Archives
December 2007
Dec. 31, 2007 - enough about me / what do YOU want from me for 2008?
what do readers want from Manhattan Loft Guy?
This blog has grown organically since its quiet launch in March 2006. I write mostly about things that interest me about Manhattan lofts, or NYC, or (sometimes) whatever. It seems that enough people are interested to keep clicking, but I wonder what else I can do to engage or serve you readers better.
Feel free to tell me here, or by private email [Sandy (dot) Mattingly (at) CBHK (dot) com].
open house reviews, up or down?
The one repeating topic that takes a lot of time but is not 'worth it' to me if it is not 'worth it' to you is the Sunday open house thread. I have had time to do something about open houses most weeks, on Thursday, Friday or Saturday, but sometimes it is a strain. Please weigh in on whether this is a useful use of time or something you can easily replicate on NYTimes.com or elsewhere.
I have a to-do list of posts I mean to do, but my history is that many to-dos never get done. I expect I will post a Year in Review soon, and possibly a look ahead. I have been cogitating for weeks about a post (or series) on who should be buying or selling now, and who should be waiting. Perhaps that will be birthed soon.
Happy 2008
Personally and professionally, 2007 was a pretty terrific year. I am very optimistic about my personal and professional prospects for 2008.
I wish for you all the best that 2008 can offer you.
As always, THANKS FOR STOPPING BY. One of you became on Monday afternoon my 50,000th visitor for the month of December -- my first month with that many visitors. Onward and upward!
© Sandy Mattingly 2008
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Dec. 31, 2007 - holy coop Batman! 80/20 hurdle falls down
why isn’t this big news?
Props to Noah Rosenblatt over at UrbanDigs.com for highlighting on Wednesday a law firm PR release about a provision in theMortgage Forgiveness Debt Relief Act of 2007 of huge importance to that small number of Manhattan coops that have the potential for huge commercial rental income. 80/20 Rule Expanded: Co-ops Should Thank Bush.
[I have had a draft of this post since Friday, without getting around to polishing and posting it. Reader Tariq gave me a nudge on Sunday, pointing put that Jay Romano did a piece on it in the Sunday Real Estate Section of the NY Times, Coops Get a Break on Revenue Rules (thx for that nudge, Tariq).]
I doubt very much that Bush is responsible for this (take a bow Charlie Rangel??) and I am amazed not to have seen something big about this in the Times before Sunday], Post or Sun, or from REBNY for that matter (take a bow REBNY??).
My take on this is that the number of Manhattan coops with continuing problems from potentially having too much rental income will shrink from a few hundred to just a handful. And many of the coops that are on the border of compliance with the new tests may be able to jigger their space or their books to reach compliance.
remember what is at stake
As I have highlighted before (in the January 16, 2007 IRS rules for coops / beware the 80/20 rule), coop compliance with the rules gives shareholders personal income tax benefits, described by Romano as “deductions for property taxes and mortgage interest, and the shielding of up to $500,000 from capital-gains taxes when the co-op is sold”. Indeed, careful banks should not be providing residential mortgages into buildings that don’t qualify as “cooperative housing corporations”.
Curiously enough, I think the coops that will benefit first (and probably most) are those that have not been in compliance with the 80/20 rule, while those that will have to wait to benefit have been straining to comply with that test. (Life is … unfair, no?)
new text adds 2 tests
I get the text of the bill as reported out of the House and Senate conference from the official US government website, nicknamed Thomas. As you see, the old 80/20 test (the Income test) is now one of three tests that a coop can meet; the second test (the Square Footage test) should bail out any 5-story coop with only ground floor retail, or any 10-story coop with ground floor and basement retail; the third test (the Expenditures test) should bail out everybody else if they pay out 90% of their expenditures for the residential part of the building.
(a) In General- Subparagraph (D) of section 216(b)(1) of the Internal Revenue Code of 1986 (defining cooperative housing corporation) is amended to read as follows:
`(D) meeting 1 or more of the following requirements for the taxable year in which the taxes and interest described in subsection (a) are paid or incurred:
`(i) 80 percent or more of the corporation's gross income for such taxable year is derived from tenant-stockholders.
`(ii) At all times during such taxable year, 80 percent or more of the total square footage of the corporation's property is used or available for use by the tenant-stockholders for residential purposes or purposes ancillary to such residential use.
