half-off finally sells 620 Broadway artist loft with (obviously) some issues

by Sandy MattinglyPosted on Posted in loft neighborhoods noho — No Comments ↓
how selling a Manhattan loft can be like your worst experience pulling off a band-aid

I’m going to lead the way you should pull off a band-aid, quickly (brutally, even): contrary to what you’ll read on StreetEasy, the very quirky duplexed ground floor artist loft on the 1st floor at 620 Broadway that sold for $2.425mm on March 12 started its (true) listing life on July 3 last year asking $4.895mm. No matter how quickly you pull, a lot of skin is going to come off in an experience like that. That’s 49.54% off the original asking price for you overly precise folks, “half off” for the rest of us. I’m not even going to look at my Master List of downtown Manhattan loft sales before saying that no loft has sold in a long time that started asking double what the market would pay.

Here’s the actual listing history taken from the inter-firm data-base:

July 3, 2014 new to market $4.895mm
Aug 13 $4.195mm
Sept 17 $3.55mm
Oct 7 $2.999mm
Oct 22 $2.8mm
Jan 24, 2015* contract
Mar 12 sold $2.425mm

(*It’s possible that the StreetEasy contract date of December 29 is correct; the StreetEasy feed is clearly missing the first date [it starts with “Price decreased by 14%”] and it has that peculiar December price increase, which couldn’t possibly have happened in real life.)

Wrong though they were, the sellers were aggressive about finding the market. You don’t often see a $700,000 drop in six weeks, let alone one followed by a $600,000 drop in another five weeks, and I’m going to simply assert that you never then see a $500,000 drop within three weeks. Or, as StreetEasy shows you the math, drops of 14%, 15% and 16% in three months. Again, I’m simply going to assert that in any prior cases of huge price cuts needed to find a clearing price, sellers tend to take much longer to make the necessary adjustments.

From a spectator’s perspective (Manhattan residential real estate can be a brutal sport to watch) that’s breathtaking. From a seller’s perspective?? There are no words.

did I mention there are ‘issues’?

The broker babble includes a great deal of lemonade, with the loft described as “dramatic”, “[s]uperbly positioned”, a “perfectly preserved artists’ live/work loft” with “many great features and possibilities”, “soaring 15 ft ceilings, incredible wall space for displaying artwork, and hardwood floors”, a floor plan that “was thoughtfully conceived”, “ample light but also privacy and quiet enjoyment”, plus “an abundance of storage space and … a multitude of uses”. All this is true enough, as is all good babbling, but let’s start with the floor plan:

the middle is the main (ground floor) space, with the gallery + “bedroom” downstairs on the left, and the paired mezzanines (with their “abundance of uses”) on the right

It’s an unusual floor plan, with the three levels and cut-aways (“open to above” or “open to below”). The view from the west end of the ground floor level gives the best sense of how the space flows:

you’re standing in the mezzanine above the entrance, looking over the kitchen and LR (15 foot ceilings!) toward the wall of glass bricks facing quiet and private Crosby Street, some 75 ft away

(It took me a few glances to recognize that white box just off the corner of the kitchen as the spiral stairway down to the gallery, one of three spirals from the ground floor.)

From this vantage point, you are looking toward the light, in the sense of “the” light, as in the only light. In other words, there are no windows, but

a wall of glass bricks … runs seamlessly through both floors as well as the mezzanine level allowing for ample light but also privacy and quiet enjoyment.

That’s a pretty important wall of glass, isn’t it? You’ll never have a sense of the outside world from this loft, other than knowing whether it is dark outside, or light. That’s rather … challenging.

what’s with all the sleeping with tubs from back in the day??

There’s a hint in the floor plan that the huge master suite is for more than sleeping, which is confirmed in this photo:

watch your partner bathe!

Since this is a “perfectly preserved artists’ live/work loft”, I assume that rather large jacuzzi at the foot of the bed dates from the 1980s, at least. Presumably, this entire loft will be gutted, including the mezzanines, and the lines redrawn where the new owners want them. They are not likely to leave a combined bedroom plus bathing room, but they do have that option. Since there’s no making lemonade in the babble about the plumbing finishes, the implication is that kitchen and baths are all rather … (how to put this delicately?) … dated. But we know that there are at least two sets of plumbing stacks to work with, that front one by the entry on the main floor (which doesn’t look bad in a listing photo) and this one down below grade where the master bath is split into that open jacuzzi and a private room for sink and toilet, backing up on a sink accessed from the art gallery.

This bed + bath set up is reminiscent of the more sleek one (which is likely to be preserved in some manner by new owners) that I hit in my March 15, how much did the bathtub cost this Chelsea loft at 151 West 28 Street?. Like this Noho loft, that Flower District loft was optimized for an individual or couple, with a single sleep area that lacked windows but was open to the bathtub. And also probably dating from the 1980s. Like that Noho bathing experience, anyone using the Noho bathtub would know that the sounds of the bath would filter through the entire loft.

 an artist’s loft for display rather than creation turns into house money

The babble sent me to The Google to learn about the “world renowned New York artist” who lived here. She made large metal sculptures over a great many years, but there’s no evidence that she made them in this loft. The lower level of the loft was her sleeping (and bathing!) area, shared with the art gallery evident in this photo:

a well lighted gallery, but by Con Ed, with no sign of manufacturing or creation space or equipment

 

The deed record indicates that the formal seller was the deceased artist’s estate, represented by her son (and daughter-in-law?). I wonder how many beneficiaries there were, and whether the executors felt pressured by others. Remember: they got $2.425mm for a loft that was brought to market at twice that price. And that immediate sequence of major price drops is certainly consistent with somebody saying to someone else “we tried your [ridiculous] price and it didn’t work, so let’s drop and drop until we hit a buyer zone.” Or so I can easily imagine.

No idea whether this loft was a major piece of the estate’s value, of course, but an estate sale is often a situation of playing with house money. Beneficiaries can be tempted by visions of zeroes dancing through their heads, but the longer the property is over-priced the longer it will take for them to put cash in their pockets. In this case, they asked a series of dramatically too-high prices, but only took six or seven months to get into contract. So they didn’t waste a lot of time proving how wrong that original price was.

only for data integrity nerds…

Careful users of StreetEasy will have noted that the listing is for loft “#1F” and the deed record for “#1R”, and that StreetEasy does not match them up. There’s no doubt that they are one and the same loft, and little doubt that the loft is in the Rear of 620 Broadway rather than the Front. And I am pretty sure that the main level is at ground level  with the lower level below grade (on the west side of the building at least). I was worried that floor “1” might be a European first floor, but now I’m not. Bear with me for my explanation, or go on with your life.

First, the babble tells us that the glass brick wall at the east end of the loft is at Crosby Street, while the building photo on StreetEasy shows a retail store on the Broadway (front) end of the building; Property Shark and StreetEasy agree this is a 6-story building, with residential lofts on each floor “1” through “6”, and The Shark has the critical datum that the building is much longer than this artist loft, at 187 feet. So, I’d bet my standard quarter that one enters the “main level” of this loft by walking a long way from the Broadway sidewalk residential entrance past the David Z store, with the lower level … below (d’oh). (Note to self: check to see if Crosby Street is downhill enough from Broadway for this 187 foot building to have a two-level glass wall on the east [Crosby] end with light extending all the way to the bottom. That wall of glass should be pretty obvious from Crosby Street.)

Anyway, I have no idea why this loft would ever be called “#1F”, but that surely (a) is wrong, if “F” means the conventional “front”, and (b) confuses StreetEasy. I hate when that happens. And that confusion happens all too often with residential Manhattan lofts, usually when a deed record and listing disagree about whether a given loft is, for example, “#5” or “5th”. Stupid stuff like that can confuse StreetEasy.

I hate stupid stuff, especially needlessly stupid stuff. End of rant. Resume normal activity….

