NY Times finds a Broadway chanteuse who loves her Tribeca loft

things Manhattan Loft Guy loves … include loft lovers

When the New York Times real estate feature “What I Love” works for me, it stars a celebrity who talks about her home (OK, her loft) and not just her stuff. This past weekend’s Judy Kuhn, ‘Fun Home’ Star, on Her TriBeCa Loft from the Sunday Real Estate section, fits the bill nicely. I don’t know the subject, but Kuhn’s appreciation for her “3,000 sq ft” loft and her neighborhood (Tribeca) is infectious. And it happens that I do know her loft (at least, others in the building).

Let her tell her story. I guess she wasn’t yet a Broadway star when she moved to a “small” loft on Varick Street with her then-boyfriend and now husband in 1989. I can relate, as we had the same experience moving from a small Upper West Side apartment to (what seemed like a huge Tribeca loft) in 1981:

“Friends asked, ‘Do they have grocery stores down there? Do the subways go down there?’”

When even her four-year old realized that Varick Street loft was too small for them, they had to move. In 1999,

They looked for a long time, just about losing hope that they could afford to stay in the neighborhood.

I can relate, except that when it happened to me in 1993, we looked at every loft in Tribeca of 2,000 sq ft or more (including possible combinations), but it didn’t work out, so we moved to a 2,200 sq ft loft about 30 blocks north. For Kuhn & Co. it worked out well, when a coop board with a second floor loft to sell that had formerly been commercial space preferred them, as native Tribecans, to other interested buyers:

What they moved into was a raw space with 13-foot ceilings, iron columns and, thanks to a row of windows front and back, loads of light. Guided by an architect friend, Nate McBride, they pulled up the carpet, exposing beautiful, if splintery, pine floors, yanked layers of industrial felt off the walls, then paved over much of the Sheetrock with narrow white boards to add interest.

(I wonder if her coop took ownership of the commercial loft after some sponsor litigation, as happened to my loft coop in 1993; when the market changed, we got the 2nd floor rezoned from commercial to residential and sold it … but I digress.)

Is it possible to be both relaxed and stressed by the same opportunity? In some sense, Kuhn took a relaxed view to renovating (and decorating) from 1999, onwards, though she describes it differently:

“I think there’s something about renovating a loft,” Ms. Kuhn said. “It takes so much work and so much thought, down to picking doorknobs and lights, which is so hard and stressful, and can test a marriage. And then you move in and live here for a while, and you figure you’ll deal with the fixtures later. And years go by, and you get used to the space just the way it is.”

Of course, nowadays people tend to buy primitive lofts to fix up right away, getting the messy stuff (and the expense) out of the way up front. Back in the day, lots of people did the same buy-and-move-in-and-figure-it-out-later thing. Kuhn & Co. were blessed with a flexible footprint (more on that, anon) and bountiful space:

The sheer expanse overwhelmed the couple with possibilities. They knew they wanted to hold onto the apartment’s sense of openness, but that was all they knew. “Because the loft is so wide, we went through different versions of a layout where we thought of having the kitchen over here and then over there and over there,” Ms. Kuhn said, pointing around the space. “And our architect kept making different models and showing us all the options.”

No putting on airs for them, and no hired decorator (despite having hired that “architect friend”):

Furnishing the loft has been a cheerfully extemporaneous business involving antiques shopping (for pieces like the glass-topped wrought-iron table in the designated living room), flea markets (for the schoolroom chairs around the barn-board dining table) and the kindness of friends (the couple inherited a pair of sofas, a coffee table and a rug from someone moving to San Francisco).

Click the accompanying Slideshow to see what they’ve done with the loft, and how broadly she smiles for the camera in it. Photo #2 gives a great sense of those “beautiful, if splintery, pine floors”, the high ceilings, the iron columns, and massive wood beams (I hate it when they leave out massive wood beams in listing the primitive charms of a loft). That photo also gives the best sense of the “sheer expanse” of the loft, which gave them so many choices about layout.

This is not the floor plan of her loft, but the footprint will be the same because this is the loft directly above:

that 2nd Slideshow pic is looking south (here, up) from near the elevator; the window walls are about 50 feet apart there (of course, her second floor is laid out completely differently)

That’s the floor plan from when the 3rd floor was marketed as a not-really-combined renovation project heading into The Quarter Formerly Known As The Peak.

the project the neighbors bought in 2008 for $1,219/ft

Way back when I used to blog about still-for-sale lofts, my December 22, 2007, 149 Franklin contract / from Halloween to Christmas, noted that I had missed the “3,150 sq ft” 3rd floor loft when it was an active listing, but caught it when it went into contract quickly. This is what the 3rd floor looked like, before renovation, with open joists and some sort of polished floor:

same windows, same columns + beams, but doesn’t look much like the 2nd floor loft

(The photo is taken from the Corcoran listing; all StreetEasy has from that listing is confirmation of the sales price, $3.84mm on March 31, 2008, and a death loop of links, none of which lead to that listing.)

I loved the possibilities in that footprint. From my December 22, 2007 post:

The layout just screams 2 combined units that are not very combined, with 2 kitchens that are too far apart to be kosher and only 2 points at which one can go from one ‘side’ to the ‘other’ (doorways, not integrated spaces). I assume a buyer will take on the challenge of integrating this large space. It is actually a terrifically flexible footprint, not quite square, with long runs of windows on the two longest sides.

The next visit to Kuhn’s building by Manhattan Loft Guy considered a partial floor loft, again a project, but by then with some new challenges that go unmentioned by the chanteuse. My December 13, 2011, loft with artist’s personality sells at $1,174/ft at 149 Franklin Street, dealt with a then-recent sale of

loft #5S at 149 Franklin Street that just sold [with] a very idiosyncratic character and a fascinating (odd) floor plan. No one who has seen it was surprised to see that it was the long-time live and work space for an artist, “2,300 sq ft” with a single bedroom, a living room facing Franklin Street, and the rest of the space (that bedroom and the large studio) facing south toward Leonard Street.

Even though only part of the full floor, this south-facing unit, was fairly large (“2,300” of the “3,150 sq ft”), with a still flexible footprint:

The footprint is likely to excite architects: first, note the plumbing stacks, then erase all the walls. There is so much more flexibility with this shape and those window than with the typical 2,300 sq ft Long-and-Narrow. I am a bit surprised (and rather impressed) with the clearing price, given the overwhelming temptation of any buyer to gut the space.

One of the reasons I was impressed with the #5S sale was the comparison to the 3rd floor sales price at The (then) Peak, another reason was a (then, recently sold) condo comp next door, while yet another reason was that the south exposure in this building was (is) very much at risk. See that December 13, 2011 post for details on each of these factors, but especially the development directly south of nearly all of the windows in #5S. That’s the same line of south-facing windows in the 3rd floor floor plan above, and at the far end of the 2nd photo in the Kuhn Slideshow.

a musical building

You’ve seen the New York Times photo of Judy Kuhn sitting and smiling at the Steinway baby grand “that had been in the family for a century” when her parents downsized while she upsized her loft.

Here’s a stand-up piano from the (old) 3rd floor:

(it’s way over on the left wall)

And here’s another grand from the (former) loft #6S owner, who sold for $2.775m on December 17, 2013:

looks like a full grand to me

That’s a lot of pianos for a 7-unit building. And it’s not even The Juilliard Building, one block south. One that … er … note, I will stop ….

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hyper-local loft market in northeast East Village is flat since March 2014

adventures in anomalous Manhattan loft sales, cont’d

There’s ‘the forest’ of Manhattan residential real estate, in which median sales prices and average days on market are best viewed; then there are ‘the trees’ of Manhattan residential real estate, in which individual sellers and individual buyers set prices for individual apartments or lofts. Of course, ‘the forest’ has ‘trees’ of different heights and widths, different colors, different species, and many instances in which adjoining ‘trees’ bear little relationship to one another. Today’s installment of It Takes Many Trees To Make A Forest concerns the underwhelming sale of the “1,274 sq ft” Manhattan loft #5E at 125 East 12 Street (Zachary) for $1.9mm.

Underwhelming may not be the first word that comes to your mind when you see a loft sell at $1,491/ft with a challenging layout (a single exposure with one very large window, a mezzanine sleep area, and no true bedroom), but how whelming is this? The May 6 seller at $1.9mm bought this East Village curiosity on March 31, 2014 for … (wait for it) … $1.9mm. Ouch. ‘The forest’ (the overall Manhattan residential real estate market) is up 7% in those 14 months (well, through February, the most recent month in the StreetEasy Manhattan Condo Index); this ‘tree’ is up exactly 0%.

this is a ‘challenging’ layout

Yesterday’s adventure in anomalous Manhattan loft sales went in the opposite direction, which is what the best pair of anomalies do. In that May 28, hyper-local penthouse loft market at Church + Leonard up 9% since January, the ‘tree’ was even more anomalous, as the headline reveals: the same Tribeca penthouse loft that sold for $4.45mm in January sold in May for $4,487,500.

