Sep. 15, 2009 - loft developer in default at 654 Broadway

crunched by numbers
Not a pretty story reported in The Real Deal (last Friday, on line) about a Manhattan loft developer default, CIT Group sues for $12M at Noho condo site. I don't have a lot of any experience running numbers on a development project, but this seems like it was a tough needle to thread even when it was fresh.

It appears that the six-story building had been upstairs rentals (vacant?) when purchased by the developer in August 2007 for $12.6mm. August 2007 ... probably within 6 months of the tippy-top of The Market. Plan was to create five full-floor condo residential lofts and one commercial unit at street level. The building is awfully long, at 29 x 123 ft, and is shorter than both its neighbors along Broadway (i.e., not so narrow but very long, with no side windows). The only unit that I see that was ever marketed was the fifth floor, listed as "2,540 sq ft". That unit was offered at $2.95mm in a fully done condition ("the ultimate in downtown living ... and hi-end finishes throughout") from February into August; the listing has expired.

Using 2,500 sq ft per floor, that is 12,500 sq ft for the five residential lofts to have been developed; maybe the developer could have done them for $150/ft. That's nearly $2mm in construction costs for the five residential units. They did not sell #5 for $2.95mm, so the top of the resale recoupment is something south of $15mm. Maybe the plan here was to break even on the residential units and make dough on the commercial unit....

I have no idea what the value of a commercial condo is along this stretch of Broadway, but I suspect that it may have more value for cash flow (renting it out) than selling it. The coop next door at 652 Broadway has always had absurdly low maintenance because they own the store front: they generate nearly all of that building's operating costs from the rental stream. (The full-floor #2 at 652 Broadway was marketed in 2006 and 2007 as "3,300 sq ft" of raw space [I think it had been a sweat shop], with maintenance of only $548/mo -- barely 20 cents per foot.)

coincidence?
That raw 2d floor had been marketed since March 2006 and closed in December 2007 at $2.2mm, $667/ft. 654 Broadway Partners LLC closed on their purchase in August 2007 at $800/ft (using 2.500 sq ft per floor). It's gotta be the commercial income stream that made this (appear to) make sense, right??

In the event, no sense was made .... Somebody needs to re-set the sunk costs for this building to be developed. (I am pretty sure the retail tenant has been paying all along, but that is a wee small flow of cash.)


© Sandy Mattingly 2009

Aug. 11, 2009 - did a jazz fan or a muppet maniac buy Mingus's place at 5 Great Jones Street?

cue Cindy Adams
(That's for "only in New York, kids"....) The Manhattan loft #2 at 5 Great Jones Street was marketed for its character ("authentic artist" loft, 14 foot tin ceilings) and its provenance ("[o]nce the home of Jazz great Charles Mingus and the creator of Big Bird Kermit Love"). At "2,300 sq ft" on a peculiar block, I am not sure if the February asking price of $1.995mm included a discount for condition or a premium for provenance. Either way, the mild April drop to $1.85mm certainly did the trick.

All in, it took only 5 months from coming to market February 13 to closing July 8, so that April price (and/or the character?) (and/or the provenance??) worked to not only get a deal, but a deal at that price. With no comp sale data in this small coop (looks like 4 units) and a limited number of comparable buildings on this block it is hard to get a feel for values here. If anything, hyper-local sales (in)activity suggests that the Mingus-Big Bird connection (not Mingus and Bird) did well, comparatively, given that it sold.

There was a recent unsuccessful attempt to sell a "2,000 sq ft" loft that boasted a "timeless" renovation for $1.695mm ($850/ft) right next door at 7 Great Jones; mirrored by the equally unsuccessful marketing of a smaller 2-bedroom loft ("1,200 sq ft") next door on the other side at 3 Great Jones for $1.295mm (under $1,100/ft). These asking prices failed to generate a deal, but asking $804/ft at 5 Great Jones got a deal at $804/ft for an "authentic" artist loft. (Nothing says "primitive" for a Manhattan loft -- as in needs a total upgrade -- quite as elegantly as "authentic" artist loft.)

getting carried away doing The Google...
Back when the listing was new (in February, at $1.995mm), Curbed's funky Friday post included the Wikipedia info that Mingus got evicted from this place -- for firing a gun through his wall into a neighbor's apartment (but the Wiki info is not sourced).

