Dec. 31, 2008 - looking for walk-aways by testing the hypothesis that buyers can't close / the lab at The Caledonia, 450 West 17 Street

yes, still beating on The Real Deal

Can you tell yet that I am still frustrated about The Real Deal article that linked two related-but-vastly-different premises? Here's (still) more....

Without having access to actual sales directors of actual new developments that are actually closing these days (unlike Michael Stoler in The Real Deal), I figure that one way to check to see if 10% of buyers are unable to bring enough cash or a bank with them to closing is to look at actual sales data in our listing data-base (cross-checked against StreetEasy) for actual closing and back-on-the-market activity.

closing at The Caledonia

I started with The Caledonia at 450 West 17 Street because I happened to note a recent Manhattan loft closing there and was curious about the building as a laboratory to check The Stoler Hypothesis about walk-away buyers. The Caledonia turns out to be a terrific Manhattan loft laboratory because there is ample rich data, though nothing is totally up-to-date without having access to those actual sales directors who can explain what is behind the numbers.

No discussion of actual sales and listing data would be complete without a Manhattan Loft Guy rant about the limits of data, so here is today's edition of that rant: I looked at the information reported in our inter-firm data-base, then cross-checked that against StreetEasy. The two data sets conflict, of course. Directionally, it appears that StreetEasy has more up-to-date data, which of course irritates me, no end.

actual data

It appears that the earliest contracts were signed for this high profile High Line project, and that closings began in August. Since then, looking first at the inter-firm data-base, then at StreetEasy:

45 closed; the StreetEasy building page (here) says 75
10 active (some are resales); StreetEasy says 13
48 contracts have not yet closed; StreetEasy says 34 are pending

3 apparent walk-aways
#1701 contract signed October 2006, back on market June 2008 (well before Lehman bankruptcy)
#1112 contract signed July 2008, back on market December 14
#1104 contract signed March 2007, back on market (at higher price) December 21

big hole in the data

As far as quality information is concerned, the good stuff is in that signed-but-not-yet-closed group of 34 or 48. The Related Companies sales people know if any of them are in danger of not closing, or if closings have been adjourned to permit buyers to try to drag money together or sell / assign their obligations. StreetEasy shows 15 deeds filed in December (so far) and 22 in November, so the number of pending contracts should shrink pretty fast. By the end of January we will have a much better idea if the Caledonia sales history supports The Stoler Hypothesis about 10% or more buyers walking away from contracts. Or not.
 

© Sandy Mattingly 2008  

Dec. 30, 2008 - Manhattan lofts for sale = 822

Number of Manhattan lofts offered for sale as of Sunday night: 

This is down 18 in a week, while up (only) 130 since my recorded low in mid-August.

See my May 19 post for what I am counting, and why it is difficult.

© Sandy Mattingly 2008

Dec. 30, 2008 - quick work at 139 Reade Street / 11 weeks from list to artistic close

taking advantage of the Fall market

How's this for a quick sale? The Manhattan loft #3B at 139 Reade Street came to market on September 28 at $2.875mm and found a contract within six weeks, then closed in another 4 weeks. In any market it could be considered quick work to bank your cash 11 weeks after coming to market. In the brave new world of The (current) Market, that is awfully good.

2 very different buildings, one condo

This building is the 5-story component of an unusual 2007 Manhattan loft condo conversion, Artisan Lofts, along with the neighboring 17-story 143 Reade Street. The shorter building shares the amenities next door, but appears form the title histories to have been a separate condo formed in 1994. In 2007, it looks like it became a legal part of the new condo including 143 Reade Street (looks as though 143 Reade had an old address and entrance on Chambers Street; did they incorporate the lobby of 139 Reade as the lobby of the new condo??). The result would be 5-stories of 'classic' Tribeca lofts (with all thevariety of finishes and layouts in such a building) attached to 17 stories of brand new "loft" spaces.

Unit 3B is "2,175 sq ft" set up as 3 bedrooms plus media room in a relatively stumpy Long-and-Narrow footprint (roughly 35 x 70, so not so long or so narrow), but with the classic windows at either end and all plumbing in the middle (on both sides), including the proverbial gourmet kitchen. As part of a new development, amenities include concierge, gym, roof deck and "Children's Imagination Center" (which undoubtedly includes more than a box with old clothes in it). These sellers had been here at least 14 years, but I can't tell when they renovated.

no premium here; curious...

The deed was dated December 12 for $2.5mm so the seller quickly took a 13% discount to get the price available in The Market ($1,149/ft, in this case). Props to them for getting out quickly (11 weeks!) and for being nimble enough to drop 13% to make a deal.