`(iii) 90 percent or more of the expenditures of the corporation paid or incurred during such taxable year are paid or incurred for the acquisition, construction, management, maintenance, or care of the corporation's property for the benefit of the tenant-stockholders.'.
(b) Effective Date- The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act.
fewer coops will need clever lawyers; some need a ruler
As I said, I think nearly every coop that has either already exceeded the old Income test (like the SoHo coops with very valuable retail space, such as 55 Greene Street, which has no maintenance) or has been artificially reducing the rental income below market should be able to satisfy the Square Footage test. The coops that will be borderline on this test will be very small (4-stories, max) or will have multi-floor commercial space. These coops will retain architects or engineers to do the precise measurements, and possibly reallocate space in their leases to take some away from the commercial space that can be characterized as “ancillary” to residential use.
I wonder if a roof deck qualifies within “total square footage”, so that a 3-story coop with ground floor retail can creep over the 80% test by adding a roof deck “available” to shareholders, even if no one uses it.
... some need to count beans
The Expenditures test should provide a safe harbor for all but the smallest coops that cannot meet the Square Footage test, though the smart CPAs may be required to find the margins. The typical Big Ticket expenditures for a coop include some that are allocated evenly over the entire building (including commercial space), such as real estate taxes and insurance, but others should be allocable only to the residential portion, such as utilities and payroll. Maybe some small buildings will take this opportunity to hire some (or more) staff to soak up some ‘excess’ income.
I wonder if creating (or increasing) a coop’s reserve fund will qualify as an “expenditure” for the “management” or “care” of the building for the benefit of shareholders. If so, that is an account into which ‘excess’ income can be stashed, at least until the scale of a reserve fund gets ridiculous.
effective immediately, but benefits delayed for most
Since the bill was signed on December 20 and is effective in the current tax year, the only coops that will benefit immediately are those that have not been in compliance with the 80/20 Income test. All of a sudden, they get the benefits of pass-through deductions and non-recognition of gains (to $250k or $500k) if they meet the Square Footage or Expenditures tests.
Funny thing is, the coops that have been straining successfully to meet the Income test by capping their rental income below market will have to wait to get the full benefit of this change. For most of these coops, the additional income available from market rate rents will have to wait until the current leases expire.
some need those pesky lawyers to parse magic clauses
Some ofthe coops that have been straining to meet the Income test by capping their rental income may have magic clauses in their commercial leases that can provide immediate benefits. I know some coops have clauses that essentially escalate rental payments to the 80/20 cap. If those clauses are specific to the Income test, then they will likely not provide a way to raise rents to market rates until the leases expire, but if the clauses are written more broadly to measure against Section 216 standards, these coops may be able to go right to market rents (without passing Go but collecting the metaphoric $200).
Check the fine print.
Charlie, not REBNY
The Times article identifies Charlie Rangel as a prime sponsor of the bill, so Charlie gets the credit. One, two, three … THANKS CHARLIE.
© Sandy Mattingly 2007
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Dec. 30, 2007 - New Listings + Sales of Manhattan lofts in last 7 days
This is my eleventh report on the number, price distribution and neighborhood distribution for Manhattan lofts reported as new to the market or as closed sales in the last 7 days. Data are data, no matter how paltry. Let’s just say that the year has ground to a halt.
For information about how I get this stuff and why I slice it as I do, see methodology for New + Sold in The Last Seven Days.
The stats as of Sunday night ...