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were feet in larger loft at 105 East 16 Street worth more than in smaller loft?

by Sandy MattinglyPosted on Posted in lofts in other neighborhoods — No Comments ↓
Conventional Wisdom about Manhattan residential real estate is right, often

I don’t know if the equation “1 + 1 = 2.5” is original to The Miller, but he is my source for it. What he means is that in the current residential real estate market in Manhattan (and for some time past) a square foot in a larger space is worth more than a square foot in a smaller space because it is in a larger space. The fun application of this CW is that the same square foot in a smaller space becomes more valuable by being combined into a larger space. As if by wizardry! Skeptic that I am, I like to test CW (even if from The Miller), as in my September 10, 2011, deconstructing NY Times article about combining apartments to increase value, and soon thereafter in my November 11, 2011, did 30 West 15 Street lofts sell at premium due to combination potential? (hint: no premium found for a combination purchase). With the assumptions and guessing stated below, it appears that the sale on January 22 of the “4,000 sq ft” Manhattan loft on the 5th floor at 105 East 16 Street for $5.125mm is, at best, a mild example of this CW, in this case establishing suggesting that 1 + 1 = 2.11.

Let’s look at the 5th floor loft, then do the math.

not everyone would break up a “4,000 sq ft” loft like this

The loft takes up the entire 5th floor and has only three bedrooms and 2.5 baths. (“Only” only make sense when you consider it is said to be 4,000 sq ft.) I understand the logic of the layout (the master suite is as far from the purple princess bedroom and the lair of the twin superheroes as it could possibly be); and I understand the allocation of extravagant space to the masters of the loft: a sitting room bigger than your bedroom, a large master bedroom proper, a master bath bigger than the two baths in your home, and a study off that sitting room. There’s room for a media room and an “entertainment area” (4th bedroom candidate, for sure), but — for such a massive space — a surprising lack of volume, if the photos accurately represent the space. Likely, it’s the choice to leave only three of the “17 large windows” for the living room.

every room is over-sized, except for the living room (interesting choice, that)

With 12 foot ceilings, maybe this looks bigger in real life:

you wouldn’t guess this was the living room of  a “4,000 sq ft” loft

The great room (really, the remainder of the space after the corner rooms and kitchen are taken out) is 16 feet wide, but is pinched by the passenger and freight elevator access points, with a dining table to one side and piano and seating in front of the windows.

The kitchen gets some quality broker babbling, but I wonder about its appeal for loft lovers, being more country house than industrial:

suburban, maybe, or country; not especiallly loft-y (huge, certainly)

The baths get no photos, so I wonder how dated they are, with that jacuzzi.

The loft sold for $1,281/ft, which obviously disappointed the sellers:

June 20, 2014 new to market $5.95mm
Sept 8 $5.495mm
Nov 17 $5.25mm
Dec 1 contract
Jan 22, 2015 sold $5.125mm

That’s only 14% off the first ask, but at this level that’s $825,000. And nearly six months to contract, when these sellers were probably reading about $5mm sales left and right. And remember: $1,281/ft. That’s a below median price per foot for lofts sold in 2015 and recorded on my Master List of downtown loft sales (based on a quick count). hard to find room in that price for a premium for anything, large size included.

downstairs, irony abounds

The folks who sold the “1,850 sq ft” loft #3N weren’t wrong to describe their master suite as “oversized”, it’s just that in comparison to the 5th floor … well, comparisons are unfair. This smaller loft has a more loft-y kitchen and a floor plan optimized as a One Bed Wonder, but it can be tinkered with to create nearly the utility of the 5th floor (well, 3 bedrooms, 2 baths, if not “4,000 sq ft” with an entertainment room and media room and …).

clean, modern … loft-y kitchen

seems silly to add those walls north of the kitchen / master wall, but here is the proposal for a 3BR (2BR + dark guest room)

The finishes get a similar level of babbling as with the 5th floor, with a bit of specific bragging about the bathrooms, so I’d guess the two lofts are in similar condition. If so, the only adjustment needed to comp A Big Loft at 105 East 16 Street against A Small (well, moderate) Loft is time, which is easy enough (in theory, of course). In theory, we can start with the observed #3N value in August 2013 of $1,005/ft, then add the 15% by which the StreetEasy Manhattan Condo Index is up by the time the 5th floor sold. That adjusted $1,157/ft is disappointing to fans of 1 + 1 = 2.5.

With the small loft (adjusted) at $1,157/ft and the huge loft at an observed $1,281/ft, there’s either a problem with the comp analysis or the Conventional Wisdom wasn’t quite conventional enough to apply here. (It’s quite possible the ball parking involved in comping these two lofts, sight unseen, by extrapolating from the StreetEasy Index, is too rough.) But the result is more like 1 + 1 = 2.11 than 1 + 1 = 2.5.

To be fair, what The Miller said in the New York Times piece from September 2011 was not exactly an arithmetic fact of 1 + 1 = 2.5; instead, he said

it’s not uncommon to see a 20 percent premium on a price-per-square-foot basis

In italics, sometimes (not usually, or often), and (in those some times) as much as 20% above the price-per-square-foot value of “1” alone. Sometimes you get your 1 + 1 = 2.5, sometimes you get a ‘premium’ that could as well be a function of market noise on one or both sides of a pair of comps.

To repeat myself from 2011: I don’t doubt that there are examples of 1 + 1 = 2.5, it’s just that I can’t say I’ve ever actually seen one. And the reason I don’t doubt that there are such rare beauties out there is that the market logic is unassailable: there are (still!) relatively few 3+ bedroom spaces for sale, so huge spaces can be bid up by a supply-demand imbalance. I’ll keep looking….

lifting the kimono on the Media Division of the Manhattan Real Estate Industrial Complex can be disappointing

I’m glad I looked back at my September 10, 2011 post, as it brought back this rumination about why articles such as the NY Times piece featured tend to talk about General Principles using currently available for-sale listings (suffering from the problem of being not-yet-established as market values, as well as from the problem of the sources tending to be people trying to sell these things), instead of, well, actual data points of closed sales.

Bear with me for this long self-quote, as valid now as it was then:

But my basic response to the article started with “sheesh … that’s not very helpful without real past examples”, which led to “why aren’t there real past examples”, which morphed into “no one with the data is motivated to find real past examples”, as the role of the New York Times in the Real Estate Industrial Complex came into focus for me. (Again, this may be obvious to serious fans of Manhattan real estate, but it did not coalesce for me in this way until today.)

Vivian Toy (or any other reporter) does not know where the real life examples are, but maybe she could find some with a great deal of effort. The developers and sales agents for new developments know, but that is not what they really want to talk about. The sales agents with one-off combo listings might or might not know, but that is not what they really want to talk about.

So, in exchange for getting good quotes about the general topic from people who know (or might know), Toy let’s them talk about what they really want to talk about: the currently available listings that offer the potential to combine units to make 2.5. Would it have been rude for her to ask about past examples, to see if the “somewhat mystifying” math can actually be observed in the real world, even if the professionals are principally interested in selling their inventory and only secondarily (if at all) interested in educating the populace? You know, as in a more even exchange of back-scratching than Toy played.

Feel free to apply this test for any article you see about Manhattan real estate principles: the examples tend to be currently offered for sale (with no established market value) and the speakers tend to be people with stuff to sell (and The Miller, then as always the go-to guy for a balanced and informed view).

Look for the Trends & Data section of the StreetEasy blog to try to break this pattern by offering Big Data. I especially liked their use in a March 10 post of past sales data and contract dates to address market seasonality and key-words for brokers to babble.

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nine years ago today … Manhattan Loft Guy post #1

by Sandy MattinglyPosted on Posted in internet and blogosphere — 1 Comment ↓
how many ‘years’ is that in Internet time?

(Can’t say that I miss Lorne Green often, but this question prompts one of those times.)

Quick post without any downtown Manhattan lofts to discuss (directly). It was March 19, 2006 that I clicked “Send” on my first blog post, back when I was (still) editing a (never to be published) personal website. I kept tinkering, and my web design guy kept offering improvements in look and/or functionality, and … tempis, it fugited (as it is wont to do). I needed an outlet for some of the content I was writing about the then-current market, and happened upon ‘three amigos’ who offered a free blogging platform for real estate sales folks.

I’ve since platformed over to WordPress, but thank you, Internet Crusade. And thank you to any readers (especially to loyal readers!). It’s been swell. Some old posts got lost in the transition, but the Archives have 2,282 posts in nine years. This will be lucky #2,283.

