly proves that these sellers were very disappointed: the slightly larger (“4,300  sq ft”) but very similar loft #201 downstairs sold for $5.325mm … nearly four years ago.

At this scale, I’m not sure price per foot is a more useful metric than absolute dollar price, but the loft #201 sale at $1,238/ft in November 2012 would imply a present value for loft #402 currently of about $1,604/ft (the StreetEasy Manhattan Price Index is up 29% in that time, from $762,070 to $987,271 in May 2016), instead of the $1,249/ft that the cold cruel market just provided. (If you ignored the small-at-this-scale size difference between the two lofts, that 29% calendar-based market gain ‘should’ have yielded more than $6.8mm [keep that number in mind …] instead of the $4.95mm actual result.)

Here’s the full (painful!) listing history of loft #402:

June 2, 2015   new to market $6.75mm*
Sept 8 $6.25mm
Nov 11 $5.95mm
Jan 28, 2016 $5.25mm
April 21** contract
June 14 sold $4.95mm

* remember “more than $6.8mm??

** contract date from the inter-firm database

As wild as that stand-alone history is, the real pain is due to the failure of the 2012 loft #201 sale to set the 2016 market value for loft #402. Let’s look at the charms of loft #402 before trying to deal with that madness.

a brick lover’s paradise, in massive scale

No matter how laid out, a “3,963 sq ft” loft with only two exposures presents challenges. In this case, the loft is nearly square, with windows east and west:

extravagance is secondary BRs of 16×19 ft (all images from DougE, clearly)

You really need to love brick to spend time in this space:

looks like all the exterior walls are brick, deep red brick

in case you can’t get enough brick, there’s a thick course of it represented by that thick line on the floor plan

These two photos amply show the classic loft elements, beyond brick: the beams and columns, the exposed pipes and sprinklers, and that sliding door cover (they call it a “barn door”, which is a funny way to describe a Manhattan loft feature; I’m guessing it is an original fire door). A loft snob might quibble about that (slightly) dropped ceiling (moi??), as that expanse of flat white surface feels oppressive to me, and is especially jarring at the tops of the windows. Your mileage may vary, and if you own it you can do what you want, snobs be damned.

While I’m in a quibbling mood, with all that space, even a 17x13ft kitchen can feel cramped:

yes, I am really quibbling

Looking at the floor plan, it is possible that the kitchen has to be fitted between that arched opening in the photo and a structural wall (with risers?) behind the frig. I’m not suggesting that this kitchen alignment is a market deficit, but the footprint of loft #201 appears to permit a more impressive kitchen set-up:

everyone drops their ceilings here, alas

loft #201’s floor plan suggests more kitchen and bath flexibility in that line

was this loft the canary in the luxury market coal mine?

I would go so far as to say that the prices for loft #201 in 2012 and #402 in 2016 are irrational, in the most basic sense of defying sense. I am certain the listing agents had many (painful) conversations with the sellers, trying to understand why loft #402 didn’t sell more quickly, and didn’t sell closer to any of the first three asking prices. Those of us in the market-data world would certainly have been surprised, even (for someone who did not have money in the game) frustrated. To have been party to the deal … unimaginable for me.

Maybe buyers for this much space with this much money really did have more choices in 2016 than in 2012, leading to a competitive deficit for 500 Greenwich Street lofts. (Emphasis on maybe.) Maybe this loft’s experience in 2015 was the beginning of market-softening at the $4 million-plus market, as so many commentators have been commenting on recently. If you saw my February 26, more on the $5 million Manhattan loft market, a year over year look, you saw me struggle with exactly that issue, using the thin data about loft sales at the top of my dollar level of interest, year over year.

One weakness in doing year over year analysis based on what sells is that the mix of what has just sold, compared to what sold 12 months before, presents a host of variable comp factors. And there are not enough data points to inspire much confidence in the conclusions one can (should) draw, especially in a niche market such as Manhattan lofts, or in niche-ier submarkets such as Soho lofts, let alone such niche-ier submarkets sliced thinner by price.

The same-building paired loft sales of #201 in 2012 at $5.325mm and #402 last month at $4.95mm eliminate many of the variable comp factors that complicate a Manhattan loft year-over-year analysis: there is no need to adjustments based on location (unless one feels that this frontier corner of Soho has become marginally more marketable in the last four years), the character of the two lofts is very similar (similarly, the level of finishes), view and light seem not to make material differences here. In other words, #201 is a very good comp for #402, mainly requiring adjustment for time and market conditions, then to now.

I’ve already tipped my hand about that: the StreetEasy Manhattan Price Index is up 29% in that period. By any rational analysis, loft #402 should have sold in 2016 at a more or less proportionately higher value than loft #201 in 2012.

That. Did. Not. Happen.

One can’t (shouldn’t) argue with market facts. (The Market emphatically stated that loft #402 was not worth around $6.25mm last Fall, was not worth around $5.95mm at year-end, was not even worth $5.25mm at the beginning of the year; instead, The Market proved that this loft was worth exactly $4.95mm when it went to contract in February.)

The Market does not care that these market facts are irreconcilable with the market facts involved in the sale of loft #201 four years earlier. Damn The Market!

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2,000 sq ft head to head, Soho loft on Wooster crushes Tribeca loft on Warren

by Sandy MattinglyPosted on Posted in loft neighborhoods soho — No Comments ↓
comping is (still) hard in the Manhattan loft niche

You can’t have a much more stark comparison between two lofts in the prime Manhattan loft neighborhoods than two approximately 2,000 sq ft lofts that sold on the same day, both with high ceilings, both with a mix of classic features dressed up with things like chef’s kitchens, both built as two bedroom + two bath units, both condos. The “1,948 sq ft” Soho entry, loft #3E at 43 Wooster Street, sold on June 24 just above ask at $3.975mm after taking six weeks to get into contract, while the “2,010 sq ft” Tribeca stepchild comp that also sold on June 24, loft #4E at 8 Warren Street, took (just) ten weeks to get into contract for $3.28mm. In absolute dollar terms, that’s a spread of $695,000, or a 21% premium for the Soho loft; on a per-square foot basis, that’s $2,041/ft vs. $1,632/ft, or a a 25% premium for the Wooster Street loft over its poor relation in Tribeca.

That’s shocking, isn’t it?

interiors more similar than different

I’ll get to the differences between the lofts below, but the similarities are many. In condition, the lofts sound and look very similar (from broker babble and listing photos; I’ve not seen either one in real life); one bit of babble is restrained, the other, voluble:

Very Cool … Loft with large windows and High Ceilings 10Ft 10″ and WB Fire Place. The master bedroom has an en suite white marble bathroom with steam room and the second bedroom has a bathroom just across the hall. There is also a home office and the chefs kitchen has a Viking oven, Sub Zero fridge & wine cooler. … Speakers for Home Theatre are installed.

(That’s pretty restrained.)

the ideal combination of classic loft with stylish modern touches. … voluminous ceilings, large 6 foot windows, hand-pointed exposed brick walls and truly stunning re-milled antique wide-plank pine floors. …

The elegant chef’s kitchen, designed by Mobili de Angelis, is fitted with a Viking range with vented hood, Sub Zero refrigerator, a wine cooler, garbage disposal, trash compactor and customized cabinetry.

… master suite … outfitted with custom closets and an en-suite bath with heated flooring …. a large custom work space and cabinetry in the gallery.

… abundant closet and storage space, as well as a utility room with a separate boiler, hot water heater and vented washer/dryer.

(That’s pretty … wordy [“voluminous” ceilings??], and my ellipses saved you a lot of time.)