- there were only 2 lofts reported as new to the market in the last 7 days, and 6 as sold
- both of the new ones are small and are offered under $1mm; all 6 closed sales were below $3mm
- 1 of the 2 new loft listings is in new development (90 William Street), and half of the 6 closed sales (59 John Street and 2 at 344 Bowery)
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By price
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New = 2
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Sold = 6
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$500k to $999k
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2
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2
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$1mm to $1.99mm
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1
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$2mm to $2.99mm
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3
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$3mm to $3.99mm
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$4mm to $4.99mm
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$5mm+
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By neighborhood
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New = 2
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Sold = 6
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BatteryParkCity
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Chelsea
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1
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Clinton
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EastVillage
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2
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Financial District
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1
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1
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Flatiron
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Gramercy
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1
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Greenwich Village
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1
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Kips Bay
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Little Italy
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Lower East Side
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Murray Hill
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Midtown West
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1
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SoHo
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Tribeca
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TurtleBay
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Upper East Side
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Upper West Side
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WestVillage
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New loft listings in new developments
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90 William Street (be@William)
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1
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Sold lofts in new developments
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59 John Street
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1
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344 Bowery
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2
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© Sandy Mattingly 2007
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Dec. 28, 2007 - a few more on the last slowest open house Sunday of 2007
Yesterday I counted 8 lofts with open houses in Manhattan scheduled for Sunday, and less than 400 Manhattan open houses overall, in the last in a series of slowest-Sunday-yet posts. This will be it, for sure, for sure. Now there are 11 lofts and just over 400 Manhattan open houses overall (419), with the merest possibility of a few more to be added before Sunday.
(remember to check the agent websites Sunday morning to see if open house is still on)
31 West 21 Street #9
$7.395mm and $3,980/mo (condo) for “4,720 sq ft” of “uniquely exquisite” space with 4 exposures, picture windows, “phenomenal” Empire State Building views and details of the “highest quality”; a terrific full floor layout in a very wide building (52 feet)
on the market since May
Open House Sunday December 30 from 12 to 1:30 PM
22 Wooster Street #4C
$3.6mm and $2,307/mo for “3,000 sq ft” of the “perfect blend of uptown elegance and downtown charm” with original wood floors, cast-iron columns; click through all the photos to find the floor plan (the last ‘photo’); my favorite photo is the last one on p3 “morning light thru second bedroom window…”; at “3,000 sq ft”, this is a very large 2 BR + 2 bath
on market since January 2 (happy birthday!)
Open House Sunday December 30 from 1 to 3 PM
the Elaine Clayman team at BHS will be busy on Sunday with 2 loft open houses I have visited before:
251 West 19 Street #3C
$2.4mm and $1,774/mo (condo) for "1,822 sq ft" that I have been following since my June 5 how the (something) have fallen / 251 W 19 St at 40% off due to it’s … err … erratic price history (July 1: follow the bouncing price at 251 W 19 St ? now UP; see comments about the possibility that this is a bank sale)
Open House Sunday December 30 from 1 to 2:30 PM
121 West 19 Street #PH-E
$3.7mm and $1,963/mo (condo) for "2,027 sq ft" with a jittery price history and the rare status as a foreclosure sale; I hit it last on September 28 (anyone as confused as I am? rare foreclosure sale + rare pricing at Lion's Head 11E)
price has held steady for 4 months, but this too will celebrate a birthday next month ($3.95mm)
Open House Sunday December 30 from 3 to 4:30 PM
© Sandy Mattingly 2007
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Dec. 27, 2007 - another slow open house Sunday coming / 4 here, not many elsewhere
I count 8 lofts with open houses in Manhattan scheduled for Sunday at this point, and less than 400 Manhattan open houses overall. The year is definitely yawning to a close, but Frances Katzen's team at PruDE will be busy….
(remember to check the agent websites Sunday morning to see if open house is still on)
260 Park Avenue South #10-I
$2.099mm and $2,128/mo (condo) for “1,328 sq ft” in 2005 conversion with White Glove service
on market since August ($2.15mm)
Open House Sunday December 30 from 2:30 to 4 PM
260 Park Avenue South #3H
$2.1mm and $2,053/mo (condo) for “1,281 sq ft” , as above
on market 10 weeks
Open House Sunday December 30 from 2:30 to 4 PM
260 Park Avenue South #4K
$1.195mm and $1,528/mo (condo) for 1 bedroom + 1 bath (coy about the size) in that same White Glove condo
on market 13 months ($1.445mm)
Open House Sunday December 30 from 2:30 to 4 PM
15 Broad Street #2116
$1.995mm and $1,882/mo (condo) for “1,727 sq ft” in Downtown by Starck (oo-la-la amenities include a building cinema room)
on market 5 months ($2.095mm)
Open House Sunday December 30 from 12 to 2 PM
© Sandy Mattingly 2007
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Dec. 26, 2007 - 161 W 15 drops down to add up to contract
very enthusiastically presented ("stunning", "one of a kind", "meticulously renovated" in an "imposing, fantastically convenient building"). Cook's kitchen with the proper proper nouns. Central air. 14 foot vaulted ceilings.