You'd think the values in this 5-story building would reflect access to the amenities in the 17-story uber loft next door at 143 Reade Street, wouldn't you? Looks as though you'd be wrong. The last sale I see at 139 Reade was #4A, which is said to be "1,900 sq ft" but I don't have any information about its condition, or the marketing that resulted in its sale in June 2006 (7 months before the deal with the Artisan Lofts developers and the amenities upgrade) at $2.2mm -- $1,157/ft. Or, if there is a premium for having access to The Amenities (as you'd expect), you can't see it anymore because of shifts in The Market from June 2006 to December 2008.

© Sandy Mattingly 2008

Dec. 29, 2008 - facts v. hype / testing the thesis of "little or no sales activity"

still beating on The Real Deal

I unloaded a bit recently on The Real Deal article that linked two related-but-vastly-different premises. Here's more....

The teaser early line from that Michael Stoler piece was:

So ... it is hype to say that

are taking place because the truth is that there's been little or no

. Let me offer some more hype, then.

Looking only at sales of Manhattan lofts (as in transactions reported as Sold & Closed), on average since mid-October 2007 (when I started counting this stuff) 18.93 Manhattan lofts have closed each week. Here are the weekly average closing, reported by month since June:

I don't have long enough data (yet!) to know what the seasonal trends are, but October 2007 through January 2008 were hardly barn-burner months for closed Manhattan loft sales (I have only data from the last two weeks in October 2007):

Again, I am

arguing that market activity continues at the same pace as Before Lehman (which filed for bankruptcy protection on Sunday, September 14), just that it is not "hype" to say that "sales are taking place", at least in the Manhattan loft market (and probably in the overall Manhattan coop and condo market). Looking back to that article in The Real Deal, it may well be true that fewer

are being signed recently in new developments, just that smart people like Michale

and industry rags like The Real Deal should be able to provide data to support claims about trends -- and should know enough to keep as

the

things of contract signings and closings.

© Sandy Mattingly 2008  

Dec. 28, 2008 - new Manhattan loft listings + closed sales in last 7 days

 
This is my sixty-first 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.

The stats as of Sunday night:

• there were only 8 Manhattan lofts reported as new to the market in the last 7 days and only 9 as sold, in (perhaps ... probably) the biggest turkey of a week all year
• 6 of the 8 new ones are offered between $1mm and $3mm, while 8 of the 9 closed sales were between $1mm and $2mm
• NONE of the 8 new loft listings are in new development, while 4 of the 8 closed sales are in new development
  
  

  By price	New = 8	Sold = 9
  $500k to $999k
  $1mm to $1.99mm	3	8
  $2mm to $2.99mm	3	1
  $3mm to $3.99mm	1
  $4mm to $4.99mm
  $5mm+	1

  
  

  By neighborhood	New = 8	Sold = 9
  Battery Park City
  Chelsea		1
  Clinton
  East Village
  Financial District	2	1
  Flatiron
  Gramercy		1
  Greenwich Village	1
  Kips Bay
  Little Italy
  Lower East Side
  Morningside Heights
  Murray Hill
  Midtown East
  Midtown West
  SoHo	1
  Sutton Place
  Tribeca	2	1
  Turtle Bay		1
  Upper East Side
  Upper West Side	1	3
  West Village	1	1

• 
  
   
• New loft listings in new developments

• none

   
• 
  
   
• Sold lofts in new developments 

  
  

  420 West 25 Street (Loft 25)	1
  243 West 60 Street (Adagio 60)	3

  
  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. For my rant about how soft this data may be, see loft or not? caution: active ranting ahead.

Dec. 27, 2008 - disconnect: dumbest article ever? (not saying market is not tough, but ...)

not THE dumbest EVER, but ...
Curbed linked this week to a Real Deal article by a smart Manhattan real estate guy (really) that does not make much sense. I am thinking it has got to be the editing, rather than the writing. (Before posting this I came to my senses: there are so many truly stupid articles that would qualify as The Dumbest long before this one, this one won't make even a Top Hundred list.) But I still think they dropped a paragraph or two; they certainly left out a thought or two.

The thrust of the article is that few actual closings are actually taking place these days, because buyers are walking away or delaying the close to get their mortgage money together (or not). It's not that I don't believe this thesis; it is that they don't deliver news (facts). Here's a teaser early line:

But the first hint that there's an ... intellectual ... problem comes in the next line, and the one following (

is mine):

... there are

"

sales" in buildings that are not complete (or

complete, and have a Temporary Certificate of Occupancy). It has nothing to do with making "

headway". (New developments tend to close floor-by-floor, as

are issued serially.) The anonymous MD of a leading firm was probably not talking about "closed sales" but about "contracts", of which there

be few and far between.