Kitchens weren’t pictured the same way, but …

some people prefer redheads

 

some prefer blondes

Baths feature stone, and more stone, with only a slight difference in utility:

that’s a shower stall on the left, but just one sink

for the couple on the same tooth-brushing schedule

“Classic” loft features are few, but evident, including different wood-framed windows:

what a column! makes me want to see the beam exposed, alas

 

bricks! we got bricks!!

In each of these pairs, the Soho loft leads, the Tribeca loft is second. (Thanks, DougE for all photos, obvs.)

floor plans and locations begin to break to Soho

The Soho footprint permits a more efficient use of space:

nearly square, so very little “hall”

In Tribeca, the classic long-and-narrow presents classic utility and challenges:

how to use that “gallery”? here, add custom work space + cabinetry (look to the left in top photo, above)

We are deep into matters of personal preference here (as opposed to market impacts), as some Manhattan loft lovers love the separation between public and private space in a long-and-narrow loft, while others with equal ardor prefer the efficiency of the near-square. One consequence of the difference in the two footprints is evident in the southwest corner in Tribeca: it is very easy to add a third (legal) bedroom to a long-and-narrow loft that is “23 ft” wide; that is a slightly harder thing to pull off in the near-square of Soho (more easily do-able by shrinking the existing bedrooms, if you can split the window wall; otherwise eat into the great room).

But the cost of adding that third bedroom is a greatly reduced sense of volume in the long-and-narrow format. See the last photo above, and note (from the floor plan) how closely cropped that photo is, with the wall between living room and third bedroom running just out of frame, left. You’re left with two windows in the public area in Tribeca’s long-and-narrow loft, compared to three and two windows in Soho’s corner living room:

math wins! “40 x 24” dwarfs “14’6″ x 30’6″”

Soho closed the utility gap

If you counted windows in Soho, you might be puzzled about the fifth photo above, which appears to show four windows on the long public wall, while the floor plan only has three. Turns out that if you were willing to put children to sleep and let them wake up in the dark, you can duplicate the sleeping utility of the Tribeca long-and-narrow loft. The 8th listing photo with bunkbeds and a floor to ceiling curtain is actually the “home office” on the floor plan, rather than Bedroom 2, which clearly (compare listing photos 3 and 5) is used as the work space with sliding door. They cheated, to get more utility and even more volume in Soho, which you can sometimes do in a nearly square loft (and with mushroom children).

edge of nabe, or just off-center?

I suspect that the biggest reason for such a gap between largely similar Soho and Tribeca lofts is location. (Or, as the Media Division of the Manhattan Real Estate Industrial Complex might put it, location, location, location.) We are again into matters of taste, but 8 Warren Street is hardly prime Tribeca. The plusses are proximity to City Hall Park and … (there must be another one ;-). Downsides to this location compared to other, more typically valued Tribeca lofts, include the very commercial feel of this block (and surrounding blocks) and the distance to the restaurants and shops that people who love Tribeca restaurants and shops think of as “Tribeca”.

43 Wooster Street, in contrast, is outside prime Soho, but not by very much. Of course, Soho is a more compact neighborhood than Tribeca (especially if you tend to ignore the “new Soho” blocks west of Sixth Avenue, as I do), so it is easier for any Soho address to be close to ‘prime’ than it is for far-flung Tribeca addresses to approach the prime micro-nabe.

the dollar difference is even bigger than you think

The absolute dollar value between the observed market value of these lofts (to review: $3.975mm vs. $3.28mm) grows if you take into account monthly expenses. 43 Wooster Street is a 10-unit condo that was converted in 2002, offering a weekday-shift doorman amenity lacking at the 14-unit Trinity Stewart Condominium that was converted (lower five floors) and built (upper five floors) by 2008. The two units we’ve looked at are taxed similarly, with the older (and slightly smaller) #3E at 43 Wooster Street carrying $1,241/mo in real estate taxes, while #4E at 8 Warren Street is at $1,525/mo; but note the difference in condominium common charges to support that 40-hour-per-week doorman: $1,477/mo in Soho compared to only $404/mo in Tribeca.

The net per month ($789/mo) is a non-trivial factor. The best-qualified borrowers were quoted 3.375% for a 30-year-jumbo loan last week by one of the big lenders who fills my in-box; at that rate, $789/mo would support about an additional $175,000 in mortgage. For people who think this way, the absolute dollar premium between our mixed pair of the Soho loft and the Tribeca loft grows to about 26% (from 21%) and the per-foot premium grows to 30% (from 25%).

Day-um.

These two very similar lofts are only about seven-tenths of a mile from each other. I wonder if an out-of-town appraiser might be tempted to consider them as comps for each other. If so, they will stumble over the (straight up, per foot) 25% premium for 43 Wooster Street over 8 Warren Street.

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how can a full price deal disappoint? when the Chelsea loft sells off nearly $2M from start

by Sandy MattinglyPosted on Posted in loft neighborhoods chelsea — No Comments ↓
Manhattan loft price discovery can be slow & painful

The folks who sold the “3,300 sq ft” Manhattan loft #6F at 205 West 19 Street in prime Chelsea last month evidently hit their limit when they dropped their ask to an even $5 million back in October; not only did they hold there for the nearly six months it took to get to contract, but they refused to accept even a dollar off. That resolve was painfully bought, as the extended 17 month listing history illustrates:

Jan 26, 2015 new to market $6.95mm
Feb 25 $6mm
April 9 $5.955mm
July 31 hiatus
Sept 4 change firms $5.5mm
Oct 12 $5mm
Mar 28, 2016 contract
June 9 sold $5mm

That’s nearly a year and a half to sell, and hard selling nearly every month. Apart from the cosmetic price drop in April 2015, there were only three price changes and each one was serious: nearly a million, a half million, and then another half million. Nearly two million in total drops, achieved in just a hop, skip and a jump. The caption on this listing might be “price discovery is hard”.

While dropping the asking price by two million is clear evidence of pain (not to mention, 28%), I’ve omitted one detail from the original StreetEasy listing history: the loft was in contract off that $5.595mm asking price (the cosmetic change worked??) as of May 11, 2015. Sometimes StreetEasy gets intermediate details like that wrong, but in this case that datum is confirmed in the inter-firm database: the loft was “in contract” from May 11 until June 8, 2015 and then de-listed for two days before being brought back through July 2015. There’s no way for an outsider to the deal to know what happened, but the contract failed so (relatively) quickly to suggest this was not a coop board turndown, but some fundamental problem with the putative purchasers.

Chances are pretty good that that contract was at a higher price than the eventual deal at an even $5 million, which is another reason to suggest that the sellers were pretty firm when changing firms (with that price drop to $5.5mm) that their last price drop to $5 million would be their last. And so it was. Eventually.

trying for a home run but hitting a … double??

There’s no indication that the June 2016 sellers at $5 million significantly improved the loft after they bought it nearly four years earlier for $3.65mm. The loft then was described more for its bones than its interior finishes:

Dramatic and expansive loft with open city views in a prime Chelsea location. The open and airy Great Room has soaring 11.5′ beamed ceilings and leads to a grand, loft-style library with two walls of oversized windows that allow for brilliant southern and eastern sunlight to spill in throughout the day. The open, updated kitchen overlooks the formal dining area and living room, but also has its own large alcove for casual dining. Currently configured with 3 bedrooms plus a home office and 3 full bathrooms, the spacious Master Suite boasts an en suite master bath, a walk-in closet with custom built-ins, and 3 large windows with open views facing north. Other special features include large utility room with full-size washer/dryer, water filtration system, sound-system wiring and speakers throughout, and key-lock elevator to foyer plus separate freight elevator with direct access into loft.