In that Tribeca case of a quick flip, the math that was so impressive from the perspective of a market analyst busybody Manhattan real estate blogger worked not quite well enough for the actual January buyer / May seller, as he clearly lost money on the round trip. To me it is obvious that that guy did not set out to do a quick flip (there, the key supporting data point was that that buyer had to beat the ask by 11% to win a bidding war to close in January), as it should be equally obvious that the Zachary loft buyer at $1.9mm did not set out to sell at $1.9mm, losing significant transaction costs in the round trip.

While the calendar gap between purchase and sale is much wider in the case of loft #5E than with yesterday’s Tribeca penthouse loft, the recent seller actually tried to flip much more quickly than the sale dates suggest:

Mar 31, 2014 sold $1.9mm
May 6 new to market (!) $2.225mm
July 11 $2.15mm
Oct 14 $1.995mm
Dec 4 hiatus
Mar 10, 2015 change firms $1.95mm
April 3 contract
May 6 sold $1.9mm

As yesterday, I can’t imagine that this March 2014 buyer bought with the intention of selling so quickly. See that post for a litany of big ticket expenses involved in buying and selling a Manhattan condominium unit. There might have been a (net) profit if the resale worked right away and at the first ask, but that was chasing a rainbow, asking a premium of 17% five weeks after buying (yesterday’s 9% example notwithstanding).

Imagine yourself in this buyer-seller’s shoes late last year. The Market was creeping up (creeping, but up), but asking 5% over your purchase price was not attracting a new owner. Damn. Even exposing the loft within 3% of your (by then, year old) purchase price took more than three weeks to make that flat deal. Double damn.

yet another memo from the Department of Redundancy Department

As yesterday, two data points don’t make The Market. But they do contribute dots on the scatter graph that pictures The Market. It’s weird that two sets of willing seller and willing buyer agreed with each other at the same exact price, meaning that the market value of this loft was identical 14 months apart. But that happens because there are many trees in the forest.

speaking of a hyper-local East Village loft market …

Let’s say you decided that you simply had to live on East 12th Street, between 3rd and 4th Avenues. Would you prefer (a) a ground floor loft, or (b) a beautifully renovated loft with a challenging layout, or (c) a penthouse?

In the case of the recent purchasers of loft #5E, their answers appear to be All Of The Above, but in sequence, (a) then (c), then (b). Or maybe (a) first, and second both (c) and (b). (Stay tuned ….)

Note the notice address for the recent #5E buyers on the #5E deed record. They still own #PHA, a “2,376” sq ft duplexed loft with three bedrooms, a maid’s room, four baths, and three rather large “balconies” (they look more like terraces to me, but let’s not wander too far afield from a digression), which they paid $3.7mm for in July 2011.  I can’t find any publicly available photos for that loft from 2011, but the information from that “listing” on StreetEasy is awfully spare:

Stunning Penthouse with multiple terraces, four bedrooms and four baths.

Why would anyone leave a stunning penthouse for the challenging layout of the much smaller #5E? (Another hint: maybe they didn’t … below.)

Now note the notice address for the recent #5E buyers on the 2011 #PHA deed record. Yes, the recent #5E buyers sold the “1,935 sq ft” duplexed ground floor (and below) loft #1H (which also has a mezzanine master suite) for $2.2mm in June 2011, a month before closing on #PHA. They moved from one loft on the bottom (that also goes lower) into another loft on the top (that also goes up). A lot more light up there, and if the “stunning” but spare penthouse able is correct, the upper unit is much nicer overall.

2011 must have been a good year for thees folks, as they sold #1H at a loss to the $2.3mm they paid in July 2008, yet still upgraded to #PHA for $3.7mm. And 2015 seems to be another good year, as they add #5E to the mix at $1.9mm. It’s been awhile since I went all Manhattan Loft Voyeur on anyone, but this one is fascinating.

a theory of serial loft acquisition at The Zachary

The ‘building notes’ in our listing system describe The Zachary as a 5-story building on top of which four penthouses were added when this 1895 building was converted to condominiums in 1986. The penthouses appear to be duplexes, with the lower level and some outdoor space on the 6th floor (the old rooftop) and a smaller space duplexed above, with more terrace way up on top. That’s the layout of #PHA (link above), the recently sold #PHB, and #PHC, which sold in 2009; #PHD has to be similar.

Unless these folks are buying auxiliary living space to remain separate for teenagers, in-laws (staff?), I wonder if loft #5E sits below penthouse loft #PHA. Then they could triplex the penthouse. Loft #5E already has that mezzanine close to the 6th floor floorboards, which seems like an odd thing to keep if you were to combine the loft with the penthouse above, but money doesn’t seem to be an issue for these folks. If this is a combo-in-the-making, they are most likely to gut #5E down to the one level, sending the mezzanine master and kitchen to a dumpster.

The result will be three levels of more than 3,000 sq ft interior, with three huge “balconies” and one regular (modest) balcony. Anyone in the household could get lost in that configuration.

 

does #5E sit under here the First Floor somewhere? makes sense …

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hyper-local penthouse loft market at Church + Leonard up 9% since January

resale was way up, but profit … don’t ask

The guy who just sold the “2,135 sq ft” penthouse loft #5 at 249 Church Street may have worried when he paid 11% over the ask to buy it in what must have been an exciting bidding war. He needn’t have been concerned about having stretched past The Market to buy, as we found out when he sold it after four months for another 9% above what he paid. That’s a pretty strange way to flip a loft, so is unlikely to have been his plan from Day One.

One wonders what his plans were, but here’s what happened to this busy loft on this busy corner in northeast Tribeca:

Oct 15, 2014 new to market $3.995mm
Oct 24 contract
Jan 16, 2015 sold $4.45mm
Mar 6 new to market (!) $4.895mm
April 8 contract
May 6 sold $4,847,500

It’s a beautiful loft, of course, but let’s wait to take a direct look until we play with the numbers a bit.

The history table shows an awful lot of excitement in less than eight months, with the first seller in this set being very excited and the buyer-turned-second-seller being more relieved than anything else, I suspect. After all, if the January sale price was truly a market price, the market value of the loft increased by 9% in four months (a period in which the overall Manhattan residential real estate sales market was likely flat), but the accidental flipper pocketed no profit.

Start last fall, when the first seller was surprised (thrilled!) that a bidding war drove the value to $4.45mm. That seller thought it was worth $3.995mm or something close to that, yet in eight days found a deal 11% above ask. I have some qualms about whether a bidding war price is a good comp (see my May 18, no rational market evident in 708 Greenwich Street loft sale $260k over ask, for example), but here there’s little doubt.

The StreetEasy Manhattan Condo Index is, as regular Manhattan Loft Guy readers know, my go-to single-number proxy for The Market; it hasn’t yet been updated to include March or April index values, but is essentially flat in January (244.54) and February (243.76). If you prefer to use contract months rather than sale months as market values (let’s not get distracted now with why you might do that, but for present purposes I won’t quibble), the Index was (again) essentially flat, at 239.68 when the first contract was signed in October and (again) 243.76 in February (the closest month to the second contract).

To repeat: no one wanted to spend more than $4.45mm for this loft as of October (contract) or January (closing), yet someone wanted to pay $4,847,500 in April (contract) or May (closing). While exciting for market analysts, The Guy Whose Plans Changed didn’t get to pocket the $397,500 in (gross) profit. TGWPC paid the ‘mansion tax’ plus title insurance in January, then paid a sales fee plus New York State and City transfer taxes when he sold this month. Worse, Property Shark shows that TGWPC got a mortgage of $3.192mm to buy the place, so he paid a mortgage recording tax. These are big chunks out of what started as $397,500 in “gross profit”:

($44,500) buy-side mansion tax (1% of his purchase)
($26,700) title insurance on the buy (let’s ballpark that at 0.6%)
($61,446) mortgage recording tax on the buy (1.925% of principal)
($242,375) sell-side sales fee (5%, per our listing system)
($84,467) transfer taxes on sale (1.825%)
($61,988) net loss

To repeat (again): no one sets out to buy a loft in a bidding war, planning to sell so soon after. In this case, it took an appreciation of 9% to lose only five-figures, after considering obvious big ticket transaction costs on the round trip. Indeed, had the January-buyer-May-seller (aka TGWPC) gotten his full asking price that last number above would be smaller, but still would be in red.