The next line in the article

a real nugget, and I would love to hear more details about this -- this is (would be) really informative:

Sorry ... but saying (1) that closings are few and far between, and then saying that 10% of closings don't take place is a little ... jarring, without a bridge. (

of deals closing is not consistent with

.) Sorry (again), maybe i just expect too much (especially from [actual] experts such as Michael

).

probably does talk to enough people on the front lines -- lawyers, title companies, lenders -- to have interesting and fact-based things to say on this topic. I just wish he had.

I would love to hear real data about the number of people who can't drag enough cash to a closing to take title, but in the meantime I will just stumble along with my Manhattan loft anecdotal stuff (about developments such as 15 East 26 Street as an exception, for example; December 26:

). But the Real Deal article is talking about two related but very different things: (1) how many buyers who are contractually obligated to close on X date walk away (or postpone), versus (2) how many buyers are signing contracts now to close at some future date when (if?) the developer finishes the darn building. The General Terrible Local Economy might impact both of these things, but they are at very different stages in the marketing of new development.

Michael

knows that. The Real Deal knows that. (Curbed probably knows that; some of its readers ...

.) It does not read well, as written. Bah, humbug.

I know a guy involved in lending to A Brand Name New Development, whom I ask (every time I see him) about People Walking Away. There's never enough data in his responses to present in an interesting (informative) way, so you have never heard about it. Usually (most often he says something like, "most closings are happening"  but I have never pushed for data (let alone quotable data) about how many are delayed or canceled. So I was really disappointed by this garbled thing from Michael Stoler printed in The Real Deal.

© Sandy Mattingly 2008 

Dec. 26, 2008 - bringing (a lot of) cash to closing / news from the top of the market at "Madison Square North"

waiting to close, not for contract
I realized when I did my post of 30 days of actual loft sales on December 18 that 15 East 26 Street (15 Madison Square North) was a very successful new Manhattan loft development, with many contracts signed quickly in 2006, some of which are just closing now. Last week PH-B was reported as closed there off the $9.6mm asking price (dded was filed dated December 9 for the full asking price, typical of this building's sales). While the contract was signed on November 21, 2006 (after 4 months on the market), it is now somewhat newsworthy when a big one like this actually closes.

In fact, when I confirmed some details about PH-B in our listings data-base I noticed that PH-D also closed recently (with a December 9 deed, for $5.8mm). That listing history is a little weird: offered at $5.5mm on February 14, 2007, we show an accepted offer off an asking price of $5.8mm on April 7 but no contract signed until November 21, 2007 (just a delay in reporting, most likely). Again, they got the full ask (apparently enhanced) here, as is true of all the 15 Madison Square North sales that i have noticed. This unit is "3,402 sq ft" plus a terrace, with only north views (from the 20th floor); #PH-B is "4,766 sq ft" with north, south and east views but no terrace (alas).
 

© Sandy Mattingly 2008  

Dec. 24, 2008 - NY Times highlight 142 Duane St sale, mis-counts weeks, omits land lease info

garbage in, garbage out?

The problem with relying on the NY Times sometimes for accurate information about Manhattan loft sales is that the Times has to rely on (shudder) real estate agents to supply "facts". That can lead to errors and omissions, as they say. Take the sale of #3B at 142 Duane Street reported in this past Sunday's Residential Sales Around The Region. For one thing, it was on the market longer than the 20 weeks reported, whatever theory of counting you use; plus (if our listing data base is correct) you'd never know from the Times (or from the listing agent descriptions, for that matter) that this coop does not own the land the building sits on.

Here's my quick-and-dirty on this loft, from an open house review I did on January 11 when it was a brand new listing:

$1.95mm and $2,290/mo for “1,650 sq ft” with 14 foot (tin) ceilings; nearly square with only one wall of windows, so flexibility is limited; set up as a 2 bath 1 Bed Wonder, with fireplace and balcony

With a  deed dated October 3 (for $1.75mm, as the Times correctly reports), a listing history showing a contract as of July 30 off a (reduced) asking price of $1.895mm (as the Times correctly reports), and an original listing date of January 9 (then asking $1.95mm), I don't see how you get "20 weeks" on the market, as the Times reports (incorrectly, no doubt based on information supplied by one of the agents involved in the sale). From January 9 to July 30 is more like 29 weeks (total time to contract); from the May 27 price drop to July 30 is only 9 weeks (using the Miller Samuel way to count 'days on market').

so what?