The “updated” kitchen, the “custom” closet built-ins, and the water and sound systems were the only interior elements deemed worth mentioning then, and no details were added for the 2015-16 marketing campaign:

Enormous south-facing Chelsea loft in excellent condition, with open views, has three bedrooms, home office, three full bathrooms and incredibly high ceilings. Enter from your semiprivate landing into the graceful entry gallery and take in the spectacular scale of this grand space. The generous dining area leads to a large open living space with huge windows and magnificent light. Adjacent to the primary living area is a large separate media room with southeast exposure and open views. Overlooking the large living area, a generous eat-in kitchen, is perfect for those who like to entertain, featuring stainless steel appliances, two dishwashers, farmhouse sink, custom cabinets and externally vented exhaust over your eight burner range. Off the gallery leading to the master suite is a large home office, perfect for a guest room, nursery or those who need a work space. The master bedroom is truly fit for a King! With large windows and an open view to the north, there’s excellent light. A large walk-in closet will make you feel like you’re in storage heaven. Your ensuite bath has side by side sinks, separate soaking tub, shower and water closet. Secondary bedrooms are located on the opposite side of the space ensuring maximum privacy. Your private laundry room with full-size side-by-side washer and dryer

I can’t find anything different in the floor plans; here’s the current one:

still, lots of rooms, lots of doors, and that back hallway for the other bedrooms, laundry and bath

Nor do I see a difference in the listing photos, other than the filter that (probably) makes the kitchen cabinets darker in the more recent photos. (Certainly, they are the same cabinets.)

Nothing wrong with trying, but the 2012-buyers-turned-2016-sellers started out asking nearly twice what they’d paid. According to StreetEasy’s price index, the overall Manhattan residential resale market was up 29% over the nearly four years that the #6F sellers owned the loft (the damn thing is still ridiculously hard to find, and you have to hover to get the readings; I hovered for you to find August 2012 at $754,293 on the original Index, and to find April 2016 at $975,017 here; the May 2016 StreetEasy market report refers to the Index but actually cites only the Manhattan median sale price rather than the Index value … arghhh).

If you are quicker at math than I am, you’ve already figured out that the 2012-buyers-turned-2016-sellers out-performed the overall Manhattan market, as measured by the StreetEasy Price Index. You’ve at least eye-balled the result for loft #6F at more than a one-third gain (from $3.65mm in August 2012 to $5mm in June 2016), if not used the calculator to get 37%. As you know from my StreetEasy rant above, the StreetEasy Price Index was up (only!) 29% from August 2012 to April 2016.

The 17 month history and the original ask aside, out-performing The Market by that margin should have been a cause for rejoicing. But I doubt the 2012-buyers-turned-2016-sellers could turn aside so easily from the January 2015 start at $6.95mm. That’s for smart-alecky second guessers like Manhattan Loft Guy. (One of the neighbors might share a bit of their disappointment, just how much remains to be seen.)

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TEN YEARS is a really long time on the internet (Manhattan Loft Guy anniversary!)

by Sandy MattinglyPosted on Posted in internet and blogosphere — 2 Comments ↓
in the particular madness of this March, into the Wayback Machine…

This anniversary sneaks up on me some years (indeed, I’ve missed it at least once). My first post as the (self-proclaimed, fake-it-til-you-make-it) Manhattan Loft Guy was on March 19, 2006. Look away while I awkwardly pat myself on the back for sticking to this, however intermittently.

(pause)

Now that we’re back, and if your memory lane is not too crowded, click on my Archives from that first month, March 2006. You’ll find ten posts in a short month, and topics from Zillow to lofts-as-fashion, to what Soho smelled like back in the day (hint: think Havana), to public schools in Tribeca.

Let’s keep doing this, ok??

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Chelsea penthouse loft at 240 West 23 Street takes million dollar hit (or, was it a 44% hit?)

by Sandy MattinglyPosted on Posted in loft neighborhoods chelsea — No Comments ↓
is this loft trolling Manhattan Loft Guy??

The recent sale of the “1,800 sq ft” Manhattan loft #7D at 240 West 23 Street (aka “Penthouse 7D”) for $2.2mm pushes a lot of Manhattan Loft Guy buttons. Most prominently and recently, it took nine calendar months and a very large discount to clear The Market. Then, there’s the is this low-ceilinged space really a loft?? angle. Finally (perhaps!), there’s the angle that the seller turned out to be secretly negotiable, a phrase I must have used more recently than 2011,  though I did not quickly find evidence of that. That is a lot to unpack ….

This listing history is painful:

Nov 12, 2014 new to market $3.9mm
Dec 17 hiatus
Mar 4, 2015 back on market $3.795mm
April 28 $3.648mm
May 20 hiatus
June 15 change firms $3.349mm
July 6 $3.199mm
Aug 3 contract
Jan 29, 2016 sold $2.2mm

(As people familiar with my Master List of downtown Manhattan loft sales know, I consider periods less than 90 days ‘off the market’ as part of the same marketing effort; hence my November 2014 start date, above.)

I hit the themes of long marketing and big discounts (though at a higher price point) in my recent matched set of posts, February 23 ($5 million data points: unrealistic Manhattan loft sellers or market softening?) and February 26 (more on the $5 million Manhattan loft market, a year over year look).  Loft #7D doesn’t match those examples in the length of the marketing effort, but the clearing price fro this penthouse loft was nowhere near the asking prices.

if they aimed for the top, they found the bottom of The Market

In fact, that’s only five months of active marketing to get to contract, but look at those asking prices …. This seller was rather responsive to the lack of response from The Market, with four price drops and no two prices separated by more than seven weeks. Problem was, none of these prices were anywhere near The Market.

Only the seller and her marketing teams know whether they were intentionally fishing for a well-heeled buyer who just had to have outdoor space in central Chelsea, whether they simply had no idea what this penthouse was worth, or whether there is some other real-time explanation for this history. All an informed outsider can infer is that they were extraordinarily wrong about The Market. The last asking price was 25% off the first. The deal was cut $1.7mm off the original asking price and $999,000 off the last one, discounts of 44% and 31%, respectively.

The informed outsider can also infer that something probably happened last Summer to change the seller’s approach. The sequence of asking price changes under $300,000 stopped in July. She suddenly became much more motivated to find where The Market was, without waiting to see whether another $300,000 drop (or two, or three such drops) would work; after all, the last ask of $3.199mm was only on public offer for four weeks before the final deal was struck.

the problem for a secretly negotiable seller

This sequence shows that that the seller was, in fact, much more (and secretly) negotiable than all but bottom fishers would have reasonably thought. (“Secretly negotiable” is a phrase I must have used more recently than in my November 29, 2011, secretly very negotiable penthouse loft seller at 129 West 20 Street secretly negotiates a 28% discount, but if so, I can’t find such usage.)

A seller takes some obvious risks in setting a too-high price. Why would a buyer with a budget in the mid-to-low 2s look at lofts asking more than $3 million? (I often counsel buyers not to even open web listings out of their price range for fear that their preferences will become skewed by conditions, finishes, size or other factors that they cannot afford.) Many buyers will want to know how long a listing has been available, and then think that it is ‘stale’, or be predisposed to look for things ‘wrong’ if they do go see it. And most buyers will simply not bid on listings well beyond their budget, preferring to focus on listings that are visibly in their range (a reasonable, don’t waste my time approach). But sellers say things to themselves like it only takes one, right?