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.

Here’s to nine more years!

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it’s only $15,000, but 449 Washington Street sales show the value of secrets to developers

by Sandy MattinglyPosted on Posted in loft neighborhoods tribeca — No Comments ↓
there’s a celebrity angle to this Tribeca loft story

I don’t usually talk about Manhattan loft sales in new development projects, but the recent publicity for the sale of a “1,665 sq ft” Manhattan loft denominated “Unit 3” at 449 Washington Street both caught my eye and provides a wonderful example of the way new development sales can distort the market (in this case, how the knowledge imbalance between developer and buyers can cost the buyers money, which developers see as a feature rather than a bug in the current Wild West system regarding new development sales information). As you will see in the linked deed record on StreetEasy, some cute family trust with a famous trustee paid $3,029,292 for that Unit 3, which made The Real Deal (first place I saw it), the New York Observer, the New York Daily News, City Realty’s worthwhile 6sqft blog, and (probably) every other news site that covers the celebrity real estate space.

Far be it from me to criticize anyone for talking about the celebrities that buy (or sell) Tribeca lofts (ahem), but the most interesting thing about the Zero Dark Thirty $3,029,292 purchase isn’t the buyer but the neighbor. The One Who Soft Pedals Torture has a new neighbor who paid $3,044,282 for the identical loft one floor below. In a (very hypothetical) world in which buyers and sellers have the same information, you would not expect the buyer of a higher floor loft to pay less than the buyer of a lower floor loft. In the present reality of Manhattan new residential development, that happens all the time. Let me explain how, and why.

a tawdry form of Golden Rule applies in Manhattan real estate

Cynics say ‘those who have the gold make the rules‘, and realists sigh. In this case, the rules have to do with reporting transaction information within the Real Estate Board of New York, and the fact that public information about sales is never ‘public’ until the deed is filed (i.e., when the developer decides to sell to buyers under contract). In many instances in which there are two or more units for sale in a building with one in contract but not yet closed, there are ways for an agent representing a buyer interested in a (still) active sale listing to get an idea of the contract price for the unit that has not yet sold. Agents often as a courtesy offer information of more or less specificity (“we got very close to the ask”, or “we’re above ask”, or “tell me what your bidder is bidding and maybe I will comment”), especially if the seller’s agent of the in-contract unit is from the same firm of the agent for the bidder on the other unit. (Sometimes this happens when buyer agents are for the same firm, but it is difficult to identify buyer agents, especially before they close.)

I know from our listing data base (449 Washington Street is a Corcoran listing) when the two loft deals were struck. The Unit 2 (asking $3mm) buyer made an offer that was accepted by May 22, signed a contract by June 2, and (finally) closed on February 5 at the $3,044,282 above. (People familiar with how prices on deeds are recorded [and that buyers of new developments typically pay the NYS and NYC transfer fees that the seller would otherwise pay] have already done the math and know that the contract price for Unit 2 must have been $2,989,720.) Unit 3 had a very similar history off an asking price of $3.1mm, with the celebrity buyer making an offer that was accepted four weeks earlier (April 24) that was in contract by May 16 (a week before the Unit 2 deal was negotiated) and that (finally) closed on February 6 at the $3,029,292 above. (Yes, that’s as though the contract price was $2,975,000, with the buyer picking up the 1.825% transfer fees [maybe there’s a two dollar rounding error somewhere].)

To review: the developer had been offering both lofts since June 2013, and found a buyer (and signed a contract) for the higher floor unit about a week before the bidder for the lower floor loft made a bid. The developer knew the contract price for the celebrity unit, but was under no obligation to advise the new bidder, there was no public record of the other contract, and it was unlikely that the buyer’s agent would find out the contract price on the other unit. As a result, the second buyer paid about $15,000 more than the first buyer, for a lower floor loft.

In a perfect world, that only happens if the second buyer knows but the developer won’t budge, and the second buyer pays ‘more’ anyway.

Granted, this is only about $15,000, and the time between the two deals was pretty short. But in a larger development, this can happen with buyers who negotiate in the dark months apart, since prices are only ‘public’ when deeds are filed, and closings are only scheduled when the developer is ready to close enough units to make scheduling a series of closings worthwhile. (Often, sellers will finish a floor enough to get a Certificate of Occupancy based on which units are in contract.) Imagine being the ‘second’ buyer who finds out (when everybody closes and moves in) that he paid significantly more than a buyer of a substantially identical unit, sometimes because they made their deals at very different times, and sometimes because one buyer simply drove a harder bargain than another. It happens, pretty much any time a developer is willing to negotiate about asking prices, or to make other concessions. (Throw in a storage unit, or pay attorneys’ fees, or do a ‘free’ upgrade of finishes or appliances.)

Tough luck, buddy.

the numbering system for condo units perplexes StreetEasy

I really hope that another wrinkle about new development sales that can make them hard to track is not a feature, but a bug. The celebrity loft was “Unit 3” and the other “Unit 2” (as above, from the deed records) and we know from the StreetEasy building page (Tab 2, Past Activity) that there were two units for sale that were no longer available last month. Trust me on this: it is clear from the Corcoran listing system that “Unit 3” is the the 4th Floor loft, and “Unit 2” is the 3rd Floor loft. I don’t know the reason a developer would do this, but am willing to assume that this developer did not do this in order to confuse me. (Or you.) As I said, a bug (I hope), not a feature. (Maybe the Commercial Unit 1 is a duplex below the third floor Unit 2?) But I do know how these things happen (or are permitted to happen).

Developers have to identify new condo units when they file the tax lots for each unit, and (I suspect) they can use whatever system they like. You will sometimes see a new development with letter units, “A”, “B”, etc, that no letter carrier would recognize once people move in. Or a system that uses a two-digit numbering system (“21”, “22”, etc) that (maddeningly) does not correspond to units on, say, the second floor. ACRIS (and StreetEasy) may never catch up with this. Click the All Activity option on the Past Activity tab for 40 Mercer Street to see an example of original sales associated with units with two digit number designations, and resales with a Number-Letter designation that any pizza delivery guy would need. You may have your own favorite examples.

Enough minutia about recording deeds and designating units. Go back to looking for celebrity loft purchases or sales. And let me know of any that are interesting for reasons other than the identity of the parties.

 

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how much did the bathtub cost this Chelsea loft at 151 West 28 Street?

by Sandy MattinglyPosted on Posted in loft neighborhoods chelsea — No Comments ↓
you know what they say about idiosyncratic design choices

The Flower District is hardly a fringe area for Manhattan lofts, so it is a little surprising to see an architect-designed loft with “sleek” kitchen and improvements such as central air sell for as little as $1,044/ft. But if you’d seen the “1,847 sq ft” Manhattan loft #3E at 151 West 28 Street (Groff Studios) in the 6 months it took to sell you’d have a pretty good idea why. Like me, you’d then suspect the relatively low value was driven by the soaking tub, with assistance from the water closets. Let’s start with the beauty, before looking at what made this a beast … er … problematic sale.

This is a lovely kitchen (sleek, even) with, as they say, “tons of storage”:

I’m loving the way the kitchen is enclosed on top (it looks better in real life … honest)

Not everyone likes concrete floors, but they can have a lot of character:

that’s a nicely proportioned great room, with a wall of windows in front, plus the nicely distressed floor

The master bath shows lovely finishes, a similar enclosure up top to the adjoining kitchen (with which it shares materials), with both a shower and that (tranquil!) soaking tub:

trick question: do you see what’s missing from the master bath?

So far, so lovely. To see the ‘issues’, we’ll zoom out to the footprint (a classic) and the floor plan (not so classic).

this would be a One Bed Wonder, if only it had a ‘bedroom’

Longtime Manhattan Loft Guy readers know that a One Bed Wonder is a relatively large loft optimized for a single bedroom in ways that make it awkward (and expensive) to adapt to add additional bedrooms. (A bunch of posts tagged ‘One Bed Wonder’ are here; my origin post is from nearly prehistoric times in blogging terms, February 24, 2007, what is a 1 bed wonder?.) The recent seller of loft #3E needed only a single sleep area, so she (and the renowned architect) took an unconventional approach to a classic Long-and-Narrow Manhattan loft footprint:

your basic rectangle, with windows only front and back, plumbing in the middle … yup, that’s a Long-and-Narrow

Keep that trick question about the master bath in mind when you see the proposed alternate floor plan, which is a much more conventional approach to the Long-and-Narrow loft footprint:

another trick question: do you see the new bold line (not for the BRs)?