A small point, perhaps, this discrepancy about the Times reporting 20 weeks on the market, but it is an example of the risks of relying on agents to provide accurate information (even in the inter-firm data-base). Feh...

not buying an interest in land
It is probably unfair to criticize the Times -- or even the agents -- for not reporting that this coop does not own the land underneath the building. (Assuming that our data-base is correct; see below.) That is typically revealed (to those to whom it would be a surprise) at the offer stage or in negotiations. It would be bad form, as well as counter-productive to a negotiation, to leave this important datum to be discovered only in due diligence.

a nasty rash you've got there

There are not many land lease buildings out there (outside of the unique situation of Battery Park City, nearly all are coops rather than condos) and some lawyers I know will counsel a client to never buy in a land lease building. Here's a colorful attorney quote from a NY Times article from 1998 (the article has an excellent overview of the issues with land leases):

''Owning a co-op with a ground lease is like having a chronic rash,'' .... ''It's not going to kill you, but it's always there and it sure can be irritating.''

A 1987 NY Times article talks about a land lease having more (negative) impact on value in a tough market than in a strong sellers market. (That article estimates that in 1987 there were about 50 coops that did not own the ground, with another 1 or 2 such coops "created each year"; undoubtedly that 'trend' slowed or stopped as fewer coops of nay kind were created in more recent years.)

looks like a land lease

If I am reading the city property records correctly, this document from 1999 (when the coop was created) is a sponsor-entity assignment of its interest in a lease including the land under 142 Duane Street to the new coop corporation. I may have missed it, but I don't see any records indicating that that lease has been sold to the coop or otherwise abrogated.

another sorta recent sale in the building

#4A closed in this coop about 2 weeks before this one. That one was on a faster track than #3B: it came to market May 21 at $2.35mm and found a contract just before #3B did (July 19). Interesting that the clearing price for #4A of $2.15mm was nearly exactly the mid-point between the asking price and the sale price in August 2005 ($1.955mm; a slight premium over the then-asking price). That one was said to be "2,000 sq ft" of "Old World detail [that] meets seamless Modern Luxury". (THX StreetEasy; here.)

one happier neighbor?

Both sellers should be happy they sailed through the sales process, of course. But with #3B getting $1,060/ft at pretty much exactly the same time that #4A got $1,175/ft, OOPS one Manhattan loft seller is just a little bit happier than the other.

[update 1.6.09, after noting my simple + obvious math error above:

2 happy neighbors, 1 efficient market

© Sandy Mattingly 2008  

Dec. 23, 2008 - Manhattan loft inventory as of December 21 = 840

Number of Manhattan lofts offered for sale as of Sunday night: 

This is down 15 in a week, while up 148 since my recorded low in mid-August.

See my May 19 post for what I am counting, and why it is difficult.

Dec. 22, 2008 - new Manhattan loft listings + closed sales in last 7 days

 
This is my sixtieth 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.

The stats as of Sunday night:

• there were 17 Manhattan lofts reported as new to the market in the last 7 days and only 8 as sold, in yet another (very big) turkey of a week
• 9 of the 17 new ones are offered between $1mm and $2mm, while 4 of the 8 closed sales were between $1mm and $3mm
• all 6 of the 17 new loft listings that are in new development are in the same new buidling (love the name, The Deuce), while 3 of the 8 closed sales are in new development
  
  

  By price	New = 17	Sold = 8
  $500k to $999k	2
  $1mm to $1.99mm	9	3
  $2mm to $2.99mm	1	1
  $3mm to $3.99mm	2
  $4mm to $4.99mm	2	3
  $5mm+	1	1

  
  

  By neighborhood	New = 17	Sold = 8
  Battery Park City
  Chelsea	1
  Clinton	6
  East Village	1
  Financial District
  Flatiron		1
  Gramercy
  Greenwich Village	2
  Kips Bay		3
  Little Italy
  Lower East Side	1
  Morningside Heights
  Murray Hill	1
  Midtown East
  Midtown West
  SoHo	1
  Sutton Place
  Tribeca	2	3
  Turtle Bay	1
  Upper East Side
  Upper West Side		1
  West Village	1

• 
  
   
• New loft listings in new developments

• 543 West 42 Street (The Deuce)

  6

   
• 
  
   
• Sold lofts in new developments 

  
  

  15 East 26 Street (15 Madison Square North)	2
  243 West 60 Street (Adagio 60)	1

  
  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. For my rant about how soft this data may be, see loft or not? caution: active ranting ahead.