Sellers are better off if there are two. And trying to attract two low-ball bidders at the same time is not quite as difficult as drawing to an inside straight, but it is … challenging.

market metaphysics in the Manhattan loft market are not different from the overall market

The hard cold market fact is that this penthouse was worth exactly $2.2mm last August … can’t argue with that. But one can wonder …. Forgive me if this seems too much like Real Estate 101, but here’s how it works.

The purpose of an asking price is to attract the highest offer from a qualified buyer. In that (strict) sense, asking $3.199mm ‘worked’. (She was in contract in four more weeks.) But I would argue that the $999,000 gap between last ask and contract price leaves open the possibility that The Market would have produced a qualified buyer at a higher price, if only that qualified buyer understood how negotiable the seller actually was. (My aggressive sellers hear from me “The Market is much better at correcting a too-low price than it is a too-high price“, as often as necessary.)

I’d bet a quarter (that’s $0.25) that a buyer could have been found above $2.2mm off an asking price of $2.75mm, but I can neither collect that bet nor be forced to pay out. Indeed, I’d double that bet that a buyer could have been found above $2.2mm if the asking price had been dropped to $2.2mm. (In other words, that there would have been a bidding war, even after all those price drops.) You can find examples of this dynamic in the downtown Manhattan loft market by looking for loft sales on my Master List of downtown Manhattan loft sales that have a green selling price (green for above ask) without having a blue first asking price (blue for no change in price); some of these are dramatic.

I hit a few of these from time to time, when The Market is right and when I have a particular jones for this phenomenon. Once I started looking for ‘a few’ examples it was difficult to stop.

See, for example,

Surely you get the point … I must stop ….

can you have a not-loft in a loft building?

Finally (!), there’s the is this low-ceilinged space really a loft?? angle to poke Manhattan Loft Guy in the eye. This (originally) 18-unit building tends to have small units, as do many residential loft buildings converted to coop in the early 1980s. We’ve been at this post for along time by now, so let’s make this quick….

The building is clearly a loft building, one with a prior life as a manufacturing facility, or with some other commercial usage.

nope: not built abut 100 years ago as a residence

Penthouse #7D is on the top floor, and above, in rooftop space not visible from the street. That sort of structure leads to not very loft-y rooms like this bedroom:

A small loft on the third floor looks very loft-y:

#3A is only “1,170 sq ft”, but recognizably a loft

A true penthouse (to purists snobs like me) contains space built on the roof, with a different feel from the ‘proper’ floors of the building. That sense of difference between the penthouse units and units on other floors is enhanced in a building like 240 West 23 Street, in which ceiling height is lower at the top of the building than on the lower floors. (See the building pic above, again.)

This can lead to metaphysical questions such as can you have a non-loft in a loft building?, and other distracting taxonomy questions. The only response that can keep me sane is to treat all units in a loft building as lofts, regardless of how different they may be compared to their ‘proper’ neighbors. If you are intrigued by metaphysics or taxonomy, consider these Manhattan Loft Guy blasts from the past:

With that, back to March Madness ….

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more on the $5 million Manhattan loft market, a year over year look

by Sandy MattinglyPosted on Posted in market trends — No Comments ↓
difficulty at the $5 million level is not a new phenomenon for Manhattan lofts

My post on Tuesday considered whether the December string of downtown Manhattan lofts that took a long time to sell around $5 million that I noticed on my Master List of Manhattan Loft Sales suggest3ed that there was some softening in that market segment, or merely reflected a particular bunch of unrealistic sellers. That February 23 post, $5 million data points: unrealistic Manhattan loft sellers or market softening?, offered 18 data points, lofts that sold between October 1, 2015 and January 31, 2016 that had been offered originally at $4.5mm or more, eight of which sold for at least a 10% discount to the original asking price. See that post for the details, and my musings about What It Means (or, whether it means anything).

When dealing with a niche market (downtown lofts), then further slicing to a narrow price range (starting at / above $4.5mm, selling at / below $6mm), the data get … thin. Which is one reason blogging in real time is a fraught enterprise. Even within a niche of the Manhattan residential real estate market, having only some data always leads to other questions, or begs for a broader context. I used The Miller’s quarterly report for the overall Manhattan market for some context, but that yielded few direct correlations. Another way to broaden the context would be to see how the Tuesday data set of 18 loft sales compares to other time periods.

The two tables below match the tables from Tuesday’s post, this time with 24 data points that provide a year-over-year context, ten in the table of lofts that sold at least 10% below their first ask and 14 that didn’t need such a haircut. (Compared to eight and ten on Tuesday.) These 24 lofts sold between October 1, 2014 and January 31, 2015 and all but one started asking $4.5mm or more (like my Tuesday set); the one exception started lower but sold just above $4.5mm so is fair to consider when looking at the market “around $5 million”.

First the tables, then the talk. (As on Tuesday, “[r]epeat after me: anecdota are not data. But a series of anecdotes are data points.”) The unhappier set of ten:

sold on price DoM 1st ask discount
144 West 18 St #6E  Jan 29, 2015 $4.45mm   97 $4.95mm 10.1%
474 Greenwich St #4S   Jan 23 $2.95mm 429 $4.75mm 37.9%
105 East 16 St #5 Jan 22 $5.125mm 164 $5.95mm 13.9%
62 Cooper Square #4A  Dec 23, 2014 $4.6mm 298 $6mm 23.3%
738 Broadway #2 Dec 23 $3.85mm 295 $6mm 35.8%
17 East 16 St #6 Dec 19 $4.35mm 51 $5mm 13%
117 East 24 St #8 Nov 20 $5.6mm 588 $6.5mm 13.8%
195 Hudson St #2C Oct 20 $4.08mm 94 $4.995mm 18.3%
481 Greenwich St #5B Oct 6  $3.95mm  ??  $5.15mm 23.3%
35 West 23 St #3 Oct 1  $3.75mm 367  $4.925mm 23.9%

The happier set of 14:

sold on price DoM 1st ask
155 Franklin St #3N Jan 30, 2015 $5.52mm   137 $6mm
225 Fifth Av #6K Jan 29 $4.6mm 37 $4.5mm
73 Worth St #2B Jan 29 $4.6mm 49 $4.995mm
144 West 18 St #2W Jan 28 $5.6mm 8 $5.5mm
15 West 24 St #6 Jan 23 $5.5mm   91 $6mm
28 Laight St #3E   Jan 12 $5.35mm 213 $5.75mm
144 Franklin St #3 Dec 23, 2014 $5.425mm 26 $4.75mm
429 Greenwich St #2C Dec 19 $4.895mm 85 $4.895mm
62 Cooper Square #2T Dec 3 $4.78mm 19 $4.995mm
30 Bond St #PH Nov 19 $5.35mm 86 $5.5mm
53 Greene St #3  Nov 4  $6mm 172  $6.34mm
345 West 14 St #4F  Oct 20  $5.5mm 41 $5.5mm
15 West 24 St #11  Oct 16  $5.45mm  142  $6mm
140 Sullivan St #5  Oct 14 $4.506mm  50  $3.9mm

Again, a couple of notes, always remembering that these two sets and Tuesday’s more current pair may simply be too small for firm conclusions:

(a) It can (still! always!!) take a long time to sell Manhattan lofts that are over-priced.

(b) While the current set of happier sales (from the seller perspective) included several that took a long time to sell, even though being priced reasonably close to their clearing price (Days on Market in that set of ten of two included 477 days, 363 days, 223 days, and 171 days), a year earlier the happier set of 14 included ten that took three months or less to find a contract, while none of the other four took as long to contract a year ago as the three longest of the current set.