There are eight million stories in the naked city, as we well know, and this guy’s plans changed. It could have been worse, but this couldn’t have been a happy experience. Not least because he no longer has the chance to live in this lovely penthouse loft.

potential, realized, in a lovely Tribeca loft renovation

The loft has two structural things going for it: a square footprint with windows on the entire south and west sides, and high enough ceilings to permit a mezzanine level on about one-third of that footprint. Make that three things, as there is a deeded roof deck of maybe “500 sq ft” (per the border babble) or “480 sq ft” (though the floor plan disclaimer cautions against doing something so simple as multiplying the dimensions 24 x 20 ft), or some similar number. (Access to the roof terrace is a mystery, and still “requires a deck build out”.)

the great room, the kitchen, + the master all have full height (15 ft!) ceilings; that floating closet has to be on top of the master closet, right?

The finishes are enthusiastically babbled:

impeccably-renovated ….[,] chic, triple-mint living space … 11 massive triple-glazed windows …. with classic and modern elements like gun metal steel columns, a remote-controlled fireplace, top-quality 7″-wide LV Hakwood smoked white oak floors, floating steel stair and solid oak bookcases standing an impressive 14′. … a premium stone wrapped chef’s island kitchen styled with only the finest Eggersmann Cabinetry, Gagganau, Wolf, Miele and Dornbracht hardware. … master bedroom wing with a custom walk-in closet and indulgent Carrara marble/Basalt spa-like bath graced by radiant heated floors, a heated towel rack and other fine appointments. … automated Control4 system gives you remote one-touch control of lighting, heating/cooling, door locking/unlocking, security and camera surveillance from your smart phone or tablet, plus is wired for easy AV install. … electric zoned solar and black-out shades, a laundry room with sink & pro-sized appliances, wine storage room, high-pressure HVAC and sound-proofed flooring.

Other creature comforts are presented with a peculiar syntax: “flooding natural light from South & West exposures, and stretching views down to One World Trade Center.”

There’s only a single photo left on the Elliman site (more on the StreetEasy link, above), but it is perfectly consistent with the enthusiastic babbling:

yup! gun-metal steel columns, tall ceilings, massive windows, even a (very) old-school radiator … looks great!

Between buying the place in January and selling in May, it is doubtful that the guy lived here. If he did, his selling team preferred the previous owner’s furnishings to that of the (short-term) owner, as the photos (and much of the listing description, paraphrased) are taken directly from the prior listing (which might explain why the photo above doesn’t have the Elliman watermark). What had been “a thoughtful and meticulous renovation” became “impeccably renovated”, perhaps because the previous owner was more proud, having done the renovation in the first place.

When I saw the recent listings, when I noted it had sold twice, the loft seemed familiar … but not quite. That’s because when I had a buyer interested way back in 2012 the loft was smaller (!) and invited a renovation. That listing was bare bones:

50′ x 40′ full floor corner residence with full private roof rights, 11 windows surrounding and soaring 16′-17′ ceilings. … A traditional loft space as-is or create a 2-3 bedroom with standing mezzanines and internal stairwell to roof deck.

Those dimensions must have been from the outside walls, as the condo unit was apparently “1,588 sq ft” back then (as reflected in the January 2015 deed record). (It is possible that the ceiling heights were dropped in the renovation; what had been “16′-17′ ceilings” are now “15 ft”.)  Sold as a simplex in need of a renovation in 2012, the renovation added about a third to the interior space (as noted above, hence, “2,135 sq ft” as recently sold and “over 2100 sq ft of interior” when sold in January).

It is curious that the 2012-buyer-turned-renovator-then-2015-seller didn’t add the “internal stairwell to roof deck” promised in the 2012 listing. (The January-buyer-turned-May-seller didn’t have time, so no mystery there.) Maybe the elevator goes all the way up to the roof; otherwise, not having direct roof access is a strange compromise for a luxury “penthouse”. Stairs are a very disruptive element to add to a loft after a “meticulous” or “impeccable” renovation, but maybe it could be done by extending the existing stair up to the “gallery”; otherwise, that doesn’t feel very “thoughtful” to me. Apparently, the 2012 buyer thought he’d done enough (roof build-out “[p]lans already drawn up for the purchaser”) to make the roof a salable commodity, even if he didn’t use it. Weird ….

But not as weird as the January buyer putting the place right back on the market, seven weeks after closing a winning bidding war by bidding 11% over the ask.

And certainly not as weird as The Market rewarding the January buyer by providing a new buyer in April at another 9% over the January price. (Recall that the guy [aka TGWPC] still lost money on the round trip, which is not weird at all.)

a data point is not a trend; nor is a pair of data points

Nobody should extrapolate too much from this peculiar (unique?) pair of free market transactions on top of 249 Church Street. The facts are that the penthouse loft was valued by The Market at $4.45mm in January and in May at $4,847,500. An aggressive seller of another loft in Tribeca might look at this sequence as inspiration for raising an unsuccessful-in-2014 price. That aggressive “seller” should likely remain an “owner” longer than if a price drop followed, but that’s what’s fun about Manhattan residential real estate, especially in the downtown loft niche: facts is facts, but everyone is entitled to an opinion.

Manhattan Loft Guy readers are, of course, entitled to my opinion, in fact.

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the $2.5 million Manhattan loft solution, in the East Village, NoLIta & West Village

variety is, as they say, the spice of life in a downtown Manhattan loft

So far, deeds have been filed for 34 lofts sold in April, as reflected on my Master List of downtown Manhattan loft sales under $6 million. It is likely that additional deeds will be filed for April sales, but as of now four of those 34 sales were at (around) $2.5 million. They are, of course, a varied lot, though it’s only about a mile and a half crosstown between the furthest pair of these four lofts. If two and half million is what you wanted to pay, you could have had a “1,392 sq ft” mezzanined loft in the West Village, or a “1,665 sq ft” duplex loft in the (far) East Village, or a “2,200 sq ft” loft in prime NoLIta that needs a renovation, or a dark “2,300 sq ft” duplex loft with outdoor space in the (near) East Village. But now you can’t anymore, as it was someone else who bought each one of them in the first ten days of April.

a classic loft in an area not known for them

The “1,665 sq ft” East Village loft #4 at 211 East 2 Street (the Carriage House Condominium) is pretty far east (just past Avenue B) and full of bricks and beams. The small condo (8 units) was new in September 2006 (original sponsor sale: $1,069,162!) and the conversion emphasized classic materials:

wide plank floors, lots of brick, huge windows, high ceilings, and all that wood on the ceiling

There’s a lot of utility squeezed into “1,665 sq ft”, with four bedrooms (three, if you use the en suite “library / bedroom” as a library) and three full baths, with the master suite up the stairs at the library end:

high ceilings + tall windows might make this space feel bigger than the (modest) room dimensions

This is a value play for the four bedrooms and new finishes, in a neighborhood that has not traditionally been seen as family-friendly at this price point. It came out a little high ($2.695mm on November 17) but went full ask after dropping to $2.495mm on December 10 (contract by January 2, closed on April 8).

a private sale that likely reflects The Market for downtown Manhattan lofts

You never got the chance to buy the “2,200 sq ft” NoLIta loft #6 at 241 Lafayette Street, because the sale at $2.5mm on April 6 was accomplished without public marketing. As a private sale, one can’t assume it reflects the true market, but if it was truly arm’s length (another factor we can’t be certain of), it reflects the buyer’s and seller’s best approximation of market value. My guess is it was sold to the tenant who rented it out last year. That 2014 rental listing gives us the information about the loft, with (only a few [because: rental!]) pictures and a floor plan. Not much bragging in the broker babble, and none about the finishes.

electrical running on the ceiling and along the wall suggests a fairly primitive space

The photos are better on StreetEasy than on Elliman (from which the pic above was taken), and it is easier on the StreetEasy pix to see what I am talking about in the caption above. With five photos but none of the kitchen or (single) bath, one is entitled to conclude (provisionally) that those elements are neither mint-y nor fit for a chef.

The floor plan is as basic as basic gets:

classic Long-and-Narrow footprint with a classic 2-bedroom layout and limited plumbing flexibility

Not a lot of thought evident in this floor plan, with no effort made to make that second “bedroom” code-compliant (too narrow, by 5″), or to line up the other bedroom wall with either the bathroom wall or the closet wall. (Another hint of an overall primitive condition.) Another hint: the kitchen seems no bigger than the bath, despite being located where it could easily be much longer. I’m guessing this layout hasn’t changed in at least 30 years.