The Alternate Configuration is a relatively low-cost way to solve the no-bedroom problem here. You’ve got two new bedrooms splitting the rear (windowed) wall, just like a thousand other Long-and-Narrow lofts. But the most interesting new bold line in this proposal is the one next to the soaking tub. In the present floor plan, the thin lines that surround the ‘bathroom’ are not there to indicate walls, but to mark the slightly raised platform on which those bathroom fixtures sit. (Trust me: I’ve seen it.) In real life, the thing that’s missing from the master bath (trick question #1) is a wall between the tub and the “bedroom”, and a wall between the tub and the hallway running along the closets on the west side of the loft, the way to get from the front to the back of the loft.

It’s a very nice soaking tub, and its visible to anyone in the rear half of the loft. Notice also how sound from the shower and tub area in the form in which the loft was designed will penetrate pretty much the entire loft. Do you see how the present configuration is optimized for a couple (even more so, an individual)?

That’s not to say that the most private uses of a bathroom are so … not private, as the loft has been built out. See those nubs in the middle of the long left (west) wall? Those are what I would guess the Brits would call Water Closets, though I’m frankly not sure what the Manhattan term is for a toilet in little room. Each of those little nubs has a sink, by the way, and one of them even has a (the world’s smallest?) shower. All together, the two little nubs and the mostly-open master bath provide two toilets, three sinks, one tub, and two showers, but the configuration is decidedly unconventional.

That makes this loft a value play for anyone for whom the current layout is ideal. Not sure how many such people there are, and I am very curious about whether the new owners ‘fix’ the floor plan. Unless there’s a plumbing stack toward the back wall, the footprint can’t support a true master (en suite) bedroom. You see many Long-and-Narrow Manhattan lofts that craft a true master (en suite) bedroom by stringing a walk-through closet along (in this case) the west wall, connecting the bedroom to the bathroom-in-the-middle-of-that-wall, but that won’t work here because of the size of that tub (and shower). If you close off the public west entrance to the rear (making it the entrance to the master), you’d have to get to the other bedroom and the ‘studio’ along the east wall between the kitchen (and shower) and the closets … which was optimized for storage more than for being an active passageway.

Why buy this loft if you are going to move around that central tub / shower / sink? Buy something else, as that kitchen plus tub rectangle, with the materials and dropped ceiling, is a major part of the current aesthetic.

Of course owners can adapt lofts to suit their own needs, and I applaud people who really do that. Just so long as they recognize that if what they’ve created is difficult (expensive) to render into a more conventional layout, they run the risk of suppressing the market value if they cannot find an aesthetic soul mate to buy the place down the road. The category of One Bed Wonders leads to headlines like this one from January 15, 2014 (which is kinda sorta applicable to today’s Chelsea loft): in a world unusual loft floor plans, this One Bed Wonder at 40 West 15 Street takes a cake. There’s probably a lot of cake to be eaten in this category.

 

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nice flip at 73 Worth Street, but why is a foundation doing that??

by Sandy MattinglyPosted on Posted in loft neighborhoods tribeca — 2 Comments ↓
there’s a wrong way to flip, and there’s this way

After picking on a guy with so much money that he didn’t really care if his aborted flip burned a barrel of cash or not (in my February 26, 155 Franklin Street loft sells in a reverse flip (viewer discretion is advised)), the sale six weeks ago for $4.6mm of the “2,565 sq ft” Manhattan loft #2B at 73 Worth Street near the government corner of Tribeca is refreshing. The seller paid only $3.6mm a year ago; unlike Hollywood Soderbergh, the March-2014-buyer-turned-January-2015-seller completed a renovation, though it seems unlikely to me that the seller intended this real estate adventure as a Buy, Fix & Flip. (Soderbergh didn’t either, most likely, but this seller should have been worried about money.) The key, as the many expenses associated with the Soderbergh Reverse Flip show, is to keep expenses down. For loft #2B, broker babbled as “a newly renovated loft space”, it doesn’t appear as though they spent enough on the renovation to drive them into a red ditch, so there should have been a nice profit.

The most interesting Before v. After view is of the kitchen:

note the way the counter is perpendicular to the long wall (there will be a quiz) [Luxe Group pic]

 Why do agents misuse compliment / complement?

Hardwood floors have been stained ash and lend an organic quality to the space and compliment the kitchen where double-hung cabinets with touch latch openers are abundant. The counter tops are all Calacatta marble.

Sub-zero frig, 6-burner Wolf range, Bosch DW. And to top it all off a 100 bottle Euro Cave wine cooler.

You might have legitimately complimented the earlier kitchen, though the old floor complemented the cabinetry differently:

the island used to run parallel to the long left wall; the overall feel was darker and heavier

The range, hood, Sub-Zero and sink look familiar to those who’ve skipped ahead to the recent listing photos:

who rips out a lovely kitchen if planning a flip?

Of course, taking a pretty wonderful dark kitchen and creating another pretty wonderful light kitchen is not the typical flipping plan, even if you keep the major appliances. Before:

The Chef’s Kitchen boasts a granite breakfast island anchored by a beautifully restored original cast-iron column, a full complement of state-of-the-art appliances and a large walk-in pantry.

I’ve toggled back and forth between Before and After photos, without finding another significant ‘renovation’ (cosmetics aside, including a new stain on the flooring), which is not surprising given that the building was finally finished only 9 years ago. Certainly, the master bath appears to be the same.

The kitchen and baths are “money rooms”. The recent seller paid the former owner for mint-y money rooms, then charged the recent buyer for a new kitchen that is different, if not more mint-y.

Did I mention this is odd behavior for someone intending to sell within a year?

the seller was not a professional flipper, or real estate speculator

The deed record identifies the seller as this foundation, apparently formed to do good in education and human services, with assets in 2013 of $22mm and a grant history of $457,750 in 2013. Nothing about Catholic agencies & churches, Higher education, Hospitals (general), Human services, Law school/education, Medical school/education, or Museums (art) implies buying, renovating, and selling high end Tribeca lofts to me.

Maybe they bought it as a residence for the executive director and that person’s plans changed. I am not saying there is anything wrong with that, but the foundation that made grants of less than half a million in 2013, looks as though it paid $3.6mm in cash for this loft in 2014 (Property Shark shows no mortgage).

Of course, it worked out well enough for the foundation, earning (say) $530,000 on the round trip, after a new kitchen and floor finish ($100,000?), mansion tax ($36,000) and title insurance (say $21,000) on the buy, and the big hits on the exit of the sales fee ($230,000) and transfer taxes to the state and city ($83,950). That leaves about a half million, on which I hope they may well pay taxes; if not, that’s about a 15% return in under 11 months. Kinda a high risk process, though.

 location, location, and … what’s the third one?

Anyone who knows where this building sits (StreetEasy’s got a map that helps you cheat) and sees this second floor floor plan on the southwest corner of the building, which is the northeast corner of Broadway [nope: Church, d’oh, see helpful reader with gentle correction in comments] and Worth, two heavily trafficked, heavily bused, heavily trucked thoroughfares, will be concerned. The good news? The loft has One World Trade views from every room and was said to be “super-sunny, super quiet” in the latest babble.

Interesting that the earlier babble included CitiQuiet windows in the list of features. I usually tell folks that money can buy sound amelioration, though not sound proofing; the latest babble gets close to that unattainable standard with “super” quiet.

an outlier, no matter how you slice it

When StreetEasy does its Manhattan Condo Index based on repeat sales of the same condos, they don’t account for renovation. That’s just too hard, for a great many reasons, and gets washed out (in theory) in the volume, with radical outliers being ignored when they sprinkle the repeat sale data set with unicorn dust. They also (rightly) ignore transaction costs, as those things are highly relevant to an individual buyer-turned-seller’s experience, but not directly related to the loft’s market value at any point.