(c) While ten of the 18 current set took at least a half year to contract, only six of the Unhappy Set and one of the Happy Set a year ago took at least that long, or seven of 24 in total (while I don’t know exactly when 481 Greenwich St #5B went into contract, it is clear from our data-base that it had to be at least that long). Whether the difference between 10/18 and 7/24 is meaningful to you may be a matter of taste, or of statistical relevance above my pay grade.

In Tuesday’s post I looked for context to The Miller and his Days on Market comparisons from his Manhattan Market Report for the last quarter of 2015. He found (using a different way to measure Days on Market) that the overall Manhattan residential market was quicker in the Fourth Quarter of 2015 than the same quarter in 2014 (82 days v. 105 days), while his “luxury” niche (the upper 10% of sale prices) was also quicker recently (150 days v. 160 days). Whether  statistically significant or not, I find the downtown Manhattan loft niche around $5 million to present the opposite trend, largely driven by the relatively quick success of the low-or-no-discount lofts from October 2014 through January 2015.

Not to go all Tolstoy on you, but last year’s data sets suggest that happy loft sales were substantially alike (nearly all were relatively quick, four sold above ask and two at ask), while unhappy loft sales (needing the big discounts) were likely unhappy in different ways. I suspect that was especially true last year, with two of the unhappy lofts needing one-third off and four more nearly a quarter off. The happy ones largely sailed through The Market.

Offered for your consideration … draw your own conclusions. And continue to watch this space ….

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Garment district loft before & after at 361 West 36 Street

by Sandy MattinglyPosted on Posted in loft neighborhoods west 30s — No Comments ↓
picturing the art more than the loft, alas

Have you taken the new Curbed out for a spin yet? The totally new look and feel (and editorial approach) were apparently driven by the need to standardize across the Vox Media universe. (Tuesday’s ‘explainer’ from the new E-in-C is here.) I am not sure how I feel about the look yet, and the focus on less aggregation and more original content is … a mixed bag, to me. But the new approach opens up the opportunity to make “House Calls” with a back story and as many as 58 photographs. (Fifty-eight photographs.)

The February 22 In a Garment District Factory Turned Loft, A Home Filled With Avant-Garde Art is one new kind of feature, at least insofar as it is supported by so many photographs (fifty-eight photographs, as you know), so that is definitely a good thing, as it is rare to get so many views of a Manhattan loft as-lived-in, as opposed to all dressed up for sale, or in an Architectural Digest-type feature, with many fewer pix. So woo-hoo! to Curbed for telling the touching story (see what I did there, Kelsey Keith?) of folks who bought a “3,000 sq ft” full floor loft way west on 36th street, in what I sometimes call Big Sky Country for the open views.

Short story: art-y American meets creative Italian while working in Florence in 1985, they move to New York to a Garment District loft (not this Garment District loft), bounce around Soho and the Financial District, have a son (now 12 years old) and move back to the Garment District to buy the loft in 2010 from the estate of party animal (circa 1970s). They make the loft their own, with “pieces of the impressive collection of avant-garde textiles, fixtures, and artworks”, and seem to live happily (ever after, let’s hope). The photos (fifty-eight photographs) offer an unusually detailed sense of their taste and art (and turntable!).

The text is a little strained (“[o]f all of Manhattan’s neighborhoods, the Garment District is one that feels less inviting to residents”; the least inviting?? sheesh), but tells their story. (Be sure to check the photo captions, as well.)

interesting what you can do to decorate a white-on-white loft

The text never says exactly how much work they did after buying in 2010, but the implication is a lot (emphasis added):

the building was converted to a co-op in the 1970s by a group of artists, some prominent, of whom a few still maintain space in the building. Alessandro and Elizabeth purchased their loft from the estate of a conservator of paper artworks who would throw wild parties in the ’60s and ’70s. When they moved in in 2010, the loft still resembled those bygone days. Gigantic mirrors covered nearly every flat surface—traces still remain throughout the apartment, notably above a toilet and bathtub—as if the loft was an architectural disco ball. Despite their taste for the interesting, most of the mirrors had to go. So too did the colorful walls and formica cladding the kitchen islands.

The couple scrubbed the color from the apartment to compliment their extensive, impressive assemblage of artworks. Each spouse has their own obsessive accumulation. …

Among the photos (how many, y’all?), you’ll see many that show open spaces in the white loft, with white walls, white flooring, white ceiling, white radiators. The color comes from their furnishings and finishes:

writing on a blank (er … white) slate (pic 1 of 58)

not quite as much color in this seating area (a beige rug??) (7 of 58)

In fact, it is not clear how much work that qualifies as ‘renovation’ they did, as opposed to redecoration.

the overall look of the loft is the same, before and after

Thanks to an enterprising Curbed commenter (from Brooklyn, evidently), I didn’t have to go to the trouble of tracing these folks to identify the loft they bought in 2010. Furniture aside, it doesn’t look very different:

white-on-white-on-white, in 2010 and before (Douglas Elliman listing photos)

white-on-white-on-white, circa 2016, with table in the same place as in right-hand 2010 pic above (seating in the distance) (25 of 58)

(As you already know if you clicked the 2010 listing link, they bought on August 26, 2010 for $2.315mm, or [only] $772/ft; their furnishings may be very expensive, but it appears as though their fix-up budget was limited.)

(31 of 58) The original caption: “The kitchen is largely the same from when they purchased the apartment, save for the copper overlay on the islands. It came to replace some formica.” (That last sentence is … awkward.)

The 2010 buyers are clearly talented scavengers, with this wall of shelving in their son’s room left over from the prior owner as only one example:

(40 of 58)

They don’t seem to have done anything to the ceiling, other than to change light fixtures and to open up the dropped ceiling in the kid room (see caption to pic 44 of 58: “[t]o give the small room a more open feeling, the couple removed the drop ceiling in this bedroom”):

(13 of 58) Original caption: “The woman who lived in the apartment before built out the beams. Some are structural, and others hide a fire sprinkler system and lighting.”

Remember this floor plan, colored by the 12 year old, and leaning in that red shelving in his room:

(43 of 58) The caption: “A floorplan of the apartment hangs out on their son’s shelf. Color accents by him.”

They definitely didn’t do much to the bathrooms:

(46 of 58) The caption: “The retro bathrooms have gone largely untouched. Elizabeth says they might be next.”

This floor plan from the 2010 listing should look familiar by now:

a kid could have some fun coloring this, I think, adding his parent’s big furniture

It is safe to say that no architect was involved in the post-2010 project that converted the loft that “still resembled those bygone days” to the colorful home pictured in 2016. What’s weird is that there is little evidence of those “bygone days” in the 2010 listing photos that were taken (d’oh) before the Florentine lovers bought the loft.

Nor can I find “Gigantic mirrors [that] covered nearly every flat surface … as if the loft was an architectural disco ball” in the 2010 listing photos (those photos don’t show every flat surface in the loft, but they show many flat surfaces, and I count only two mirrors, one each in listing photo #2 and #7). I remember disco as being a bit more vibrant, but maybe these folks (and the Curbed writer) are too young to appreciate that.

some Manhattan lofts have some quirky elements

Let’s wrap up the discussion of the interior of the loft. This is what happens when you don’t know what to do with all that space:

(30 of 58, with no caption … what could you say about this??)

The former owners had a lot more seating in this area:

look in the back left, on top of the raised platform (since whitened, along with the blue surfaces you see … the only color that needed to be ‘scrubbed’ as far as I can see)

Finally, it doesn’t appear as though they did anything to touch up this bit of authentic loft porn (said Manhattan Loft Guy, while drooling):

(55 of 58)

for all the new development in this old loft neighborhood, there’s still sky (lots!)