Curbed did not report on any Kermit Love connection to this loft, but this NY Times obituary notes that Love not only built Big Bird, but also Mr. Snuffleupagus, Oscar the Grouch and Cookie Monster; he also played the role of Willy the Hot Dog Man. I don't know if the listing agent is right about this loft having a Kermit Love connection, but this book excerpt (see p 72) notes that Love had his puppet-making studio on Great Jones Street. Perhaps this loft is where Big Bird was born!

I am thinking it was bought by a Sesame Street fan....


© Sandy Mattingly 2009

Jul. 28, 2009 - didn't build it, but they came to 21 Bond Street at $692/ft

seek and ye shall find
Yesterday's post, if you don't build it will they come? buy + build opportunity, posited that $830/ft was not likely to get a deal done for a Manhattan loft that needed a build-out because other 'finished' lofts had sold (or not) at or around the current offering price. I closed that post with "I will have to find another buy-and-build to track to really test this limitation...." and did not have to look hard or long for another loft that better tests the degree to which selling a loft that needs a lot of work cuts into The Market enough to be a problem.

The Manhattan loft #3 at 21 Bond Street was sold this month (July 17, deed filed last Friday) as an artists's live/work loft in "bring your imagination" condition (no interior pix), and suggests that the limitation of a buyer needing 'extra' cash to fund a renovation -- like many -- can be "solved" by fans of Bill Cullen. For you folks too young to get that reference, that solution is The Price Is Right. At "2,400 sq ft", the clearing price of $1.66mm is (only) $692/ft and a mild 5% off the asking price of $1.75mm. The campaign was quick, as well as efficient, as this unit was first shown on April 8 and found a contract as of May 13. PDQ, indeed.

if greed is good, prudence is better
In the mental math Olympics that sellers have to play, figuring your buyer will have to shell out $200/ft to fill out your shell of a loft is a prudent way to assess value. If these sellers were at those Olympics, they were estimating a post-build value of around $900/ft for their not-yet-built-out loft.

The neighbors next door at 19 Bond Street found out -- much to their dismay, no doubt -- that The Market for a loft sold with the come-on of "potential" in this micro-nabe ("open square layout is very functional and has tremendous potential ") had dropped 14% in a year, in their case to about $1,000/ft. I hit that loft and its May 2009 and April 2008 clearing prices, #2 at 19 Bond Street, on May 22 in perfectly bad timing for 19 Bond Street to flip. (We show that loft as "1,400 sq ft", though it has been listed at different sizes, as you will see, but "1,400 sq ft" yields just over $1,000/ft for the April 1 clearing price of $1.457mm.)

The neighbors just down the street at 1 Bond Street #2D also found a clearing price around $1,000/ft, but their smaller loft ("1,205 sq ft") was "impeccably designed" and nine-times published when it sold in April at $1.195mm after what must have been a frustrating marketing campaign. That small-but-impeccable loft had been offered in September at $1.75mm (just after the Lehman hit the fan) and suffered 3 price drops and a 14% discount from the last price.

the ambiguity of $1,000/ft on this block
The two April 2009 sales at 1 Bond Street and at 19 Bond Street at around $1,000/ft posed a bit of a challenge to the sellers of 21 Bond Street #3 when they came to market. As noted above, one infers that their mental math Olympic calculations back out to an implied market value for their buy-and-build loft of around $900/ft if renovation costs were $200/ft. The disappointed neighbors at 19 Bond Street #2 did better than that for a loft sold with an appeal to imagination, while the disappointed neighbors at 1 Bond Street #2D did better than that, but they sold a magazine-worthy loft. It may be that the corner-of-Broadway location of 1 Bond Street deserves a market discount that the mid-block buildings at 19 Bond and 21 Bond don't get (a careful reader of StreetEasy might get that impression about 1 Bond Street). Presumably, the 21 Bond Street #3 sellers had these considerations in mind when they started selling in April.

Prudence, meet Bill
With 21 Bond Street #3 clearing quickly off an asking price of $730/ft, it is clear that these sellers made the right call. Asking $1.75mm for "2,400 sq ft" allowed room for renovation costs and generated a very quick contract and closing at $692/ft.