The StreetEasy Index was up 7% from when this foundation bought (March 2014) and when it sold (January 2015). Loft #2B was up 28% in that time, a portion of which a very generous person might ascribe to the new mint-y light kitchen with light ash floors, as compared to the 10-year-old dark mint-y kitchen. But if they spent $100,000, it’s hard for me to see a dollar-for-dollar increase in value. Give them $100,000 in added value (I’m feeling generous at 50 degrees), that’s still an increase in value of … (don’t hold your breath, or get your hopes up) … 27%.

We don’t have data yet to compare how the change in value in #2B compares to neighbors, but all the neighbors should be happy with #2B at $1,793/ft after being at (only) $1,403/ft in March 2014. Maybe something’s happened on this corner in the last 6 months (the end of road work??), but the mint-y loft #5D sold for an adjusted $1,455/ft in May 2014, very tolerably in line with #2B just two months earlier at $1,403/ft, and the equally mint-y #2F sold for an adjusted $1,412/ft in July 2014, again very tolerably in line with #2B four months earlier.

Did the light kitchen and floor really add that much value to #2B, or should the next sale at 73 Worth Street look more like #2B-in-2015 than this trio from 2014?

 

 

 

 

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very funky Soho cozy (small!) loft at 140 Sullivan Street sells at $1,454/ft

by Sandy MattinglyPosted on Posted in loft neighborhoods soho — No Comments ↓
open lofts are for sound sleepers only

I always wonder who the folks are who love open lofts such as the little (“1,100 sq ft”) one #3R at 140 Sullivan Street that just sold in the tiny corner of the northwest corner of proper Soho. The loft hits high on the Charm and Authentic scales, but privacy is essentially nil. It looks as though it is optimized for a single individual, rather than even a couple. And a very neat individual, at that.

First, any visitors enter the space by walking within two steps of the end of the bed, with that bed visible from almost any spot in the loft. Second, this open loft is, well, open: without even a fabric curtain to provide visual separation from the sleep area and the living / eating / cooking area. While that’s an easy enough element to add, in this case you’d have to deal with the lovely built-in bookshelves that frame the logical space for such a curtain (or wall!). Third, any guests who need to use the loo will not only traipse past the bed (again) but will have to walk through your dressing room and will then have to step up into your walk-in shower, before finishing up at the wash stand back in the dressing room. Do the walk on this floor plan and you’ll appreciate the journey, say from the dining table to the toilet:

pass the foot of the bed on the way in, the head of the bed to the WC, and then it gets interesting

Funky, no? A set-up that will not appeal to many, right? The Market had no trouble, buying the loft for $1.6mm, a tiny premium to the ask of $1.595mm. (If StreetEasy has it right, the first contract took only 6 weeks but never closed; the second took 17 days.)

Conventional Wisdom is not universally applicable

It is an article of faith among real estate sales people (and, especially, among professional stagers) that idiosyncratic design choices reduce the pool of potential buyers, and that a reduced buyer pool means a lower price. I can’t say that happened with loft #3R, sold at $1,454/ft in a no-frills coop (though one with low maintenance). The fact that the “bathroom” sink is in the dressing room is not quite as idiosyncratic a choice as putting the toilet in the shower, but these are not the only unusual plumbing room choices.

I don’t think I have ever seen another kitchen broken up like this:

dishwasher + sink in the foreground, oven after the 1st window, frig after the 2nd window

The scale in this loft is … unusual. The entire space is “1,100 sq ft” (at least as book value) but the footprint devoted to the bath (from sink to shower) runs about 20 feet, while the walk from the kitchen sink to the refrigerator is about the same length. (That’s essentially the entire length of the loft, from “bathroom” sink to refrigerator.) The array does make it very easy to grab another cold bottle of wine from the frig, possibly even without getting up from the table, if the person seated on the end is tall, leans back, and the wine is on the door of the refrigerator:

tallest person sits closest to the frig, right?

I count 12 chairs at the dining table. Three times the number of people who can sit comfortably in the (only other) seating in the loft:

this sitting area looks a lot bigger on the floor plan than in the photo, doesn’t it?

It feels like metaphorically beating that dead horse, but note the idiosyncrasy of the paint job in that photo. “Possible” and “About” are plainly stenciled, with two additional words or phrases I can’t make out. (Of course sellers expect buyers to repaint when they buy, but this is an instance in which that is mandatory, for everyone other than the few who may see the Possibilities in and About stencils.)

The workmanship in the loft seems top notch. Bathroom finishes are certainly shiny, the wood built-ins (Shaker!) are placed throughout the loft, the wide plank cherry floors look great, and the seller wanted to be sure buyers would note the dressing room pocket doors, as there are listing photos of the bed with those doors both closed (#4) and open (#5).

One more design point …. the ceilings vary. Classic loft tin ceilings are above the bed, with open beams and joists in the main room. But that’s not all the ceiling variety, as the strip of ceiling between the iron beam and window wall above the (small) seating area is sheet rocked and painted to flow into the wall. It works for me, with the three ceiling zones indicating a rather compulsive designer of such a cozy space.

Truly: funky, funky but chic. Sold for $1,454/ft. Nice work, all the way around.

is there a small-in-Soho premium?

There are not enough data points to be definitive about this, but I strongly suspect that loft #3R did as well as it did because of the relative scarcity in Soho of small loft spaces. A single buyer or a couple who (a) don’t need a great deal of space and (b) don’t want to spend more than $2mm don’t have many choices. While the Conventional Wisdom is that larger spaces tend to command higher prices on a dollar-per-foot basis (what The Miller calls 1 + 1 = 2.5), my working assumption is that this convention breaks down for premium small space in Soho (and, likely, in Tribeca). In a StreetEasy search this weekend for available listings above $1.25mm but less than $2mm, I found exactly one (apart from you-can’t-live-here-full-time Trump Soho listings).

Fascinating market dynamic, especially if it holds.

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that awkward moment, when your Tribeca past catches you short

by Sandy MattinglyPosted on Posted in loft neighborhoods tribeca — 4 Comments ↓
third owners ever for American Thread Company loft face new challenges

Did you ever have the experience of walking down the street (perhaps with your head down [snow!], perhaps on Beach Street, walking east at the rounded corner with Sixth Avenue) and bumping into someone going in the opposite direction? Personally, I’ve actually never done that, but I had the real estate equivalent level of surprise when I updated my Master List of downtown Manhattan loft sales and found that the “1,334 sq ft” Tribeca loft #6G at 260 West Broadway (the American Thread Building) sold recently for $1.825mm in such condition that the only listing image was the floor plan.

You see, I created this floor plan when loft #6G was an open loft, without interior walls:

this floor plan is (mostly) 34 years old

I bought this loft from the sponsor at the end of 1981 (the first American Thread unit to close) and moved in a few weeks later, as soon as we could get a contractor to build the walls for the master and second bedroom, and those closets in the master. (The curved wall took awhile, as I recall.) Some other owner in the building moved in without putting up any walls, so we are not the first American Thread residents, just the first owners.

The loft hasn’t been listed with a broker since 1981. I haven’t seen this floor plan since we sold it in 1989. Day-um.

The full Property Shark ownership record shows that the woman we sold to in 1989 died, and her estate transferred the loft to a related party (her husband? son?) in 2002, and that guy’s estate was the recent seller. In nearly the same exact configuration as we built it out in January 1982. I am pretty certain the home office with sleeping loft above was not part of our plan, but I can’t remember where we put the east wall of the master (lined up with the master bath wall, with the second bath wall, or somewhere in between?). If the loft truly hadn’t changed otherwise, there would be clerestory windows in the north wall of the master, and I am pretty certain there were glass bricks in the west wall of the second bedroom. That kitchen island is new (well, since 1989), as we had a piece of furniture there that served as an island, the top of which was a 30″x60″ maple butcher block we bought on Bowery that was 2-1/2″ thick, a portion of which is in my current kitchen.

I can’t remember what we sold for in 1989, though it was something like $489,000. (The deed doesn’t have more than the then-standard “ten dollars and other valuable consideration” thing.) But I do remember what we paid for it: $209,000. And I remember what the initial rate was on or mortgage.