I haven’t mentioned (in a while) that the Curbed feature has 58 (fifty-eight!) photos, enough to include multiple exterior photos. The view in “Big Sky Country”:

(36 of 58)

Love, love, love this Big Sky view, with an iconic water tank:

(53 of 58)

Congrats to Allesandro and Elizabeth for decorating the loft (and to the boy, lucky enough to grow up here). And to Curbed for the bandwidth to include such an extravagant photo spread.

 

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$5 million data points: unrealistic Manhattan loft sellers or market softening?

by Sandy MattinglyPosted on Posted in market trends — No Comments ↓
the numbers are intriguing

One of the story lines coming out of the Manhattan Media Division of the Real Estate Industrial Complex has been about supply in the luxury market (specifically, in new developments), with the (often implicit) question about whether demand will keep up. I can’t claim a systematic review, but I have noticed a string of data points at the upper end in my Master List of Manhattan Loft Sales that is interesting enough to share. (As long-time Manhattan Loft Guy readers know, my Master List caps at sales of $6,000,000.)

The heady asking prices aside, if only one of these had caught my eye I might have done a blog post like my July 14, 2015, so many incorrect prices finally sell 73 Worth Street penthouse loft above ask, or my February 17, 2015, challenging 474 Greenwich Street loft proves a challenging sale, not quite $2 million off, or my September 2, 2014, 81 White Street loft takes a year to sell as the very not-prime Tribeca loft it is, as I am often drawn to extreme price drops and long marketing periods. In an individual post, I’d likely look at history, comps, and the specific layout or finishes of the loft to try to come up with a theory about why this loft took so long to sell, or that one needed so many price chops.

I may yet do that for some of these, but there were four in December alone, with big spreads from a big asking price, and a long time between coming to market and finding a contract. So I started counting ….

As of earlier this month, there are 18 loft transactions on the Master List that closed since October 1, 2015 that started asking $4.5mm or more. A bunch took deep discounts to eventually close (and by “a bunch”, I mean in this case eight), as we’ll see below.

Repeat after me: anecdota are not data. But a series of anecdotes are data points. Here’s some from that bunch:

sold on price DoM 1st ask discount
73 Worth St #4B Dec 29 $4,284,398   238 $5.2mm 17.6%
166 Duane St #PHA   Dec 22 $4.275mm 197 $5.25mm 18.6%
252 Seventh Av #3R  Dec 2 $3.8mm 183 $4.765mm 20.2%
195 Hudson St #1B Dec 1 $5.495mm 363 $7.45mm 26.2%
56 East 11 St #9 Nov 3 $4.25mm 444 $5mm 15%
195 Hudson St #3D Oct 23 $3.4mm 343 $4.495mm 24.4%
213 West 23 St #6S Oct 8 $4mm 293 $5.995mm 33.3%
415 Greenwich St #THC Oct 2 $5.2mm 95 $6.75mm 23%
not every expensive loft suffered this experience, of course

In the interest of completeness, here are the ten that did not fit into that bunch:

sold on price DoM 1st ask
25 N. Moore St #9B  Dec 21 $4.8mm   227 $5.295mm
22 Mercer St #2C Dec 18 $4.345mm 57 $4.5mm
60 Beach St #6D Nov 20 $5.25mm 5 $5.25mm
52 Laight St #6 Nov 19 $4.9mm 363 $4.995mm
160 Wooster St #5A Nov 12 $5,435,625   171 $5.995mm
252 Seventh Av #11-I  Nov 11 $4,607,500 112 $4.995mm
40 West 13 St #6 Nov 3 $4.8mm 50 $4.75mm
481 Washington St #3S  Oct 30 $5.5mm 477 $5.975mm
84 Mercer St #6A Oct 7 $5.8mm 62 $5.895mm
32 West 18 St #2B  Oct 2 $5.25mm 20 $5.25mm

A couple of notes: the DoM (“Days on Market”) in my Master List is measured from first offering to contract (you probably know that other people use different metrics); my cut-off for the first bunch was a sale price at least 10% lower than the first ask, though as it breaks out I could have used 15% and gotten the same split; I used $4.495mm as the low cut-off for original asking price for this exercise, as a fair rounding to $4.5mm.

Some observations:

(a) It takes a long time to sell a mis-priced Manhattan loft at these price points. All but one in the first bunch took more than six months to find a contract.

(b) It can take a long time to sell even a well-priced loft at these price points. The 52 Laight Street entry took almost a year to do a deal within 2% of the first ask; the Spice Warehouse loft at 481 Washington Street took almost 16 months to sell within 8% of the first ask.

(c) While ten of the 18 lofts on the two tables took at least 183 days to find a contract, only eight other lofts on the Master List that sold since October 1 took at least that long to sell (out of a data set of 90 other lofts).

(d) The data from my Master List are all resale units, as I keep the new development sales on a separate sheet. I don’t pay a great deal of attention to the new development portion of the market, for a variety of reasons (principally that I don’t trust the asking price and marketing dates reported, but that’s a long story), but for present purposes I will simply note that loft buyers for new developments are very different from loft buyers in (what can be termed) the current market.

a theory, not a data point, about the top of The Manhattan residential sales market

Getting away from data completely for a moment, I have heard a number of experienced and knowledgeable agents say lately that even resale buyers at this price point have been ‘spoiled’ by new developments, even if they are not interested in buying a new development property. Subject (always!) to empirical testing, that makes sense to me: people who pay close attention to the market see levels of finishes and amenities packages in new developments that few lofts in the resale market can match. (A related point: I always tell my buyer clients not to look at lofts at price points they don’t want to pay, as the collection of appealing attributes of such lofts will [almost by definition] exceed that of lofts that are truly within their reach. This is true whether the budget is one million, two million, three million, etc.)

New developments simply soak up so much media attention that they can insidiously reset norms and expectations. That’s my (working) theory, and I am sticking to it (until debunked).

are more sellers over-valuing their downtown Manhattan lofts?

This post focuses on the seller side, of course. The intriguing possibility is that these data points suggest that loft sellers at this point are more unrealistic about The Market than sellers at lower price points. All that hedging language is required for many reasons, not least that my data set has only 18 sales going back to October 1; a further caution is that The Miller did not find any great discrepancy between the market expectations of the ‘luxury’ portion of the market (he calls that the [rolling] top 10% by price) and the overall market, as measured by Listing Discount (he measures from the last listing price). See, for example, his Manhattan Market Report for the last quarter of 2015, which noted a Listing Discount of 3% for the overall market and 2.9% for the Luxury portion.

The Miller’s data for Days on Market are difficult to compare to even my limited data set, because he (again) measures from the last listing price. I understand his theory (that’s when the seller really found The Market for the property), but philosophically I prefer to count from the earliest hard date on which the seller announced an intention to sell. The Miller has to ignore agents who make small changes in listing prices. (Some Manhattan agents are notorious for doing this, apparently believing they get a fresh look each time.)

The Miller’s DoM numbers show an overall market that is much quicker measured year-over-year but a little slower measured quarter-over-quarter (82, 73, 105, for 4Q15, 3Q15, 4Q14 respectively) but a sorta opposite ‘trend’ at the Lux level, much quicker quarter-over-quarter but only a little quicker year-over-year (150, 116, 160, respectively). The upper end takes longer to sell in The Miller’s world, as in mine, but there’s not much comfort in apples to oranges.