They must have been motivated, as the priced dropped within four weeks to $1.895mm and on December 10 to $1.839mm. That price drop succeeded in generating a willing buyer with a pen, as a contract was signed as of today’s updates.
sell this year? check
That will make for a happy new year for the seller (and buyer, no doubt).
tough footprint
The challenge of the (nearly square) footprint is obvious: the 4 west windows are it, so you either put any bedrooms on the dark walls near the front door (as the seller has done) or use all the windows for bedrooms and have the public space in the dark. With the plumbing along the north wall, the larger of 2 bedrooms in the current configuration is a stroll-in-PJs from the ‘public’ bathroom, with the smaller (guest) bedroom en suite. Hardly an ideal layout, but perhaps the most logical one once you have decided to maximize the windows and light. Especially as those second floor windows overlook Seventh Avenue.
My guess is that the seller is disappointed not to have gotten $1,000/ft after #5A closed a year ago at $1.475mm for “1,450 sq ft”. My second guess is that the seller is relieved to be in contract within 12 weeks.
© Sandy Mattingly 2007
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Dec. 24, 2007 - tree on the elevator / 1 year + 400 posts ago – merry merry
133 West 14 Street one year ago was my Christmas post: happy condos to all, and to all a good night; it still works for me.
One year ago this was a construction site, with a Christmas tree riding on the top of the construction elevator (pictured in last year's post). 4 units closed in June this year, #2 (“1,650 sq ft”) at $1.825mm and #3, #4 and #5 (all “1,600 sq ft”) from $1.41mm to $1.465mm. #1 is now for sale (since July), asking $2.5mm and $1,424/mo for “2,200 sq ft”
But enough about real estate! For all those who celebrate it, Merry Christmas! See you Wednesday or Thursday.
© Sandy Mattingly 2007
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Dec. 23, 2007 - New Listings + Sales of Manhattan lofts in last 7 days
This is my tenth report on the number, price distribution and neighborhood distribution for Manhattan lofts reported as new to the market or as closed sales in the last 7 days. Let’s just say that the year is strolling to a close.
For information about how I get this stuff and why I slice it as I do, see methodology for New + Sold in The Last Seven Days.
The stats as of Sunday night ...
- there were 14 lofts reported as new to the market in the last 7 days, and 23 as sold
- 9 of the 14 new ones are offered under $2mm, while none are more than $4mm; only 7 of 18 closed sales were below $2mm
- 6 of the 14 new loft listings are in new developments (3 each at 140 West 22 Street and 11 East 36 Street), and 8 of the 18 closed sales (in eight different new developments)
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By price
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New = 14
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Sold = 23
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$500k to $999k
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3
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3
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$1mm to $1.99mm
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6
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6
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$2mm to $2.99mm
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1
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8
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$3mm to $3.99mm
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4
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3
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$4mm to $4.99mm
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2
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$5mm+
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1
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By neighborhood
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New = 14
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Sold = 23
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BatteryParkCity
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Chelsea
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8
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Clinton
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EastVillage
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Financial District
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2
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Flatiron
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5
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3
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Gramercy
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Greenwich Village
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1
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7
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Kips Bay
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Little Italy
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Lower East Side
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Murray Hill
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5
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Midtown West
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SoHo
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1
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1
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Tribeca
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1
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2
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TurtleBay
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Upper East Side
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Upper West Side
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WestVillage
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1
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New loft listings in new developments
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140 West 22 Street
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3
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11 East 36 Street
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3
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Sold lofts in new developments
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15 West 17 Street
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3
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3 West 13 Street
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3
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137 – 141 Duane Street
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1
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© Sandy Mattingly 2007
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Dec. 23, 2007 - irony abounds / NY Times on geography + internet
anybody else note this?
I another NY Times article on Thursday that made me smile (see December 21 fluff (dated fluff, in fact) from NY Times ‘styles’ / remember that rug?? about cowhide rugs being over), Silicon Valley Shaped by Technology and Traffic struck me as ironic.