Both the buyer and seller of the 6th floor at 241 Lafayette Street knew that the last sale in the building was the 4th floor, in December at $2.725mm. That one featured two baths and babbling about a chef’s kitchen and other finishes. That public sale of the 4th floor at $2.725mm likely was built into the valuation of the 6th floor four months later, with a $225,000 discount for condition, despite being two floors higher.

Those 4th floor photos show that the 6th floor must have wonderful light and a lovely view down Lafayette. This is the only loft in this group with a great view, and probably also has the best light. And the only one with a need to renovate.

much space, little light in the (near) East Village

Ground-floor-and-below duplexes are a different species of Manhattan loft, posing many challenges that reduce the buyer pool. The trade-off, for buyers not scared off by sidewalk level windows and a downstairs that can feel like a dungeon is that there is a potential dollar-for-space value play. In the case of loft #1F at 59 Fourth Avenue, that play yielded “2,300 sq ft” of interior space with 14 foot ceilings on the main level, plus a private courtyard, for $2.475mm on April 1.

classic (authentic!) loft features such as high barrel vault ceilings, brick, beams … but almost no natural light + certainly no view

file this floor plan under “awkward” (but: “2,300 sq ft”!)

There is one of those weird listing histories here, with a price that seemed to be too high replaced after two months with a price that proved to be too low, resulting in a contract in a month $25,000 from the price previous deemed ‘too low’. Not nearly as dramatically weird history as in my May 18, no rational market evident in 708 Greenwich Street loft sale $260k over ask, but still a sign that a price drop deemed ‘too low’ by The Market can be overcorrected for and result in a sale at a price seemingly not available when asked for directly. But I digress ….

Loft #1F shows how much space you can get if your Must Have list doesn’t include light or a view. It also shows how value can be created by a mild renovation that ‘cleaned up’ the space, as the recent seller at $2.475mm bought the place in June 2012 for $1.302mm. That 2012 listing shows that no walls were moved, that the kitchen appliances and layout was unchanged, but that the loft had a completely different ‘feel’ (clutter!) back then. The overall Manhattan residential real estate market was up only 26% from June 2012 to now (per the StreetEasy Manhattan Condo Index, of course); the 2012-buyer-turned-2015-seller-after-a-mild-renovation sold at a 90% premium to his purchase (gross, obviously, but still). And I digress, again….

meanwhile, back at $2.5 million in the West Village ….

The Printing House condominium has seen a large number of very high price-per-foot sales for newly renovated (often, newly combined) units, following the bulk purchase of a big chunk of the building by a developer, who put 60 units up for resale. (Sheet 2 on my Master List has these sales; the StreetEasy building page has details, of course.) The “1,392 sq ft” (per our listing system) loft #523 at 421 Hudson Street was not one of those developer resales, but was sold for an even $2.5mm on April 10 by someone who bought it for $1.9mm in July 2013 and then dressed it up.

The floor plan looks as it did in 2013, but the ‘skin’ (and kitchen) are very different.

another duplex, in this case with a double-height living room

For the recent sale, the loft was babbled as “a complete full restoration”, which is a peculiar locution. But the details included:

new electric and plumbing throughout as well as a new central HVAC system [and … an] open eat in kitchen … custom made … with top of the line appliances …. [and] brand new solid oak 6’ wood floors through out ….

Trust me (or click the old listing), the steel and frosted glass is a much more ‘clean’ look:

yet another duplex

Of course I wonder if that 2013-buyer-turned-renovator-and-2015-seller bought in order to renovate and flip into a market juiced by the developer sales (and the developer’s new amenities and common areas), but it’s not hard to see the logic. Without knowing the renovation budget, we can only speculate about how well this worked out … but that sort of ignorance never stopped me.

The Market (per the StreetEasy Condo Index) was up 16% between the July 2013 buy at $1.9mm and recent sale at $2.5mm, implying that if the guy did nothing to the space he could have sold for a bit more than $2.2mm (before considering the degree to which the general improvements to the condo by the developer would have been an Out Perform factor anyway). New electric, new plumbing, new kitchen, new “steel staircase features custom railings with steel airport cables”, new “custom steel and glass panels with two sliding doors” in the master, and (presumably) new “custom lighting throughout the space” would each take a chunk out of any profit.

Guy started out asking $2.638mm (a wonderfully precise ask), dropped to $2.595mm, and negotiated to a mutually acceptable $2.5mm, so either he was being modest in his expectations or he needed to get out. The seller at 59 Fourth Avenue did very well in buying in 2012, fixing, then selling last month at a price that dramatically out-performed the market … this guy at 421 Hudson Street, not so much.

Back to the 59 Fourth Avenue comparison. That East Village duplex space, as we know, is big and dark, and includes a patio. This renovated West Village duplex space in the “newly refurbished” 421 Hudson Street has little loft character but is in a high amenity and high value condo. And its just a bit more than half the size of the East Village loft interior.

In a free market, of course, you get what you pay for. Each of these buyers paid $2.5mm (picky readers will note that one paid $2.495mm and another $2.475mm); each got a very different loft, in very different neighborhoods; three got finished lofts, while one bought a bit of a project.

 

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what would have happened if they renovated the kitchen to sell 105 Fifth Avenue loft?

might have saved a year, or a few bucks

This kind of Manhattan loft broker babble intrigues me, not for the editorial choices but the ownership choices:

Having undergone an extensive renovation (with the exception of the kitchen), the loft offers all of the conveniences of modern living while retaining Old World charm.

The loft in question is the “1,522 sq ft” Flatiron loft #7E at 105 Fifth Avenue, which sold for $2.05mm last month after having been marketed nearly continuously since November 2013. I am intrigued about the decision not to renovate the kitchen when the “extensive renovation” was done because I think that decision demonstrably cost the owner some money (and time) and because I’m always interested in whether owners make renovation decision based on resale or their own enjoyment. In this case, it may well have been a decision made for her own enjoyment, which is usually a good thing. The fact that it may well have cost the owner time and money is unfortunate, perhaps, but so long as she made the decision with eyes fully open … that’s life in the big city.

adventures in Manhattan loft babbling, and the limitations of the form

Let’s start with the loft, then go to the dollars. First with a photo, then a thousand words (just kidding):

the main listing photo is (as per usual) the best: showing high ceilings, big windows, columns, and some woodwork

The broker babble is less than a thousands words, but recites a long litany of features and improvements:

  • “Corinthian columns” (though I only see one)
  • 11 foot ceilings
  • “authentic weathered hardwood floors”
  • 7 floor-to-ceiling mahogany-cased windows (Pella commercial double paned glass)
  • Waterworks tiles and fixtures in both baths
  • Master bath with in-wall speakers, and honed Carrera slab around the 7-foot long soaking tub and countertop
  • guest bath walls with Venetian plaster
  • Crown and baseboard moldings added throughout
  • new radiators
  • “Special customizations” include extensive, high quality millwork (new floor-to-ceiling bookcase in living room, a custom built home office, almost 15 linear feet of closets for extra storage space, built-in bookshelves in 2nd bedroom)

You’d say no detail was overlooked or no expense was spared in the renovation, except we know the kitchen was not renovated. Since we’re quibbling, notice the relative lack of closets in the master and the complete lack of closets in the second bedroom:

the “almost 15 linear feet of extra storage space” (on the East wall) is both needed and as far from the bedrooms as it can be

The loft has only that single south exposure, so there are very practical limitations on how to configure this as a real two-bedroom, despite the “1,522 sq ft”. And with the plumbing limited to the north wall, there aren’t even many option for a second interior ‘bedroom’.

The kitchen, of course, is not pictured. But it took me a lot of backing-and-forthing to realize it is behind the wall in the center of this photo:

From the litany above, the “extensive renovation” addressed some creature comforts (bathrooms and storage) but the bulk of whatever the budget was seems to have gone to quality. Venetian plaster, custom millwork, Pella, Waterworks, even the new radiators, all seem to be aesthetic improvements rather than functional improvements. Put in other terms, making life in the loft more beautiful.

While that seems inescapable, there are two elements not addressed, clearly on purpose. The kitchen, obviously, which presumably was ‘good enough’ for the seller, if not for marketing purposes. And those “authentic weathered hardwood floors”. I just don’t get this: note in the photo above the different color finishes, with the lighter wood running out from the kitchen door, and the perpendicular run of boards from the corner of the larger rug to the corner of the smaller. At some point in the past, all the floorboards went in the same direction; at some point in the past, a section of flooring was repaired, but repaired without regard to overall trend of the floor.

I simply don’t get why someone would spend money on Venetian plaster and custom millwork (to take just two examples) and not finish the floors in a uniform manner. Not very “authentic”, and not uniformly “weathered”!