(wait for it)

16.5% (yup: sixteen point five percent) We were in a recession then!

I also remember that we cancelled a planned trip to Hong Kong in order to buy the loft, resolved never to eat out again. (Ha!) But I digress …

the loft is (largely) unchanged, the environs not so much

There are no listing photos, and you educated consumers know that this bit of broker babble means the space was in pretty primitive condition:

Ripe for renovation …with three exposures

Maybe the kitchen appliances and/or cabinets have been changed, but (other than the office/loft thing-y) the place has not been appreciably updated for a long enough period that there is no mention of “updated” anything. I am betting the place is pretty much as we left it. In 1989. As we built it in 1982. Day-um.

Without photos, you’d have to know the building well to know what those “three exposures” get you. Those five west windows were never worth much, as the (narrow) St. John’s Lane is over there, permitting little light from this height and no view. In our day, those four north windows had full views uptown, with no taller buildings until you crossed into Soho. But now there is a hotel abutting the north wall of the American Thread Building, with a roof line that must be pretty close to these windows. (I’ve not been in the unit since the hotel went up, obviously, so I am estimating based on having gazed at the hotel roof [many times!] from the sidewalk by Nancy Whiskey Pub.) My guess is that these windows just clear the roof, but that whatever mechanicals are on the hotel roof are at eye level from loft #6G. Behind the hotel lies One York, so even higher floors lose a big chunk of north view. (See the second and third listing photos from the 8G duplex rental listing for peaks at One York and, through the east window in #3, one of the new hotels on the south side of Canal Street.)

In other words, there is some light, but no northern view from this height worth speaking about. That leaves the solitary kitchen window facing east as the only view. A major change since our day, and a major challenge to the new owners. Not that this issue was a problem in attracting a buyer: to market at $1.7mm on October 22, in contract at $1.825mm by November 20, and closed on February 9. Yes, Virginia, the correct asking price solves what would otherwise be marketing ‘problems’!

That’s a pretty good value for a loft needing a gut renovation, especially one with only one window with a view. The last sale in the building of a loft of similar size and view was the “1,380 sq ft” #9E duplex. That was sold for $2.025mm in July 2013 with two advantages over #6G: a no-detail spared renovation, and it was said to be “light filled”. I am skeptical about the light, as the window photos all show the blinds down, with just the hint of brick walls nearby, but the next building is no taller than the American Thread roof (12 floors up) so maybe the 9th and (especially) 10th floor windows over St. John’s Lane get enough sky to actually have light. Anyway, #6G at $1,368/ft while needing a gut in February 2015 fits remarkably well to #9E in July 2013 at $1,467/ft in no-detail-spared condition.

Adjusting that #9E sale for time based on the StreetEasy Manhattan Condo Index (up 17% as of January) would ballpark that current value as about $1,710/ft. That leaves the new owners of #6G with a renovation budget of about $342/ft to bring #6G up to #9E’s standard and value. That should be do-able.

heading for a light and dark split here in Tribeca

While I’m here, let me note (in passing only) that the hotel that blocks “G” line windows below #6G probably also blocks light in low floor west or north windows on the other side of the building (the wing that fronts on Sixth Avenue). This will likely lead to a significant split in values between those units that look ‘outside’ (the south and east facades you see in the building photos) and the other units, which are dark because they face only St John’s Lane and/or (on low floors) the hotel. We’ll deal with that another day, as I want to get to meandering down memory lane a bit….

back in the day

I’ve long considered the American Thread Building to be the first great condo in Tribeca. There might be older condos, though not many; the older owned residences down here were coops, almost exclusively. A couple of weird things about how this condo was marketed ….

This might be the oldest doorman coop or condo in Tribeca. It wasn’t supposed to have one, at least not at first. I can’t remember when we signed the purchase agreement in 1981, but at that time there was no doorman planned. Sometime between contract and closing the developer proposed adding a doorman, and increasing common charges. I suspect every contract signer had the option of withdrawing, but I also suspect no one did. I can’t remember if it was originally a two-shift doorman, or if it was a 32B-J contract, but the additional expense was shared among enough units that it didn’t cost much. And certainly was worth it. Which brings me to the lobby, which was retrofitted to add the doorman desk….

Before conversion, the building had been squatted by ‘artists’ for I don’t know how long. I say squatted because I don’t think they’d been paying rent. And I say ‘artists’ because, whatever else they were, some were vandals. In addition to the unforgettable “Die, yuppie scum!” spray painted on the facade before we moved in, the lobby had been trashed. Again, details fade into memory mists, but I remember lovely mosaics and column capitals in the lobby that had been seriously damaged by (we were told) artists in … er … residence. It didn’t seem to have been done for materials so much as simply to cause damage. In that, the ‘artists’ succeeded.

Speaking of art …. I can’t remember as I sit at the keyboard if any remain, but there was an art installation on the north faces of the two wings, consisting of some metal panels affixed to the facade. Each panel was a different single color, about 30″ by 60″ or 72″. It had something to do with the way light reflected off each colored panel differently, and different from the way light played off the (white) facades. Or maybe it had something to do with the way they were placed, as the windows on those two facades were not the same on each floor.

That art was used as a selling point. (It wasn’t for us, but it may have been more significant for other owners.) There was also a technology angle. Details are lost (I hate when that happens) but there was some sort of computer package offered with the loft. Whether it was a dial-up connection (was there email or an internet in 1981??) or just a piece of equipment, you had to check a box to not get the technology package (and get a discount of some hundreds of dollars off the purchase price). It had something to do with being cutting edge, anticipating the further use of such technology, but I don’t think it had to do with special wiring. I wish I could remember….

I had lunch last week with a former American Thread neighbor who has also been out of the building a great many years. He remembered more of the many creative types who lived in the building when we did (I got Isabella Rosellini, Jamie Lee Curtis & Christopher Guest, Betsey Johnson, Adrian Lynne; he had names I was unfamiliar with from the art world). In checking Property Shark about #6G I was stunned to see three other owners from the sixth floor who were owners in my day.

One final note: the developer was a Rose family entity. This project was understood to have been the personal project (and the first such personal project) of Jonathan F. P. Rose, who has gone on to do many interesting projects on his own, often with a social utility (such as affordable housing) or other public interest angle (green building techniques, for example). I often wonder when I see his name in the paper what he thought of the American Thread project. He liked it well enough to have bought a very large unit (probably the duplex or triplex in the southwest corner of the building), which is always a comforting thing for original owners, though a fraught choice by a developer.

That’s more than enough for one day, one blog post, don’cha think?

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buy low, renovate well, sell high: easy-peazy at 366 Broadway

by Sandy MattinglyPosted on Posted in loft neighborhoods tribeca — 2 Comments ↓
a conventional story downtown Manhattan, enhanced by beautiful renovation work

I need to bring some balance, some rationality, to my consideration of loft renovation projects in Tribeca. Steven Soderbergh’s devil-may-care attitude is driving me a little crazy today (yesterday’s post, 155 Franklin Street loft sells in a reverse flip (viewer discretion is advised), has gone through several updates today, and has spawned many tweets, a Facebook spin on my Manhattan Loft Guy business page, and even a quick hit on my LinkedIn page about how he’s ruining rational market analysis by not being, you know, [economically] rational). With that as background, I am thrilled to have the recent sale of the “2,060 sq ft” Manhattan loft #2B at 366 Broadway (Collect Pond House) to chew on.

Folks did everything right: they bought as The Market should have been well into The Thaw, at what seems like a still-deeply discounted price ($1.17mm on November 25, 2009); they had the taste and good fortune to hire a quality team to do a lovely renovation; and they just sold at a significant premium to comps in the building, evidently pocketing a lot of ‘extra’ money, beyond what they’d invested or could expect from passage of time ($3.101mm on January 29). Let’s get the drooling out of the way first….

hard to do better with a second-floor no-view loft

The post-renovation floor plan is less inspired than efficient, and mirrors other lofts in this line in this building that I have seen over the years:

well executed, but no genius here (yet)

You’ve got two moderately sized bedrooms, additional utility from the office-with-Murphy, multiple plumbing stacks allowing widely separated baths, plus a laundry room behind the kitchen, and a master ‘dressing room’ that deals with the funky angles caused by the bend in the building’s public hallway.