In other words, the 21 Bond Street #3 sellers were prudent, Bill Cullen is a useful icon for Manhattan real estate even in this market, and the need to renovate a loft is a limitation in the current market -- but a limitation that is manageable through prudence. (At least, it was in this instance.) I will keep an eye out for other examples of how this need-to-renovate plays out, though I don't expect to find another one tomorrow.

Jun. 29, 2009 - what a difference a year (and a view) makes, as 161 Grand Street closes

then v. now, spectacular v. move-in, view v. not-so-much
The Manhattan loft #4B at 161 Grand Street closed last week for $1.71mm after a relatively brief (successful) campaign. This "1,831 sq ft" "beautiful and spacious" loft was marketed as being in "move-in" condition -- a relatively modest description for a unit with marble baths and "top of the line" kitchen, but that is what they said.

They started to market January 15, asking $1.9mm, dropped to $1.795mm on St. Patrick's Day and found the contract 2 months later that closed last week. The $1.71mm clearing price represents exactly 10% off their January starting point, and $934/ft, all of which are pretty reasonable seller outcomes these days.

This relatively modest description and relatively modest price contrasts significantly with the July 2008 sale of #9A. That "1,800 sq ft" loft was billed as "spectacular", with a "magnificent" entertaining space, chefs kitchen and "extraordinary" skyline views (including of the Police Building, just down the street). The Market loved that loft, as it cleared in July 2008 at $2.75mm, having come to market in April at $2.9mm and finding a a contract in 2 months. That computes to $1,500/ft.

is it The View, Mars?
I can only speculate about the difference between these two sales of similar sized Manhattan lofts in the same building 11 months and seven figures apart. #4B claimed "great city views east and west", but 60 or more feet higher #9A had those "extraordinary" views. The #4B layout is too stubby to be a Long-and-Narrow, but presents only 7 windows, while the corner layout of #9A has not only twice the windows (15) but each room has at least one long wall of windows (the corner LR / dining space has two). I have to guess that #9A's finishes were to some degree at a higher level, but it is hard to imagine that difference was terribly significant in light of the proper proper names invoked at #4B. The obvious calendar differences between contracts reached in June 2008 and May 2009 are significant, but June 2008 was already post-peak (though pre-Lehman).

Why was #9A 50% more valuable than #4B? Using a (generous) ballpark of 20% as the local market decline for a non-prime loft micro-nabe (sorry, Police fans) and 5% for the finishes, it has got to be the layout, the windows and the views that account for the largest part of the #4B vs. #9A differential. At this order of magnitude, somebody paid $500k for a better layout with more windows and great views. Interesting....

May. 22, 2009 - perfectly bad timing for 19 Bond Street to flip

in this one of the 8 million stories, June 2008 less 14% = April 2009
The Manhattan loft #2A at 19 Bond Street is one of those poster children. In fact, it is at least two of those poster children. The first poster is captioned The Height of The Market; the second caption is Getting Out With Whatever You Can Get.

When this "quintessential" loft  zoomed through the market last year, it took all of three weeks to find a contract above the asking price. (To market on April 2, 2008 at $1.65mm; contract as of April 23 at $1.72mm; closing June 12.) They were then selling this "1,300 sq ft" loft for its potential ("[w]ith the right amount of love this magnificent space can become a dream home") and the light.

Something bad happened to the April 2008 buyers, as they brought it back to market in November, still selling potential ("open square layout is very functional and has tremendous potential ") -- and 367 more square feet (same agent; maybe they bought a new ruler??). But something bad (from their perspective) had also happened to The Market by November. Having bid over the April 2008 asking price of $1.65mm, these buyers-turned-sellers put it back at that same price -- $1.65mm. One price drop later (January 6, to $1.56mm), they found a contract by February 27 and closed on April 1 for $1.457mm (no fooling).

The quintessence, indeed! Times two.

 

Apr. 27, 2009 - price of 'museum quality' in Noho = $1,000/ft / 644 Broadway closes quickly

no dithering here
In the (entirely fictional) Manual of Style for real estate agents, the phrase "museum quality" is used because (I guess) "quadruple mint" just does not zing. (The fact that few people actually want to live in a museum may mean it is used ironically, but the phrase is probably used because it sounds impressive, logic be damned.) The Manhattan loft #2E at 644 Broadway hit the market in December for $3.995mm boasting of a "museum quality renovation" plus classic loft features, such as 12 foot ceilings and rather large wood-framed arched windows.