I will come back to the finishes of the loft, but let’s get to dollars.

 a long road to a large discount

It’s all there in StreetEasy but you have to click on the past listings to get this full history (short breaks from marketing omitted):

Nov 19, 2013   new to market (by owner) $2.5mm
Dec 6 offered by broker $2.595mm
Feb 10, 2014 $2.395mm
June 19 $2.295mm
Jan 7, 2015 $2.15mm
Feb 4 contract
April 2 sold $2.05mm

That’s 15 months and five prices from first offer to contract. It’s a little distracting but fascinating that the owner started to sell on her own, before changing course and hiring a top firm in about two weeks. The sequence is consistent with a (very typical) conversation between owner and agent like this: “we’ll start at a price consistent with your idea of value (that also pays [part of] our sales fee), but if we don’t get an offer in two months we will suggest a price drop”. A cynic would say the sequence is also consistent with the agents ‘buying’ the formerly-FSBO listing by promising a price unavailable in the market, but that’s not me. (I swear.)

What is clear is that all five asking prices were wrong, but that the last asking price wasn’t so wrong as to prevent a deal at a reasonable discount. The seller got out 18% less than where she started (gross, before considering the sales fee), 21% off the highest ask, and (only!) 5% off the last asking price.

there is relevant local history

Before the #7E owner started down this road there wasn’t much useful closed sale data from within the building. The “1,400 sq ft” loft #5A was sold to the next door neighbor in July 2013 for $1.8mm, but that’s little use as a comp. Not only was it not exposed to the public market, but we have no public information about the condition of this loft, which had been owned by the 2013 seller since 1995.

But then loft #7B sold for $2.55mm in December 2013, having been offered by (this can’t be a coincidence) the agents just retained to sell #7E. Loft #7B was a little bigger than #7E (“1,750 sq ft”) but functionally similar (2-bedrooms, 2 baths) in a corner with two exposures. The condition of the two lofts were likely similar, with the critical difference that #7B bragged about its kitchen. As of October 2013 (when #7B went to contract), hard data from The Market offered little hope that the smaller #7E could attract a buyer near the $2.55mm that #7B got.

Hence, eventually, the February 2014 price drop to $2.395mm. And the June drop to $2.295mm. And, to get way ahead of ourselves, the January 2015 drop to $2.15mm.

The story got a reset between the last two #7E price drops. Those #7B buyers at $2.55mm in December 2013 put their unit back on the market in September 2014 and quickly found a buyer at full price (contract within a month, closed on November 26, 2014 at $2.695mm). Thankfully, the #7E owner did not take the wrong message about what a higher price for #7B said about her loft’s value, and she reacted to continued market indifference at $2.295mm by that last drop in price in January. As we know, that one did the trick, along with a 5% negotiated discount.

The spread between #7B at $2.695mm in November and #7B at $2.05mm in April is so large that we need revisit the comparison between the two. The $645,000 spread is smaller on a dollar-per-foot basis, with the larger #7B at $1,540/ft and #7E at $1,347/ft, but I am not convinced that dollar-per-foot is the better comparison.

the extra feet don’t add much, IMHO, but the 3 windows over Fifth Av are a big plus

The Market said that #7B is the more valuable of these two lofts, by 31% on an absolute dollar basis (that $645,000 spread) and by (only!) 14% on a dollar per foot basis. Some of that spread is from the corner exposures in #7B and the rest is the kitchen, apparently in need of renovation in #7E. You could spend $100,000 an a spanking new kitchen in #7E, as chef-ready as you like, and still bring the dollar-per-foot value (if every dollar of renovation added a dollar of value) only up to $1,413/ft, still leaving #7B at a 9% premium on a dollar per foot, or $545,000 on absolute dollars.

(We know from yesterday’s post that the overall Manhattan residential real estate market was essentially flat between the sale of #7E and that of #7B.)

I don’t think that even that hypothetical spread (with the hypothetically chef-y kitchen in #7E) can be accounted for by the three Fifth Avenue windows in loft #7B. Hence, my belief that the #7E seller did herself no favors in choosing to extensively renovate her loft without touching the kitchen. She ‘saved’ the out-of-pocket expense for the kitchen, but forfeited the opportunity to compete with #7B on more even terms. She’s free to use her dollars as she wants, but I wonder if she knew that that’s what she was doing ….

not to climb back on that dead horse, but …

Not to be critical of the #7E owner’s taste on a personal level, but I can’t be the only person who looked at the decor and finishes of loft #7E and thought “that doesn’t look very loft-y to me”. While decor and finishes are cosmetic and easily changed, such changes to high quality work is throwing that good money away that it took to create the ‘look’ in the first place.

Start with the crown and baseboard moldings, features not typical of ‘classic’ Manhattan lofts. The light fixtures (chandeliers?) in the living area and both bathrooms are whatever the opposite of ‘industrial’ is. Remember the invisible kitchen? Closed! In short, this Flatiron loft looks more like a Greenwich Village Gold Coast prewar apartment than it does a loft.

(The loft was babbled as “Located in the highly coveted Gold Coast off lower Fifth Avenue”, but I have never heard anyone [else] describe 18th Street as “lower Fifth Avenue” in loft terms, nor anyone claim that the Gold Coast extended beyond the Village. But I digress. Alas.)

I suspect that the overall visual impact of the space didn’t help market loft #7E to Manhattan loft buyers. If so, there’s a discount to be exploited by the new owners by doing simple things like replacing the chandlers (assuming the seller didn’t take them) and stripping away (some of) the molding. Extra points for taking down the “new floor-to-ceiling bookcase and a custom built home office” to open up the to-be-renovated kitchen.

Or not, as the new owners are as free to live without judgment from Manhattan Loft Guy as the former owner. But if they put it on the market, I have a license to consider how their choices impact market value.

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no rational market evident in 708 Greenwich Street loft sale $260k over ask

an ‘efficient’ Manhattan loft market requires more transparency than a bidding war can offer

From November 2014 to February 2015 the overall Manhattan residential real estate market was essentially flat, unless you consider a change of .01% to be a significant deviation from the horizontal. (That’s per the best single number proxy for ‘the market’ that I am aware of, the StreetEasy Manhattan Condo Index, which went from 241.00 to 243.76 in that period.) From November 2014 to February 2015 the asking price for the “1,360 sq ft” Manhattan loft #3F at 708 Greenwich Street deep in the West Village went from $2,388,888 (November 11) to $2,249,000 (January 8) to $1,999,999 (February 23). The Market had two months to decide that it didn’t like that first asking price and six weeks to decide that it didn’t like the second, but it took only two weeks to like the third price. (Hold that thought….)

In the four months from that November 11 entry to the market and the March 10 contract, there were about 160 downtown Manhattan lofts that closed that had sufficiently rich data to calculate days on market (per my Master List); 39 of the about-160 went to contract within 30 days (in Red on the Master List) and another 29 within 60 days, compared to 119 days for loft #3F. You’d think from this litany that #3F was a bit of a laggard, rather long on the market and with the two price drops. This being Manhattan Loft Guy, and you already having a hint in the title, however, you won’t be too surprised to learn that the loft went to contract on March 10 (after those 119 days) above ask.

If you clicked on either the listing link or the Master List link you won’t be as surprised as I was to note that loft #3F sold for $2.26m. That’s a healthy 13% premium to the last ask and a head-scratching $11,000 over the middle ask (only a half a percent, but that’s not the point). It seems obvious that someone could have bought this loft for $2.249mm from January 8 (a little earlier, even) to whenever the two potential buyers collided in late February or early March.

That may not burn the successful bidder (who only paid 0.5% over the middle ask, after all) but it might burn the unsuccessful bidder who lost the bidding war over the $1,999,999 ask. And it should really burn fans of efficient markets.