The fun stuff is in the details, of course, of course, which actually look better than they read:

light-filled space features 12.5 ceilings, restored crown and base moldings, 7.5 wide-plank European white oak floors, central AC, custom built-ins, and southern exposures … new 10 double-hung windows. …. Modern chefs kitchen boasts 48 Bertazzoni range, Caesarstone counters, tile backsplash and abundance of storage. Spacious master suite includes dressing room and luxurious 5-fixture bath. Baths have radiant-heated floors and are beautifully finished. Fabulous private laundry room.

I especially like the kitchen, with a white that often feels cold but in this rendering does not (is it the tone of the flooring that warms it?):

somehow, warmer than Richard Meier white

The living room is warmer still:

standard shape, but high ceilings and tall windows help a loft (even 2nd floor windows that need bottom blinds)

I especially like the radiators (are they custom at this height?), but everything works. I’m not the only one who appreciates this renovation:

Sept 8, 2014 new to market $2.75mm
Sept 27 contract
Jan 29, 2015 sold $3.101mm
 how extensive was the renovation?

The floor plan and listing photos from 2009 show a loft that is superficially the same (shape and array of rooms) but radically different.

pivot the master bath, push the kitchen forward to fit the laundry, move the 2nd bath to the 2nd BR … simple enough to draw

The 2009 broker babble oozed potential (“flexible enough for many other layouts”) and necessity (“has not been on the market for over 30 years”). I usually prefer wood-frame windows that look like wood-frame windows, but the current white looks an improvement over this:

and I had forgotten the mosaic tiling, vestiges from an earlier public hallway configuration, no doubt

The new floor plan recaptured for the living room a fourth window (behind the left wall in 2009), a much more efficient use of space, giving the living room more volume even with the kitchen moving forward.

In principle, I prefer lofts that retain original elements, like that mosaic flooring (an element that has to force visitors to ask about it). But the new loft, with new flooring, and a tweaked array is a fully integrated and significant improvement. The $64,000 question is what did all this good stuff cost?

let’s play with numbers in the ballpark

Without access to their budget details, we can only guesstimate how much value the lovely renovators added to the loft, above their Cost + Renovation, Adjusted For Time. But that uncertainty never stopped me before ….

At “2,060 sq ft” and every one of those feet redone, I’m guessing these folks spent $600,000 to $700,000 in 2009, with the real number more likely to be lower than that range than higher. Let’s add that upper limit to their purchase, then adjust for time, with the single number proxy for the overall Manhattan residential real estate market (aka the StreetEasy Condo Index) up 37% from purchase in November 2009 and sale more than 5 years later.

2009:

$1.17mm (purchase cost)
$700,000 (estimated renovation)
$673,200 (timing adjustment of 36%)

$2,543,200 (projected current value)

In ballpark terms, we’ve just estimated what the loft would have been worth in the current market based on a series of reasonable assumptions: (a) if the November 2009 purchase was a true ‘market price’; (b) if the StreetEasy Index is a reasonable proxy for changes in the market; (c) if the renovation had really cost $700,000 [$340/ft]; and (d) generated a dollar of market value for every dollar spent. These assumptions seem pretty reasonable to me, but note how big the spread is between the nominal $2.5mm or so and the observed $3.1mm or so.

My strongly held working assumption is that these folks generated quite a bit of ‘extra’ value by renovating so well.

the neighbors must be jealous

The last two public sales at Collect Pond House strongly support this conclusion, while the last private sale is … interesting. Let’s start at the top, with the different shaped but similarly sized [update, see BG comment below] smaller penthouse loft #12C, which sold five months before #2B. That one was babbled very enthusiastically:

Beautifully renovated, this loft boasts an open chef’s kitchen with Carrera marble slab counter tops, pro-grade appliances from Sub-zero, Viking and Miele, custom cabinetry and wine storage. The bathrooms are finished in Waterworks tiles and fixtures, and both have skylights. Other details include high ceilings, a gas fireplace, oversized arched windows, central air, walk in closet, Washer/Dryer, sound system and home security system.

And it boasts two (three?) things that are generally treated as major (expensive) elements that #2B lacks: “unrivaled light[,] unobstructed views”, and “approximately 1200 square feet of landscaped multilevel rooftop entertaining space”. Frankly, this one as a comp really confuses me, as it should have sold much higher than #2B, even allowing for timing differences, because of the (seemingly) equal condition, much better light, much better view, and those “1,200 sq ft” outdoors. Yet, it sold for (only) $2.6mm. [see below]

More recently, the #2D duplex sold five week before loft #2B. There’s no significant timing adjustment to make, but that one is larger (“2,849 sq ft”) and in pre-renovation condition (your basic “[b]ring your architect and design your dream home in Tribeca” special project). [Reader BG thinks the light is much worse on #2D’s alley.]  That one sold slightly above ask at $2.924mm, or $1,026/ft. Compare that to the post-renovation price of the smaller #2B ($1,505/ft). No way that #2D would cost $479/ft to bring it up to the quality of #2B.

Private sales are impossible to comp, as we lack information not only about the condition of the loft when sold, but we have no way to tell how arm’s length the deal was. Loft #4B just sold for a tad more than loft #2B. I wonder how they arrived at that price.

The recent #2B sellers did not renovate in order to sell; they renovated in order to enjoy the space (assuming they did it right after buying, of course). They very likely enjoyed it a lot, as it is a beautiful loft. The fact that they generated so much value was, no doubt, heartening, but not the point.

Congratulations to them. It helps to wash some of the Steven Soderbergh backwash out of my mouth.

 

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155 Franklin Street loft sells in a reverse flip (viewer discretion is advised)

by Sandy MattinglyPosted on Posted in loft neighborhoods tribeca — 2 Comments ↓
sometimes real estate doesn’t work out (or was it Life that didn’t work out?) [major updates at bottom]

No matter what your interest is in the Manhattan residential real estate market, what happened to the recent sellers of the “3,532 sq ft” prime Tribeca loft #3N at 155 Franklin Street (the Sugar Loaf Condominium) has to pull at your heartstrings. At first blush, selling an “authentic raw space” for $1,562/ft seems like not such a bad deal for the sellers, who invited the world, and their architects (“bring your own architect and turn this character-rich blank slate into Tribeca’s most prized home”). But on further review (use your NFL referee voice for that), these recent sellers at $5.52mm could not have been happy, having been somewhat-recent buyers in June 2013 at $5.865mm.

That’s an obvious hit of $345,000 before considering other expenses, in a local geographic market that has gotten stronger, rather than weaker in the 12 months between purchase and marketing, and 19 months to sale. Approximately 17.415% stronger, if we can use the StreetEasy Manhattan Condo Index as a single-number proxy for change in the overall Manhattan residential real estate market from purchase in June 2013 to sale last month (even though the Index hasn’t been updated since November).

(If you have a Late Nite TV or infomercial voice, use it now, because ….) But wait, there’s more!!

The “other expenses” category for these June-2013-buyers-turned-January-2015-sellers includes a major demolition. When they bought the space in June 2013 it looked like a finished loft. (That listing is here.) Granted, those 2013 sellers weren’t bragging about the finishes, but still: the place was in move-in condition, and in good enough condition that willing buyers (ahem) paid $5.865mm for it.

(edit 2/27 ‘cuz all posts look better with pictures) this is “raw”

(more 2/27) and this is what it could look like, $750,000 or more later…

Evidently, they bought it to transform it. Hence the demo; hence the “plans by architect Elizabeth Roberts [that] create a grand Master loft with study, TV room and open living/dining space allowing for endless versatility”. These unfortunate folks are (not very well) hidden behind a restaurant-ish LLC (more on that, below), but I can’t help but wonder if this was a group of investors that got cold feet or if this was a family (or some other configuration of regular humans) that suffered some calamitous change in circumstances. Having paid $5.865mm in June 2013, and then having taken the place apart (“3,532 sq ft” worth of gut renovation ain’t cheap), the LLC wasn’t planning on making any money by coming to market at $6mm, as the apparent $135,000 “profit” on a full price deal would disappear just in transaction costs, and then some. But they didn’t sell at $6mm….

