65 West 13 Street “sale” is not a “sale”

less here than meets the eye
You will not find the recent "sale" of the Manhattan loft 65 West 13 Street #9C in the Master List of Manhattan loft sales since November 2008 because I refuse to believe that it is a real sale. This, despite the fact that the loft was offered for sale through PruDE for 3 months in 2009 (asking $1.995mm) and again since February 2010 (asking $1.995mm), and that the sale on June 8 was reported within REBNY. Despite these typical indicia of an arm’s length transaction, I don’t believe the price reflects The Market and the names of the parties suggest an intra-family transaction. I will explain after a sideways digression.

The last extended Manhattan Loft Guy discussion I see about the challenges of figuring out whether a particular sale is — or is not — a real sale, and thus indicative of The Market, was my January 17 post, riddle me this / the naked data point at 35 Wooster Street. As I said there,

By coincidence, I happened to have had a real (face to face!) conversation with long-time Manhattan Loft Guy reader Lofty last week about the difficulties in interpreting raw sales data in Manhattan, including specifically the problems in figuring out if a transaction is a legitimate indication of The Market because it was at arm’s length, or if it can’t be used as an indication of real value because (for example) it is between two related parties. I had in mind in that conversation the hard-to-interpret resale of a loft at 260 West Broadway (December 2009 clearing price was lower than the March 2005 price) that I addressed in my Welcome Back post of January 4, American Thread loft sells on Groundhog’s Day, again.) In that instance, there have been enough other sales in the building that this one stuck at as perhaps not at arm’s length, and I speculated about a possible explanation.

50% off

Granted, there’s been no sales in this building since

#8D

closed over a year ago, so it can be difficult to make judgements based solely on price. In addition, the #9C

sellers

had proven themselves to be persistent (persistent non-sellers, but persistent nonetheless), as they had tried to sell for 3 months in 2009, as well as for 5 months from 2004 into 2005 (at $1.95mm). It is safe to say from this history of no success, that the sellers had not found the right market price for the loft. Nonetheless, the sale recorded at $999,900 is just too darn low. I am immediately highly doubtful that any seller in an arm’s length transaction would take a 50% discount without first dropping the price.

But the clincher in this case is that the buyer has the same last name as the two sellers. Almost certainly the buyer is the adult child or other relative of the sellers. Very likely, the sellers used this loft as a pied-a-

tierre

(they have the same notice address in Florida as sellers as they had as buyers in 2001). Possibly, the sellers got tired of not selling and decided to take some money out by some form of

intra

-family transfer.

send in the clowns (err … lawyers)

The sellers paid $990,000 when they bought in 2001. They just "sold" at $614/ft, making a "profit" of $9,900. I assume they have excellent tax, gift and estate lawyers to work this all out, as the last sale (#8D in May 2009) was at $1,159/ft.

I just hope that anyone tempted to use this sale as a comp looks a little bit behind the numbers.

© Sandy Mattingly 2010