To repeat some market ‘facts’, in reverse:

  • the market value of loft #3F was $2.26mm on March 10 (d’oh! that was the price agreed to by a willing seller and a willing buyer, neither under compulsion)
  • the market value of loft #3F was less than $2.249mm for a non-trivial number of weeks from (probably) late December until (probably) late February (d’oh! they were asking; there were no takers)
  • the market value of loft #3F was less than $2.4mm for the last two months of 2014 (d’oh! they were asking; there were no takers)
  • it took 119 days for loft #3F to find a contract within 5% of its original asking price, an asking price that demonstrably failed to attract an acceptable offer for two months

(head … hurts ….)

meanwhile, back in the loft …

Not surprising, for a coop loft that sold for $1,661/ft, loft #3F has a lot of charms. A renovation babbled as “stunning” (with a chef in the kitchen and a rain shower in the bath), ceiling heights as “enormous”, details as “original” (with massive wood beams, columns and capitals), even a washer-dryer and a fireplace. The coop has some useful amenities (roof deck, bike room) and a live-in super.

the best angle, with the most charms

What the loft does not have: (much) private space, with a single bedroom and a single bath. Of course you could add a second bedroom, but that would ruin the sense of space from the kitchen and dramatically shrink the great room:

a 2nd BR would eat that other S window, and there’s no place to add a bathroom, I guess, without really shrinking the kitchen

This space isn’t large enough to be a true Manhattan Loft Guy One Bed Wonder, but it is clearly optimized for what it is: a lovely space for however many people sleep in that one room, who can enjoy the “over 1,000 sq ft of generous living space with soaring ceilings and two exposures”, who like to cook (a huge kitchen, proportionately) and entertain (on the roof, if the two exposures aren’t enough inside).

So I can see why it was popular enough to attract two bidders. I have more trouble seeing why it did not sell earlier than it did. But I shouldn’t quibble….

 

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replacing nude woman with a slut sells Village loft at 12 East 12 Street at $1,806/ft

well, that, a few discounts, + 18 months

Sergeant Joe Friday would ask only about the asking prices and timing of the “2,750 sq ft” Manhattan loft #3S at 12 East 12 Street on the Gold Coast of Greenwich Village; others would consider the decor as a factor in the eventual sale of this lovely loft. First we’ll give Joe his facts, ma’am, and then we’ll consider art and offense:

May 20, 2013 new to market $5.75mm
Sept 9 $5.65mm
Nov 5 $5.225mm
June 30, 2014 hiatus
Sept 4 change firms $4.995mm
Nov 10 contract
March 11, 2015   sold $4.995mm

(note that there were no off-market gaps in our listing system, contrary to StreetEasy’s history)

That’s 16 months of active marketing to get to contract and 22 months until “sold”, overall, but only 3 price drops. An outsider never knows who was pushing the pricing strategy, as between the sellers and their agents, but they were clearly wrong for 13 months. Then right. There is no “marketing strategy” so right as being at a price that will attract a buyer, but there were some non-monetary changes that make me curious about strategy.

 what do ‘they’ say about idiosyncratic decor? about ‘offensive’ art??

The loft is essentially square, with the unfortunate twist of a single exposure. A rather large space, it is optimized for a single person or couple, with but one (legal) bedroom and a (dark) guest room stuck in the northwest corner.

great place to live, if you only have “guests”

Nothing says ‘grown-up loft’ quite like a Wine ‘Cave’ as big as some kid rooms, right? Whether a dark and textured master suite is grown-up or not, it is idiosyncratic, and (as we all know) idiosyncratic design choices can shrink a buyer pool. While this is just ‘skin’, some people can’t see past it:

a curiously bare floor, what with all the other busy-ness

Artwork can also be gown-up. And idiosyncratic. The piece on the dining room wall is sufficiently idiosyncratic that I (who know little about Art) had to think that “Tulsa slut” meant something.

(it can be hard to read at this scale + resolution, but that’s T U L S A  S L U T)

The blue and yellow (print? canvas?) has to be a variation of a word-painting at MoMA.  Just don’t ask me what it means. Now, it’s not likely that anyone interested in a grown-up loft would be offended by this art, but what struck me is that in the over-priced period for this loft there was a very different piece of art in this location. From the 2013-14 listing:

yeah, that’s a naked woman

You can see it better in pic #4 from the StreetEasy listing from 2013 (which I cannot embed, alas). For all I know, both the 2013 naked dining room piece and the Tulsa Slut piece are highly acclaimed and very valuable pieces of art Art. What caught my eye is that the one replaced the other. Maybe that was an Art Transaction, or a rotation of collection. Or maybe someone considered whether the loft was more sale-able (more easy to relate to) with the word art instead of the naked art.

Of course, I have no idea what the sellers were thinking throughout. And it is much more likely that the loft didn’t sell in 2013 or (earlier) in 2014 because the price was too high. But I find the change in art curious….

not much like it in the building

The Past Activity tab on the StreetEasy building page indicates the variety of loft sizes in this 26-unit 12-story condo, converted in 1982, with lofts as small as “800 sq ft” or “1,000 sq ft” and full floor lofts at either “5,600 sq ft” or “6,000 sq ft” (at least one “measurement” in each pair must be wrong, and the “800 sq ft” loft might also be “1,100 sq ft”, but don’t get me [re-] started on that). In a building with such scale variations, even internal comps are difficult to apply. Worse for the #3S sellers and agents, while loft #3S was offered for sale only two neighboring lofts sold, both without public marketing (the small #7NE in June 2014 at $954/ft in what looks like a distressed sale, and the “1,760 sq ft” loft #1C in September 2013 at $1,250/ft).

Prior to #3S coming out at $2,091/ft, the “1,725 sq ft” loft #2NW had just sold in March 2013 at (only!) $811/ft in a sale I hit in my April 12, 2013, 400 shoes that used to live in 12 East 12 Street loft need a new home, carry big profit (the second time I blogged about the same loft and the same shoes [see my November 7, 2010, another loft in New York Times, another inexpensive renovation, with 400 shoes]), and the seemingly comparable “2,790 sq ft” loft #12SW had sold in December 2012 at $1,252/ft. I can easily see ignoring the #2NW sale as not comparable to #3S because of size. The #12SW sale is more difficult to apply for many reasons.

First, it is clearly not anywhere near “2,790 sq ft”, as StreetEasy has it. Even with the disclaimer about floor plan measurements (blah, blah, blah), you can’t get near even 2,000 living feet from this plan:

with max length about 45 ft + max width about 32 ft, that’s less than 1,500 before counting the circle upstairs

(I wonder if StreetEasy counted the 12th floor interior and the essentially identical-in-size roof level; that could be 2,790 sq ft, in fact, even though no one includes exterior space in that manner. Arggghhhh) And then there’s that roof terrace to adjust for, once you got confident about the interior size. Not to mention (he said, mentioning) the “stunning” views and light from the top floor of the building, including from the skylights, or the finishes (“meticulously designed” doesn’t necessarily mean a no-detail-spared renovation, but #12SW does look pretty sweet), or the fact that the stairway kills space. For fun, we could call the adjusted size about 2,100 sq ft (valuing the terrace at 50% of the interior), yielding an implied adjusted value for #12SW of about $1,664/ft.

Nope, this December 2012 sale would have been a difficult comp to apply to #3S when the sellers brought it to market five months later. Still, $2091/ft in May 2013 was many dollars off. As was $2,054/ft in September 2013. And $1,900/ft in November 2013 (and for another six months).

The right asking price in November 2014, however, was so clearly right that the loft closed for that $1,816/ft when it sold last month.

playing with numbers is fun, when the numbers represent the dollars of others

To bring this to a close, let’s see what the #12SW sale from December 2012 at an adjusted $1,664/ft looks like in March 2015 terms, using (of course) the StreetEasy Manhattan Condo Index as a single number proxy for the overall Manhattan residential real estate market. The Index is up 27%, suggesting that a ballpark adjusted value for #12SW when #3S sold was about $2,100/ft (if, and this is a huge ‘if’, my guesses about size were correct). That strikes me as a too-large premium for the interior of #12SW, with its better light but (likely) no better condition, even with me ignoring the third floor balcony. Bump the value of the #12SW terrace to par with the interior, and we get down to $1,252/ft in December 2012, and $1,590/ft as of the #3S sale … oops, too low. But an adjustment based on the roof terrace being worth 75% of the interior gets #12SW to $1,458/ft (then) and $1,852/ft (now).

On the one hand, ball parking #12SW now at $1,852/ft compared to the in-real-life observed $1,816/ft for #3S seems very close to perfect. On the other hand, backwards reasoning like this looks like playing more with a shoehorn than with reason. But we are just playing here. Unlike the real world sellers and agents for #3S, who were dealing with hard dollars.

Did I mention (recently) that comping is hard?

If only they’d have known in May 2013 that The Market would value #3S as worth not-quite what #12SW was worth, with the exterior of #12SW being worth 75% of the interior…. (Just kidding: comping is hard enough in retrospect, and even more difficult in real time.)

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2013 buyer of damaged Tribeca loft gains $500,000 by demolishing it

nobody sets out to do this (right?)