Of course there’s more: just in big numbers, they paid a mansion tax in June 2013 ($81,900), they paid transfer taxes to the State and City on the sale ($100,740), and they paid the president’s team at that hot new brokerage with the newly-one-word-name $331,200 to share with any co-brokerage that brought the (happy!) buyers. That’s more than a half million bucks in round trip transaction costs.

Of course there’s more. Add another $70,000 in common charges and taxes for the privilege of owning-but-not-living-in the loft. Then we get to some really big numbers incurred between buying and selling ….

Property Shark shows that the LLC took a mortgage for $3,812,250. Because rich people who don’t need to borrow money are not like you and me, the LLC was given this rather jumbo loan at 2.875% for the first ten years (see page 19 of the mortgage), for monthly payments of just over $22,000. Let’s add $400,000 for the mortgage payments made over 19 months.

That’s $983,000 worth of pain on top of the $345,000 hit on the purchase-then-sale; with the demolition, the architect, and any other miscellaneous expenses, the LLC members are probably looking at close to a $1.5mm hit. They put down $2,052,750 on June 14, 2013. They didn’t walk away with much of that on January 30, 2015.

As I said, that’s either “cold feet” or “some calamitous change in circumstances”.

let’s view this sequence through the metaphysics of The Market

These folks got creamed, no doubt. One question is whether they got punished more on the front end (by over-paying at $5.865mm in June 2013) or at the back end (by getting squeezed at $5.52mm in January 2015). Selling a loft at a loss in prime Tribeca while the overall market is up about 17% is a Man Bites Dog story, even without the luxury Five Million Dollar Condo context. Regular readers of Manhattan Loft Guy know that I am always intrigued by paired buy-then-sell transactions that are market outliers, and this pair is a huge outlier.

They bought at $1,660/ft in June 2013, then sold at $1,562/ft in January this year. That first transaction looks like it fits the overall market more than the second transaction fits. The last sale in this 10-unit Tribeca condo was the smaller #4S (“2,452 sq ft”) in September 2014 at $1,937/ft. A simple timing adjustment based on the StreetEasy Index suggests loft #3N would have been worth about $1,925/ft at the time #4S sold at $1,937/ft, a remarkably felicitous projection. I’ve not seen either of these lofts, and it is difficult to comp for condition from broker babble and photos, but neither sets of babble is especially enthusiastic or specific about finishes. Maybe the #4S plumbing rooms are more highly polished than those of #3N. And maybe there is a difference in value for facing mid-block (south) than onto Franklin Street, but if there is I can’t see it easily.

Not to complicate the same-building comp process, but loft #3S sold at a significant premium to #4S, just three months earlier, at $2,121/ft in June 2014. That one went a half million over ask, which I’ve always felt makes for a difficult comp. The Market clearly considered #3S a much superior loft than #4S, and there are hints of that in the broker babble (“clean, contemporary elegance …. [s]leek, modern finishes”).

Finally, there’s the conveniently-timed fact that loft #2N sold for $5.87mm not four months after The Unfortunate LLC paid $5.85mm for loft #3N. I did see that one while it was on offer, with buyers who would have had to renovate to make the footprint work for them. As I recall, the loft in real life lived up to its babbling, and would not have needed a renovation if the buyers didn’t mind the bedroom array (that “bedroom” just off the kitchen works better as a library).

Based on all of the above, I am quite comfortable that The Unfortunate LLC did not overpay on the way in to this mess. The outlier part of the pair is, then, almost certainly the January 2015 sale at $5.52mm, $1,562/ft. (These folks agree, at least by implication, by asking $2,241/ft for a smaller loft in the building.) What changed?

You wouldn’t know it by the extended #3N history, but The Market is up. (Again, those folks at $2,241/ft certainly and enthusiastically agree.) Two things about selling a loft post-demolition pre-renovation: (a) there’s hardly a better signal to potential buyers that sellers are (ahem) “highly motivated” than to start a renovation project, and then stop before, you know, renovating; and (b) you reduce the buyer pool to only cash buyers when you demolish it to this extent, as no bank will offer a standard mortgage on a loft that is uninhabitable. Each of these elements swings leverage to buyers instead of to this seller, but the degree of the swing is (in retrospect) rather breathtaking.

Indeed, there’s hardly a better signal to The Market that The Unfortunate LLC had to sell than the fact they did sell for $5.52mm what cost them $5.865mm to buy, and all that additional and ensuing money in fees, to carry, to plan to renovate, and to demolish. (Did I mention, to carry??) No one not intending to burn cash does this unless they have to.

 why do celebrities who use LLCs sign documents themselves?

There are a great many things I don’t understand about celebrities, and about other folks with too much money. When they go to the trouble to buy real estate behind a LLC, you’d think they’d have other folks (lawyers, staff … flunkies) sign things, so that they remain safely and quietly behind the wall of the LLC. (Remember that New York Times series about oligarchs and other shady Russians, Malaysians, Indians, Mexicans, and other miscellaneous non-US folks buying very expensive condos in Manhattan? The Old Grey Lady had to do a lot of digging to get through LLC screens and to identify straw men.) It wasn’t until I was well into the pricing analysis for this post that I examined the mortgage through Property Shark. I was shocked to see recognizable names as signatories for The Unfortunate LLC.

Unless Steven Soderbergh and wife Jules Asner are flunkies for still-higher level money, they are the folks who just flushed about a million and a half bucks down this Franklin Street toilet. (See their signatures “as Managing Member” of the borrower LLC on pages 23 and 25 of the mortgage.)

Scratching my head….

People better versed than I in The Celebrity World will have a better angle on understanding whether there is public information available that would explain why this Famous And (formerly?) Very Rich Couple pulled the plug on this disaster in Tribeca. Most likely they’re really not flippers, but bought the thing to live in, paid that architect to design “Tribeca’s most prized home”, commenced demolition, and then …. Something. Happened.

Something. Calamitous. In fact.

No one sets out to do this, even if they are intent on burning cash. (There are easier ways to burn cash.) Maybe the inter-tubes already know what’s going on with this Hollywood couple (cash crunch? bankruptcy? ??), but it’s got to be something. It’s not every day that you see a Tribeca dog (a fine breed, that) bitten by a man (even a rich man).

the More Money Than God update (2/27)

The New York Post has a piece on this Tribeca condo loft celebrity-magnet, which addresses the Soderbergh deal, apparently posted while I was still editing this post. They treat this buy-high-sell-low experience as no big deal, noting simply that

The spread eventually traded hands for $5.52 million, according to city records, a slight loss from the $5.86 million Soderbergh shelled out in 2013 for the space, records also show.

Of course, “a slight loss” doesn’t begin to cover it, but it all seems part of A Grand Plan:

The “Erin Brockovich” director had serious ambitions for the apartment, but then scrapped them, according to previous reports, which also say he ended up buying a larger loft in the nabe.

I missed those “previous reports”, possibly because they concern lofts at price points I don’t focus on, or possibly because they were on Page Six. The rich really are different. Sigh.

Note to self … find that larger loft (!) in Tribeca he preferred to loft #3N and play with that floor plan and those numbers …

another friggin’ update (the larger loft is … smaller!)

Tribeca Citizen clued me on The Twitter in to this from the New York Daily News: Soderbergh let someone else the do heavy lifting, and is buying a ground floor duplex at 7 Harrison Street (dubbed “the Atelier” in this new development). It is one heck of a space, though a tad smaller than loft #3N, with “3,135 sq ft” interior and a “300 sq ft” private garden, which features a 20-foot high ivy-covered wall. The garden sits outside the 23-foot high custom steel windows in the ‘salon’. Because Money.

The timeline suggests Soderbergh made the deal to buy this thing before putting loft #3N up for sale, unfinished. He’d let someone else worry about the renovation.Daily News says the deal has closed, but I don’t see it yet on StreetEasy or Property Shark, or the inter-firm database.

Ask was $8.5mm. As I said in my earlier update Feb 27:

The rich really are different. Sigh.

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