 

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awkward kitchen fails to stop sale of MacIntyre loft at 874 Broadway in Flatiron

by Sandy MattinglyPosted on Posted in loft neighborhoods flatiron — No Comments ↓
still, $1.875mm

There are limits to what even the best architects can do. Assuming the decision about where to place (or, where to keep) the kitchen was made by the clients, you can appreciate that even an “[a]rchitect-designed loft” can end up with a kitchen as awkward as the one in the single bed and single bath Flatiron loft #605 at 874 Broadway that just sold for $1.875mm.

You would put a lot of miles on your shoes traipsing between the refrigerator and the working countertop in this kitchen:

that’s quite a ‘kitchen triangle’ (images from Sotheby’s listing, natch)

Here’s what it looks like in pictorial form:

a funky triangle, and a long way to the frig from the near counter, or to the sink to wash the lettuce

I am very curious about the experience in real life, especially if four people are sitting at that table. As used by the recent seller, there is very little transit space between the table and the shelves in front of the window, even without someone sitting on that side. (With that chair filled, there’s no transit space.) On the other side, about two feet between the (unoccupied) chair and the cabinets. A tight squeeze to pass by when that chair is occupied.

Again, there are not a lot of layout options here, but I bet this kitchen feels pretty cramped, as pictured.

what did the architect do??

I can’t find any listing description or floor plan from before the recent seller purchased (not later than May 2002, per a UCC filing in favor of the coop), so it is impossible for me to know what the loft looked like then, or what the architect did to design the space. The listing is curiously silent on details and finishes, with much more effort to describe the building and environs than the space.

Architect-designed loft in the iconic McIntyre Building, located a stone’s throw from Union Square at Broadway and 18th Street.

12-foot ceiling heights, over-sized period windows and original 19th and early 20th Century design elements will appeal to buyers seeking an authentic downtown loft. Alternatively, the unit could be updated without the need for major structural work.

(There are seven more lines of broker babble, none about the interior of this loft.)

The listing shots are as interesting for what they show as for what they don’t, especially with that exceedingly pregnant suggestion that ends my excerpt, above (“the unit could be updated without the need for major structural work”). Of ten listing photos, there are three photos of the modest living room (14’6″ x 17′), two of the kitchen, three of the south views (one that includes kitchen shelf tchotchkes), one close-up of an inset display along the window wall, and one of a work nook.

Here’s the nook:

N.B., this is not the office on the floor plan.

You see what’s not pictured? The rest of the bedroom (the bedroom closet is behind the horse drawings on the right in this nook). Or the bathroom. Or the (real) home office.

There’s always a reason that professionally marketed lofts reveal some elements without revealing others. (Remember that “the unit could be updated without the need for major structural work”.) Makes me wonder if the architect that did the design worked for the recent seller, or for the folks from whom the seller bought the loft in (or before) 2002.

You see what’s not described in the broker babble? Any of the “original 19th and early 20th Century design elements”. And any of the finishes in the kitchen. Or the bathroom (at all). Thankfully, of course, “the unit could be updated without the need for major structural work”.

Here’s one thing the architect did: kept the loft as open as possible. You can’t tell from the floor plan, but you can tell from the living room photos that the “bedroom” is not fully closed off from the rest of the loft.

that bedroom “wall” does not go anywhere near the ceiling

This is a very sensible arrangement for a single occupant or a couple (who else lives in a loft with a single bedroom, d’oh!), maximizing the light from that single south exposure, and maximizing the sense of volume as well. After all, there’s the enclosed office to not disturb a sleeping partner by keyboard clicking or media consumption.

Of course, I still wonder what (else) the architect did, but sometimes you just have to concede the unknown unknowns.

comping can be (unnecessarily) difficult (sigh)

I can’t find a direct source for the size of loft #605, which is an all too common problem with lofts in coops. (I can’t find the coop offering plan on ACRIS either.) So it is difficult to compare the $1.875mm clearing price for loft #605 to other lofts in this funky building. But let’s work with what we have and see where it goes ….

I’m guessing this loft is about 1,100 square feet. That’s based on the ‘fact’ that the “1,000 sq ft” loft #807 that sold four months ago had a maintenance bill of $2,091/mo (or, $2.09/ft for you arithmetic-challenged folks), while the maintenance for loft #605 was $2,293/mo. Yes, I know that it is really really really difficult to get anywhere near 1,100 using the interior dimensions in the floor plan for loft #605, but the principle I am using is that maintenance is a proxy for size, when comparing lofts in the same coop. And everyone knows that adding up (approximate) room dimensions is a mug’s game ;-).

Loft #807 is a fascinating comp for loft #605. That one has a much more efficient footprint than loft #605, as a straight rectangle with multiple windows on three sides. The ‘missing’ exposure for loft #807 is the preferred southern view, which is the only exposure for loft #605. A rational market should consider the trade of the view of Union Square West for the logic of the E, N, W windows around a rectangle as no worse than even, if not in favor of loft #807. Note that the #807 broker babble brags about only one interior element of that loft, the floors.

The entrance foyer has original mosaic tiled floors … twelve-foot high ceilings …. This authentic loft is beautiful in its simplicity. The original hardwood floors have 123 years of character. The windows facing east have original metal shutters on the outside that are operable. The loft features an open kitchen with stainless steel appliances, and an oversized bathroom with white marble tiles and white subway tiled walls.

Sounds like a loft in need of updating, right? If we were coy, we might say about loft #807 that it “could be updated without the need for major structural work”, depending on whether you consider creating two small bathrooms out of one large one as “major structural work”, or on whether you need two bathrooms at all. That aside, there is at least a much bragging about the #807 kitchen and bath as in the #605 babble.

Loft #807 sold for $1.705mm in October, having come to market April 23 last year at $1.75mm and finding that contract by July 6. With the ‘fact’ that #807 is “1,000 sq ft” to guide us, the math is (again) easy: $1,705/ft, exactly.

The loft #605 seller and team presumably had the advantage of that contact price when they brought #605 to market last August 20 at $2.2mm. (If not, they almost certainly knew when they dropped the price to $1.995mm on October 13; coincidentally [?] the day before loft #807 closed.) The first ask was $2,000/ft (remember: assuming #605 is “1,100 sq ft”) and the second was $1,814/ft. Both prices were higher than that at which The Market cleared loft #807, and both prices were unsuccessful, except in the sense that the second ask generated a deal.

As we know, loft #605 sold on January 20 at $1.875mm. (Pause for the clicking of calculators ….) While the rectangular and thrice exposed #807 sold for $1,705/ft in October, loft #605 cleared at … (this is too exciting!) … $1,704/ft. Ignoring the difference of 55 cents per foot, these two very similar lofts sold for the same price on a dollar-per-foot basis! Your mileage may vary, but I find this very cool. And rational.

meanwhile, back in the headline ….

If we consider the two lofts to have more or less the same utility, and to be in more or less the same condition, and for the South views to be more or less an even trade for the three other exposures, we can conclude that the awkward kitchen layout in loft #605 did not prevent the loft from selling at a reasonable market value. The back-ing and forth-ing involved with that layout notwithstanding.

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The Black Loft finally sells at 213 West 23 Street, 1/3 off

by Sandy MattinglyPosted on Posted in loft neighborhoods chelsea — No Comments ↓
Manhattan loft beauty, like many things, is in the eye of the beholder

To say that the fully renovated layout and finishes of the “3,750 sq ft” Chelsea loft #6S at 213 West 23 Street is not in everyone’s taste is a ridiculous understatement. At most, it is in the taste of few; at least, it is in the taste of one. The loft is the famous all black loft, much loved by Curbed, by Law & Order, by fashionistas, and by the Notorious B.I.G. (even the Wall Street Journal got in on the love train). If you are a spectator in the sport known as Manhattan residential real estate, you know the loft; the rest of you can click on any of the links above. Prepare. To. Be. Amazed.