Granted, outsiders to Manhattan loft sales never know why sellers or buyers do the things they do, but I will bet you a quarter the woman who just sold the “2,973 sq ft” northwest Tribeca loft #1A at 79 Laight Street (the United States Sugar Warehouse) did not intend to sell it as raw space when she bought it almost two years ago. Almost certainly, she bought it when it “need[ed] a gut renovation” to actually do that renovation, and reap the benefits as a residence, or as a fix-and-flip. Instead, what she did was more like a sit-and-flip; fortunately for her, at a $500,000 premium to what she’d paid (up 27.8%). There’s no magic in this, as the gain is right in line with the overall Manhattan residential market as represented by the StreetEasy Manhattan Condo Index (up 27.1%); it’s just odd.

After all, for the 22 months between her purchase (May 15, 2013 at $1.8mm) and sale (March 30, 2015 at $2.3mm) she had her money tied up (no way could she get a residential mortgage on an uninhabitable loft), and added whatever it took to demolish an already damaged-by-storm loft. She just never got around to rebuilding.

You hardly ever see a listing photo of a downtown Manhattan loft like this, let alone one in a prime Tribeca condo loft:

putting the R (and the A, and the W) in raw

There’s no ‘before’ photo from the 2013 marketing, alas:

Please note: All pics are virtually staged.
The apartment was damaged by the hurricane and needs a full gut renovation.

(I trust that “damaged by the hurricane” is different from “demolished, after damaged by the tropical storm”.)

sound familiar? (are you a regular reader of Manhattan Loft Guy?)

If you were reading the blog when loft #1A sold in that damaged condition, you may remember that I walked through the real timing tragedy for that prior owner: she over-priced long enough to still be the owner when the storm hit, and trashed the place. In my June 18, 2013, when bad things ($605/ft!) happen to nice lofts, super storm edition at 79 Laight Street, I tabled the history and noted this distinction:

What happened to the loft (and to all flooded areas) when the storm hit was a tragedy of the Act of God variety; what happened before then was a miscalculation of The Market of the most human variety. They had 10 months to make a deal at whatever The Market would offer; instead, they asked a series of unavailable prices.

Having gotten flooded, I contrasted the #1A seller’s decision to sell as a fix-me loft with the next door loft seller, who sold loft #1B with the promise (“guarantee”!) of a renovation to a buyer’s specifications. I guessed in that post that the #1B seller spent less than the $500/ft difference between the essentially simultaneous sales of #1B (with that promise) at $1,105/ft and #1A at $605/ft needing that gut renovation.

As noted up top, the #1A history of May 2013 at $1.8mm and March 2015 at $2.3mm is very very close to the gain you’d expect to see based on the single-number proxy for the overall Manhattan residential real estate sales market that is the StreetEasy Manhattan Condo Index. By that same measure, #1B would now be worth about $3.1mm, however ($1,411/ft), compared to the $773/ft that the larger #1A just sold for.

In other words, the spread has gotten about $273/ft larger between these two neighboring lofts, though the costs of renovation have likely not increased to any significant degree.

more hints of dollar difficulties for the #1A seller, half million bucks aside

As I noted at the start of this post, the woman who was the loft #1A 2013-buyer-turned-2015-seller-without-renovating had to have planned to renovate, either for her to enjoy this large loft in a premium northwest Tribeca condominium or to flip at a profit. In retrospect, it seems clear that she could have flipped at a profit, even after renovating. But there are other hints that she ran into unexpected financial difficulties.

Those of you who can access some data on Property Shark will see that there were two lis pendens filed against the loft (but no mortgage); my subscription does not include details on lis pendens, so I have no idea who filed them, when, or in what amounts. Doesn’t really matter, as they definitely point to unexpected financial difficulties.

I can only hope that there was enough left from the $2.3mm proceeds of sale to cover those two lis pendens. Might be tough, though, as her round trip transaction costs included these ballparked big ticket expenses, each taking a bite out of the notional $500,000 gain:

$18,000 (‘mansion tax’ on purchase)
$11,000 (estimated title, on purchase)
$115,000 (sales fee, if 5%)
$42,000 (New York State and New York City transfer taxes, on sale)
$50,000 (22 months of $1,508/mo common charges and $744/mo real estate taxes)

$236,000

So maybe she got out with a few dollars. Sad situation, no doubt. Perfectly consistent with that sad listing photo of a (formerly and to-be-again) deluxe loft in a prime Tribeca condo.

 

 

 

 

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calendar + renovation = 100% increase for 22 West 26 Street loft

5 years helps a Manhattan loft, but not as much as this renovation, however

I did a half-off loft this week (March 31, half-off finally sells 620 Broadway artist loft with (obviously) some issues), so it is a bit of karmic payback to hit a loft that doubled in value. The “1,910 sq ft” 2-bedroom + 2 bath duplex loft #7H at 22 West 26 Street was sold on February 27 at $2.59mm by the guy who bought it on February 2, 2010 for $1.215mm. Precise readers will note that is a gain of 113% in 61 months. You already know there was an intervening renovation and you want to know what the StreetEasy Manhattan Condo Index suggests was the change in the overall Manhattan residential market in that time: 36%. So the calendar (which implies a current value in 2010 condition of about $1.647mm) was a much smaller factor in the current value than the renovation.

As usual, I lack actual facts about the renovation budget; as usual, that won’t prevent me from making things up ball parking some renovation estimates to get an idea of how much value was created by (more or less) how many renovation dollars.

it ain’t cheap to move a kitchen, even if only ten feet

The listing has no floor plan, but I am very familiar with this loft so I have a good idea of where the work was done between 2010 and 2015. Here is what the recent seller started with:

count the windows on the upper level, please (there will be a quiz)

Back in the day, this was a rather large One Bed Wonder (i.e., a loft optimized for everyone to sleep in one room, as tagged here and here) with a full bath downstairs and a powder room upstairs, with the only obvious place to add a second bedroom being in the southeast corner of the upper level. If you did that, however, you’d ruin the volume upstairs by stealing half the south windows for that second bedroom.

The main current  listing photo shows that’s not what the recent seller did to add a second bedroom (and it shows what a bad idea that would have been):

still 4 large south windows in the living room, right?

The riddle is solved by the (new) kitchen photo:

2 kitchen windows (how many did there used to be?)

The old kitchen was gutted and turned into a (dark, unless they punched a new window) “bedroom”, with the new kitchen on the new wall, about ten feet further south than in 2010. The kitchen array hardly changed, with the gas in the new island and the sink and electric appliances on the new back wall of the kitchen, but it now captures the northernmost west windows on the upper level. Voila!

Truly a new kitchen. The loft was “completely renovated with great attention to detail”, but (with one exception) it doesn’t seem as though there was much other movement. The downstairs full bath has been upgraded (“a gorgeous, large, marble master bath with double sinks and separate tub and shower stall”) and expanded (separate tub and shower), but the real trick was expanding the upstairs powder room into a full bath. I’m told that they cheated acquired a few more feet from the hallway, as there was simply no room in the old floor plan for a full bath there.

Let’s fearlessly ballpark the new relocated kitchen, the upgraded master bath downstairs, and the expanded former powder room upstairs at $250,000, which should be generous for work that has no custom babbling. Another $200,000 for miscellaneous (floor refinishing, the drop ceiling that accommodates high-hat lighting, and …?), with no need to play with the existing 2-zone central air.

While this was a “complete” renovation, it wasn’t a gut. My ballparked $450,000 budget comes to $236/ft, which may strike some as stingy. Bump that to $300/ft and we’re still under $600,000. Now compare that cost to the Index-based increased value from 2010 to 2015: $947,000. On these (reasonable) assumptions, the recent seller created more than $1.58 in value for every $1 in that (ballparked) renovation budget. (My guess is much more, still.)

Nicely played, sir; nicely played. But that wasn’t his best trick, methinks.

Buy Low, Sell High is easier to say than to do

On the original assumptions, the renovation accounted for about $943,000 of the difference in value from 2010 to 2015, with the mere passage of time (as measured by the StreetEasy Index) accounting for (only) about $347,000. Of that renovation premium, more than $343,000 was extra, in the sense of beyond what the seller (likely) paid for the renovation work. In any comparison of Then and Now values, we can never know for a given loft why the observed difference that beats the Index does so. Perhaps, as these ballpark numbers suggest, it was because the renovation was a huge hit (in this case, taking a 1+1.5 loft to a 2+2 loft). Or, perhaps one side of the roundtrip transaction was a market outlier.

I mention this because the recent seller bought in 2010 at $1.215mm, or $636/ft. By February 2010 the overall Manhattan residential real estate market was well into the thaw that followed the nuclear winter that followed the Lehman bankruptcy and ensuing credit crisis in September 2008. I have to wonder if the key factor in the seller’s happy math was the $1.215mm at which he started.

