Aug. 16, 2009 - Porter House loft may be "beyond the beyond" but sells off a million, up 40% or down 25%
context tells the story, but what's the context?
The Manhattan loft #3W at 66 Ninth Avenue (The Porter House) was marketed very enthusiastically at prices The Market was not ready for. It cleared on June 23 at $2.15mm, which is a difficult number to put in context. In the context of neighborly competition, it got killed. In the context of past sales, it has been up and down. But first, some listing history ....
This loft flirted (teased?) The Market for a few months in 2007, when they were asking $4.2mm. (Same firm, different agent.) When it came back to market in May 2008, they were asking $3.25mm and competing with the upstairs neighbors in #4W, who were then asking $2.85mm.
timing it right vs. timing it wrong
The #4W sellers hit The Market pretty much on the head: to market on May 7, 2008 at $2.85mm, in contract by May 21 and closed on July 3, 2008 at $2,787,500. It appears that the #4W sellers benefited from #3W's asking price of $3.25mm. By the time the #3W sellers adjusted to the #4W sale by dropping to $2.995mm on August 17, the Lehman was about to hit the fan....
#3W came off the market in November still at $2.995mm and returned in February at $2.495mm, but that horse had left the barn. It took another 11 weeks and a tough negotiation to find a buyer and contract at $2.15mm -- another 16% off the last asking price and a full third off the May 8, 2008 asking price of $3.25mm. (Not to mention, almost 50% less than the flirty asking price of the Summer of 2007.)
The May 2008 market may have had only one buyer for a "W" loft at The Porter House near $3mm, and #4W got that buyer. By Fall 2008, The Market had gotten noticeably thinner, though the fact that #3W was still priced above where #4W cleared did not help.
May 2008 market value = $1,435/ft
That #4W sale is as strong an indication of #3W's May 2008 value as one could hope to find. But it is not the only historical sale that is relevant.
February 2006 market value = $1,185/ft
The downstairs neighbors in #2W sold in March 2006 for $2.3mm. That unit came to market in November 2005, had a quick price drop, then sold at full ask off a February 2006 contract. That sale is a very good indication of #3W's market value more than three years ago, showing that #3W's $2.15mm clearing price was about 6% off of its February 2006 value. But wait ... there's more!
original value (2003) = $785/ft
I believe that The Porter House was the first great condominium in the northern Meatpacking District (is it any wonder that "noMe" did not catch on??) when it was completed in 2003. They took an old 6-story furniture warehouse and added a 4-story glass and steel extension that set back from 15th Street and cantilevered over the low building to the south -- a dramatic and much acclaimed addition. The "W" line is in the original part. From what I can see, the three "W"s discussed were in comparable condition.
how painful can a 40% gain be?
When the developers sold #3W in November 2003, they thought it was worth $1,522,284, or $784/ft for "1,942 sq ft". With that base price, the #3W sellers gained 40% by selling in June 2009 for $2.15mm what they had bought in November 2003 for $677,716 less (before expenses, of course). Granted they had hundreds of thousands of dollars slip through their hands as The Market shifted under them in 2006 - 2008, so they probably looked forward to paying much more in capital gains taxes than they ended up paying....
COUNTDOWN: 10 ... 9 ... 8 ... 7 ... 6 ...
© Sandy Mattingly 2009
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