The loft is described as both "3,600 sq ft" and "3,400 sq ft" in the listing text (the higher number) and the listing "Essentials". Using the smaller size, that asking price was $1,175/ft, seemingly aggressive post-Lehman pricing in a neighborhood in which mere 'triple mint' lofts with views and light have sold in the range of $1,000/ft (such as #3E at 684 Broadway, a "3,100 sq ft" loft that was "renovated to perfection" and closed at exactly $1,000/ft in April 2007; the more recent sale of #7E in that building was under $1,000/ft, and was discussed as a new listing on Manhattan Loft Guy on October 4, 2007 and as a 'sobering data point' when it sold, on September 24, 2008). Seemingly, they were asking a premium for the museum stuff in #2E at 644 Broadway.

price is right, after all
The goal in setting the asking price is to attract serious bidders with whom one negotiates the best deal available. In this case, that worked, as the seller got a contract within a 40 day period that included Christmas and New Year's. But the price worked because the seller was negotiable, ending 14% off that asking price, at $3.45mm. If it is a "3,400 sq ft" loft, that's barely $1,000/ft; if it is larger, that's under $960/ft.

note to editors
If ever someone writes that Manual of Style for real estate agents, there should probably be a prohibition against describing someplace as the "heart" of two neighborhoods, even if one is arguably a sub-neighborhood of the other. As an example of prohibited usage, they could refer to "in the heart of NoHo/Greenwich Village". They should also prohibit quoting two different figures for the size of a loft (as here), or two different ceiling heights (12 feet or 16 feet; also, as here).
 

Apr. 14, 2009 - 10 Bleecker remarkable space holds value remarkably well

Nov. 13, 2008 - 716 Broadway closes after (count 'em) 126 weeks

to brag, or not? and about what?

The Manhattan loft on the 2d floor at 716 Broadway boasts of many things: views of Washington Square Park, 13 foot ceilings, "huge" private terrace, and mahogany woodwork. They may not be bragging about having taken 126 weeks to sell, but perhaps they should be.

I am so impatient about this developement in a loft I have been following for years that I will post now with what I know, even before gettng to the punch line -- the clearing price is not yet available in city records [updated below]. But let's jump in....

radical patience

Between June 25, 2006 and November 11, 2008 the sellers here used two different PruDE agents and a narrow range of prices for the "2,800 sq ft" (or is it "2,400 sq ft", or "2,600 sq ft"??) loft. They started three Junes ago at $2.995mm but dropped within 4 months to $2.65mm; they took much of the summer of 2007 off (off the market from mid-July to mid-September) and changed agents (but not firms) in March 2008, before dropping to $2.575mm in June. A contract was signed before Labor Day and the sucker has finally closed.

You can see some of the history, and the ... uncertainty about size on the StreetEasy page for this buidling, here. You will also see on that StreetEasy page why the sellers might be bragging afterall, torn calendar pages notwithstanding: the November 2008 sellers who started their careers as sellers in June 2006 had only just bought the place in May 2006 -- for $1.85mm.

a long MLG history

You can see the history of this loft on this blog from January 11 (716 Broadway has another birthday loft) and from when I hit it in a riff about seasonality of the Manhattan real estate market on September 19, 2007 (hope falls eternal? 716 Bway is back) -- way back when I used to regularly comment in new loft listings. The January 11 post was one of a series I did on lofts in this "NYU Corridor" of Broadway, including about the 2d floor loft at 710 Broadawy referenced in that post.

the tide rose?

As I said on January 11 about these two neighboring, maturing loft listings:

that patience, revisited

As noted above, they were asking $2.65mm in October 2006, and they hung on there for 20 months before signing a contract off an asking price of $2.575mm. That is a simply remarkable length of time to be (technically) a "seller" without adjusting the price significantly ($90k off $2.675mm does not qualify as "significant").

Have you seen that poster of a kitten hanging from a line ("hang in there")? I will now think of this loft whenever I see that poster.

I am guessing that the tide did not rise, but that the sellers came down in a tough negotiation more than they were willing to signal to The Market through another price drop. (How else to consider 20 months of not-selling??) Can't wait to see how wrong I can be...

[update 12.12.08: deed filed November 10 at $2.45mm is now on-line, so they hung on to get 92% of the October 2006 asking price -- that is some patience -- or 18% off the Juen 2006 original ask]

Mar. 21, 2008 - redemption week? 57 Bond also in contract

Mar. 13, 2008 - 30 Bond new on hot block / how hot a renovation?