The loft severely underperformed the selling team’s expectations at $1.215mm:

Feb 27, 2009   new to market $1.895mm
Mar 16 $1.75mm
April 9 $1.595mm
June 16 $1.499mm
July 1 change firms (not agents)
Oct 3 $1.449mm
Nov 4 contract
Feb 2, 2010 sold $1.215mm

This history is a textbook illustration of the painful phenomenon known as Chasing The Market Down. February 2009 was a horrible time to be a seller, and this seller was clearly at the wrong price at the wrong time. Not just once, but five times, over nine months. When, as mentioned, the overall market was beginning to recover.

So my theory is that the recent seller at $2.59mm benefitted from a below-market purchase in 2010. I understand that the concept of “below market” is facially improbable, if not impossible: every public sale of a loft that has been professionally exposed to The Market is a market sale. But this one looks to me as though it got punished, first for coming out at the wrong time, then for serially picking too-high prices, then for simply being too long on the market and a target for further discounts.

we’ve been here before, but you’d never know it

As I mentioned, I know this loft well. Over the ten years that I was president of the coop board in this building we held many board meetings in this loft. So I knew the 2010 seller well, as well. When I saw this recent sale, I went looking in the Manhattan Loft Guy archives for the first time I blogged about this loft. I was certain I had blogged about it, but couldn’t find it in any search based on the address. That’s pretty frustrating!

It took me a while, and some serious head scratching to find my March 25, 2009, am I a coward? assessing + bearing risk in a risky world. You won’t find an address in that post, but that’s the post I’ve been thinking about. That’s a fun post, written in real time about a dynamic market. Bear with me, and read this paragraph (at least):

I noticed a Manhattan loft recently to market that (a) is a pretty spectacular loft, (b) in a building I am pretty familiar with, (c) in which there is a fairly timely and extensive set of market inputs (i.e., closed sales), (d) that is offered through a very experienced and professional agent, and (e) that is priced well above where I think The Market for that building is in March 2009. I then noticed two other lofts in buildings I am well familiar with, also with fairly timely and extensive sales history, also offered through experienced and professional agents. Yes, also priced well above where I think The Market is today.

Loft #7H in March 2009 was one of those “two other lofts in buildings I am well familiar with, also with fairly timely and extensive sales history, also offered through experienced and professional agents. Yes, also priced well above where I think The Market is today.” (Since I stopped writing about then-current listings in April 2008, this post did not identify the listings I was talking about on March 25, 2009, but [trust me], #7H was one of the referents.)

I knew this coop very well, there was timely and extensive sales history in the building, and #7H was offered by professional and experienced agents (who knew the building as well as I did, in fact). For whatever reason they agreed on that price, the loft then struck me as “priced well above where I think The Market is today”. The thrust of that March 25, 2009 post was that (in the three specific instances I had in mind at that time) I hoped the seller was fully aware of the risks of being over-pried in that particular market.

I may sprain my elbow reaching behind my back, but here’s a key from that post from Nuclear Winter:

To be even more pedantic about it, the law of supply and demand requires that some of these lofts priced above The Market will never sell — not just that they will sell for fewer dollars. The ones that are over-priced today may be nimble enough to catch up to the active market, but they will be competing with an increasing number of new-to-market lofts. Some will simply never catch up.

Again, I assume that the sellers mentioned here have discussed all this with their experienced and professional agents and that the sellers have decided to run the risk that their unique lofts will do better than The Market would indicate generally, because their lofts are better than the general lofts. But if these sellers really want to sell, I assume that they have a plan in mind to adjust their prices if (when) they learn that The Market disagrees.

One more time: “The ones that are over-priced today may be nimble enough to catch up to the active market, but they will be competing with an increasing number of new-to-market lofts.” Look again at the full #7H listing preceding the recent seller’s purchase in February 2010. I wrote that more than six months before #7H finally found a contract, after the first of four price drops, when #7H was still asking 44% more than The Market would eventually yield.

As I said, I suspect that the recent seller did so well on his buy-and-sell, in part, because he bought really low. Now you know why I think that.

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side window in 9 West 20 Street loft allows huge master

funny what a little flexibility can do for a classic Manhattan loft footprint

Are you more a flood plan guy, or are you a numbers gal? If the former, you’ll appreciate how a side window in a Long-and-Narrow loft in Flatiron sets up selfish owners for a master that spans the back wall; if the latter, you’ll be startled by the spread between the recent sale of the “2,154 sq ft” Manhattan loft on the 11th floor of 9 West 20 Street and the price these recent sellers paid to buy it in February 2008 (during the quarter formerly known as The Peak). Let’s start with the floor plan, since that’s what I noticed first (StreetEasy doesn’t make it as easy to find the prior sale as it should be, alas).

In a classic floor plan on a Long-and-Narrow footprint, this master would be split into two bedrooms on the back wall:

some people would have made this a 3 BR, but not the last two owners

Funny thing is, the recent sellers don’t seem to have done much to use all that space:

is this staged, or did those folks live this way?

My guess is these folks sold because they didn’t want to give up even under-utilized space in the master, as the second bedroom photo suggests they do need another room:

it’s not the bunny that makes this room a little crowded

I’d love to see a photo of the dressing area, as any 3-bedroom solution to this space would likely reconfigure the rear third of the loft by gutting the closets and dressing area. I wonder if the sellers figured that it would take too much away from the loft to do that….

how many changes since the loft was purchased in 2008?

The broker babble is enthusiastic and moderately specific about the finishes in the loft:

renovated kitchen offers the best appliances including refrigerator and wine refrigerator by Subzero, a professional 4 burner Thermador range with vented hood, Bosch dishwasher, garbage disposal and custom backsplash. Stone countertops, a large island with great storage…. The master suite offers complete privacy with a spacious dressing room that has two walls of closets and a five-fixture windowed bath. …, custom built-ins …. The second bedroom also has a fully-outfitted closet …. newly-renovated windowed second bath. … central air, large-capacity washer and vented dryer, beautiful hardwood floors, ample storage including a huge utility closet and a private floor.

(I wonder what “and a private floor” was really supposed to say.)

As mentioned up top, the loft last sold in February 2008 rather lower than the $3.675mm sale on March 16. (I ranted Tuesday about the difficulty in matching a Noho listing and deed record, making a more general point about  “when a deed record and listing disagree about whether a given loft is, for example, “#5″ or “5th”[, such s]tupid stuff … can confuse StreetEasy.” Here, the listing is “#11fl” and the deed record “#11”; I hate when that happens.)

The loft in 2008 was pretty nice, with unfortunately vague babbling:

Stylish and professionally designed with many special additions. … The expansive master suite has a wall of windows, many custom closets and a sumptuous bath. High ceilings, plank-wood flooring, central air conditioning, washer/dryer, interior storage room, individual basement storage unit and a security system ….

StreetEasy’s got only a single out-of-focus listing photo from 2008, but that floor plan is identical to the current floor plan except that it showed no kitchen island in 2008. But we have a 2008 kitchen photo in our listing system, with an island and (seemingly) the same (“best”) appliances:

same range, oven + hood, probably the same frig, but the new kitchen has totally new ‘skin’

It seems the 2008-buyers-turned-2015-sellers took a perfectly fine kitchen and changed the cabinet fronts, counters and backsplash, and reconfigured the existing island. (In addition to painting the walls from yellow to white.) No matter what they spent, no rational market would add value on a dollar-for-dollar basis for such changes. Similarly, the “newly renovated” second bath has the same footprint and configuration as the former one; no rational market would pay a dollar-for-dollar renovation premium for that (un-pictured) ‘improvement’. (The “five-fixture windowed [master] bath” is conspicuously not babbled in 2015 as renovated.)

If we can just play with numbers here a bit, let’s ballpark the renovated second bath, paint job, and cosmetic changes in the kitchen at $100,000, and even give them full credit for those dollars. That feels quite reasonable if not generous, and is a lovely round number to permit further ball parking.

The February 2008 value then adjusts to $2.85mm. Long-time readers of Manhattan Loft Guy know that I typically initial cap that calendar quarter as The Peak, in recognition of the fact that The Miller found then (to date) the highest recorded median prices for Manhattan residential real estate. The StreetEasy Condo Index is monthly and uses different methodology so it is no surprise that their peak (to date!) was slightly earlier, in October 2007 (we’re talking about a difference from October 2007 to February 2014 of less than 1% even on StreetEasy, so let’s not quibble).

Generously adjusting the 11th floor at $2.85mm in February 2008, the loft just resold at a 29% premium to the Quarter Formerly Called The Peak. The StreetEasy Index is up 13% over that same time. Yikes. Nicely played, sellers; nicely played.

 

 

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