Silicon Valley and physical environs are the physical place where so much work is done to create the virtual (on-line) world. This article is about how important the geographical proximity is to all this development, and the relationship between the many “local clusters”.
real people, close to each other
It turns out that in this most web-centered of worlds, physical location matters so much – and is so specific -- that different computer-related work is done depending on how close the work is to San Francisco in the north or to San Jose in the south:
hardware clusters — semiconductors, disk drives and network equipment, for example — are in the SouthValley, around San Jose and Santa Clara. … Moving farther north in the Valley typically means moving farther away from the guts of the machine and climbing up the tiers of computing — from chips to layers of business and consumer software and then into San Francisco, home to people with online advertising and digital design skills.
In Manhattan, there used to be sewing machine repair shops clustered around West 26 Street, off Sixth Avenue, and button and ‘notions’ in the high West 30s, west of Eight Avenue, when the Seventh Avenue corridor in the 20s and 30s really did center the fashion/needle trades. (As just one example.)
Funny how the same benefits of proximity and concentration matter to the internet world.
Silicon Valley, the wellspring of the digital technologies fueling globalization, is itself a collection of remarkably local clusters based on industry niches, skills, school ties, traffic patterns, ethnic groups and even weekend sports teams.
“Here, we have microclimates for wines and microclimates for companies,” said John F. Shoch, a longtime venture capitalist.
Silicon Valley, home of Stanford and other universities, has long been the model of success for a modern regional economy, and policy makers worldwide have tried to emulate it by nurturing high-tech companies around universities. There have been a few winners, like the semiconductor manufacturing hub in and around HsinchuSciencePark in Taiwan.
Yet a look at the microclusters within Silicon Valley demonstrates the business relationships, the social connections and the seamless communication that animate the region’s economy. It also suggests the human nuance behind the Valley’s success and shows why that success is not easy to copy, export or outsource.
“These microclusters turn out to be a very efficient way to innovate, to see what works and what fails, and do it extremely rapidly,” said AnnaLee Saxenian, an expert in regional economies and a professor at the University of California, Berkeley.
New companies, and emerging industry clusters, seek to build on and tap the skills of older clusters.
I take it as an argument for why cities matter, even if there are only a few sewing machine repair shops on West 26 Street, or only a few high-end photo processing plants on West 17 Street, or even if the West 47 Street diamond merchants get clustered in one large building. And even if the peninsula south of San Francisco is not a city.
There’s more opportunity for that human nuance to come into play when people are clustered, even if the people spend their time on computers.
© Sandy Mattingly 2007
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Dec. 22, 2007 - 149 Franklin contract / from Halloween to Christmas
buyers still buying
The 3rd floor at 149 Franklin Street is yet another one of those lovely lofts that I never got around to blogging about while it was live, so I will have to note it as it went into contract within 8 weeks of coming to market.
Asking $3.85mm and $1,933/mo (deductible? see below) for “3,150 sq ft” it is said to be “absolutely splendid” with high ceilings and “glorious” light. This is prime Tribeca, between Varick and Hudson. This is a wonderfully classic loft, with nearly 13 foot ceilings, original beams and wood columns. At $1,200+/ft in a no doorman-no-amenities small loft building, this is what Tribeca costs.
peculiar layout with challenges + opportunities
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.
Cool space. (What is the highly reflective floor material??)
The maintenance is low, at about $0.60 per foot and there is “a large amount” of income from the ground floor space. There’s no indication in the listing whether the maintenance is deductible, so it may not be.
Cool space, indeed. Large space. Only 3 interior photos (none of kitchens or baths), so it is hard to get a visual sense of the interior. I bet the buyer puts a ton of money into it.
© Sandy Mattingly 2007
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Dec. 21, 2007 - fluff (dated fluff, in fact) from NY Times ‘styles’ / remember that rug??
the zebra cowhide rug has lost its edge
I will never find my post unless by accident, but I clearly remember posting some months ago as an aside something like ‘what’s up with the animal rugs all of a sudden?’, after commenting about a rug in a ($3mm?) loft and a very similar rug in a ($900k?) loft.
The NY Times yesterday announced that I was not alone in commenting on the ubiquity of the zebra cowhide rug, in Flash in the Can, about design trends that “got up and went” in 2007.
The hot-then-out-now zebra cowhide rug is pictured here.
That made me smile.
© Sandy Mattingly 2007
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