I don’t believe that I know a single person who would be comfortable living in a loft like this, but …. But I truly respect the integrity behind the design. And the attitude of the seller, as expressed in comments on the first Curbed link above (“I create [sic] the home I want to live in, not what I think someone else will want to buy, and am happy to live with the consequences”; and bless her for engaging with the denizens of CurbedLand). She bought the space for $1.5mm in 2005 ($1,510,037 on December 19, 2005, for you completists), spent another million on the renovation (a relative bargain, that, in view of the scale of the changes), and didn’t care what a future buyer thought.

We’ll consider below how much The Market penalized the loft for the renovation (there is an interesting and highly relevant data point), but for now let’s review the (long!) history and enjoy the pimped out loft.

Sept 27, 2013 new to market $5.995mm
Mar 2, 2014 hiatus
Oct 23 back on market
Nov 12 $5.25mm
Jan 14, 2015 $4.995mm
May 27 $4.5mm
Aug 12 contract
Oct 8 sold $4mm

That’s four prices over two years (less one long hiatus), with all the market activity in the last year. Price drops of $745,000, then $255,000, then $495,000 evidence a certain regard for the (lack of) market response, and the final push to negotiate a $500,000 discount from last-ask (I wonder where that bid started…) evidences a respect for the (only?) serious buyers that emerged. The seller’s Curbed-comment above (I “am happy to live with the consequences”) followed the contract, so let’s take her at her word. She was happy with $4mm, after certainly testing The Market for a higher price.

if Dick Wolf thinks it’s a pimped out loft …

I was not going to post any interior photos, as they are all over the inter-tubes, but if any reader hasn’t clicked through yet, here’s one to wet your whistle:

black gloss, on black gloss, on black gloss (though the [black!] floor has a matte finish)

The floor plan is almost conventional (and easily adapted), though the master suite presents some … issues.

not many walls, including in the master bath

Imagine standing in the middle of the loft (say, at the middle window, looking back between the two walk-in closets) … you’d be looking across (over) the tub and behind the wall at what you cannot see in this photo:

the view from the great room includes the shower behind the stone wall but (presumably) not the toilet

To emphasize the point, note the reflection of the windows on the mirrored north wall of the bathroom. Those windows are, of course, in the great room. I can’t find it right now, but I read somewhere that the seller was amused that guests didn’t realize there are other bathrooms with doors (the two half baths, east and west in the middle of the north-south axis), presumably meaning that guests used that master toilet … more visibly when standing, but likely still visible when sitting.

As the alternate floor plan suggests, the footprint allows relatively easy adaptation to a conventional layout. But that “simple” is still a rather extensive renovation; indeed, a full gut unless some part of the kitchen and nearby half-bath might survive. With “3,750 sq ft” of flooring and ceiling to include, and much moving about of plumbing, that is a not-cheap opportunity.

Hence, $1,067/ft in a condo with monthly expenses under $1/ft. Yikes.

how did StreetEasy get this wrong??

Of course StreetEasy has the closing price in the Sale Recorded link in the listing history: $4mm. What’s odd is that the StreetEasy blog reported as fact on August 13 that the contract price was a half million dollars higher:

After a series of price cuts, the listing has now entered contract for an even $4.5M.

Curbed used that “fact” reported by StreetEasy in the link way above, which is where I saw it back in the day. I remember then being a little surprised that StreetEasy did not identify a source for the contract price (even an anonymous “source with knowledge of the deal”); after all StreetEasy knows that not all contracts are signed at the asking price. Right??

No biggie (see what I did there?) except for the anal among us.

But $500,000 is a healthy negotiated discount off the last ask. Not to mention, the sale was almost exactly one-third off the first ask, or a discount of $1.995mm from that 2013 try. Which brings us back to considering how much the … er … idiosyncratic design choices in The Black Loft cost the owner was discounted by The Market.

$725,000 is a big discount for so personalizing a loft, no?

The best way to estimate how much The Market punished discounted The Black Loft for being black (and for not having that wall in the master bath) would be if there had been a recent sale of a loft with the same footprint but a more conventional design. Life isn’t that good to me (alas), but we do have the loft just below The Black Loft that sold three years ago.

Loft #5S was billed as “3,500 sq ft” in 2012 marketing, but it sure looks to be the exact same footprint as loft #6S. (Granted, listing floor plans are not to scale blah blah blah disclaimers.)

do you see a difference between this and #6S above? I don’t. 5 South windows, same cut-aways (+ windows) in the east and west south corners.

The anal among you will keep in mind that #5S might be 7% smaller than #6S when we adjust for the different markets of August 2012 and October 2015. For the rest of us (ha!), we will ignore the issue and use the new StreetEasy Manhattan Price Index. That darn thing isn’t so easy to find (or use … what’s up with that??), but here is the most recent one I find, in an August 27 StreetEasy blog post about the Brooklyn and Manhattan market values. (The thing is easier to use if you look only at Manhattan [All].) In August 2012 the Index was $776,659, in July 2015 (the most recent month available??), $979,619. In other words (and after using a calculator), the overall Manhattan residential real estate market was up 26% from August 2012 to July 2015, as measured by StreetEasy. [UPDATE 10.30.15 The Index as of September can now be accessed through a StreetEasy blog post about 3Q15; the September Index value is $982,958, up just a smidge from July.]

If you’ve already clicked on the #5S listing, you know that #5S sold on August 2, 2012 for $3.75mm. Adjusting only for time (and only until July this year), you’d expect #5S to be worth about $4.725mm if sold this year in exactly the same condition as when it sold in 2012.

It is interesting that #5S did not quite have a conventional layout for a loft this large. The floor plan above reflects the 2012 sellers used the loft as a single bedroom plus office / guest room, kinda sorta like the way the #6S 2015 seller used her loft. The difference is that #5S is much more easily given a true 2-bedroom or 3-bedroom layout (it was originally a 3-bedroom), requiring less than 75 linear feet of carpentry, as in the original 3-bedroom layout.

It is also interesting that #5S also embodied an eastern design philosophy, just one that is opposite to the Shanghai bordello look upstairs.

With a design philosophy based on serenity & simplicity, large open spaces and clean contemporary lines, the home has been transformed into an urban sanctuary steeped in the art of Feng Shui.

(Whatever few words you would use to describe #6S, they surely are antonyms for “serenity & simplicity”.)

Back to the cold cruel numbers ….

The theory of the StreetEasy Manhattan Price Index is that it encapsulates past markets in a single number. If the logic holds (it is the best we have, I think), The Black Loft was penalized about $725,000 (more, if the October 2015 Index turns out to be higher than the July 2015 Index) for being bordello black instead of being serene and simple.

That’s not nothing, yet the seller said (on Curbed) that she was happy with the consequences after she signed her $4mm contract. Good for her, and her serenity. While she made some money (her 2005 tax basis was something like $2.5mm), she didn’t make as much money as you might think selling for $4mm, as she had some serious transaction costs and the expense of living somewhere else while the loft was pimped out way back when.

If she’s happy, I’m happy. And I’m thrilled to have the #5S comp to work with. (Her mileage may vary, of course.)

(If you want to be that anal, and consider that #5S might really be a little smaller than #6S, the comparison obviously gets a little worse for #6S.)

 

 

 

 

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