Feb. 20, 2008 - sun floods, contract follows at 39 Great Jones

the well-priced loft sells ...
... quickly. As usual.

The Penthouse 6 at 39 Great Jones Street came to [the Manhattan loft] market just over 4 weeks ago, asking $2.675mm and $1,600/mo for "2,235 sq ft" of "authentic duplex penthouse" that "sun floods". The Market liked the sun, or the "superb" kitchen, or the location, as it is now in contract. [updated below]

scissor duplex
The duplex floor plan is unusual in that the upper floor faces (mostly) south and the lower (bedroom) floor faces (mostly) north, such that very little of the upper part is directly on top of the lower part. (This makes sense if you look at the floor plans and note the interior stair locations on each floor.) The only other loft building I know that has scissor duplexes like this is 22 West 26 Street.

did the sun do it?
#2 sold here last May for $2.5mm after a short time on the market (3 weeks to contract) at $2.295mm and $1,600/mo for "2,400 sq ft" (it is a full floor loft). That one was marketed as (hold your breath here) "exceptional and authentic", "gut renovated ... from an artist's perspective", and "[u]nlike all the other designer lofts, this one is actually unique and without equal". That prose is from the Steinberg-Senequier at PruDE (who know their lofts), so I gotta believe that one had nicer finishes than the Penthouse, but not as nice light or sun. One year later, and 4 floors higher, the Penthouse succeeded off a higher price than the 2d floor.

props
Tip of the hat to Glen Norrgard and John Tenore of Stribling for finding the price point and marketing plan to attract a (relatively) quick contract.

[Update 12.12.08: the deed was filed on April 2 at $2.6mm -- a 97% solution]

(C) Sandy Mattingly 2008
 

Feb. 12, 2008 - long time comin’ / contract at 714 Broadway

Jan. 30, 2008 - 718 Broadway in the news again / #10C is back, beefier

not new, exactly, though more
718 Broadway #10C showed up as a new listing yesterday, asking $1.295mm and $1,486 for “1,400 sq ft” of “real NoHo loft with sunlight, dramatic city views, and 12 foot ceilings”.

This unit and this building both have some history. In fact, I have hit this building three times before, having been fascinated by some sales history, some problems with rulers, and one magnificent minimal loft that I could not live in but that is for sale for the second time in a year.

There’s only one picture and a floor plan for #10C up on PruDE’s site now, which is a bit peculiar because I remember there being more photos when this same agent was selling this same unit from January to April 2007 (ask was $1.25mm then); the inter-firm history shows a contract having been signed in April 2007 but no other activity until coming back as “new” yesterday (obviously, that didn’t close).

challenging footprint
The Long-and-Narrow layout provides some atypical Long-and-Narrow challenges. Both very large windows are at the front (providing “22 feet” of eastern exposure), so most conventional configurations would put sleeping areas away from the windows (as here, with the present single bedroom). The plumbing Is on the opposite narrow wall, where the kitchen and the (single) bath are squeezed between the front door and the wall; adding a second bath (if it can be done at all) may be a challenge and would probably require erasing the bedroom and starting over.

history
#11C was marketed for five months a year ago at $1.575mm without selling. That listing description was modest about the finishes and did not mention any renovations except prospectively (“these [2 bed]rooms can easily be reconfigured or removed …”).

#3B had a bit of an odyssey, completed with a closed sale 3 weeks ago at $1.2mm, for “1,400 sq ft” with nothing interior to brag much about. How’s this for an odyssey? It was on the market for all but 7 months from November 2004 to December 2006, with 3 firms and 7 price changes between $1.35mm to $1.175mm; the last offering price was $1.24mm, from April 2007 until the contract in October.

This same agent offered #6C for sale last summer at $1.2mm with some bragging (about marble, tile, counters, concrete floor, and a Viking range). That shows as sold in our system as of October, but I don’t see that transaction in city records.

#2C is that magnificent minimal loft, and it traded at $1.325mm in May to buyers who changed their minds: it has been for sale again for 10 weeks.

a fave for MLG
It is that loft the piqued my interest in the building, as I saw it and two other very different neighboring lofts that were on the market at the same time, leading to my post on November 8, 2006: comparing lofts and lofts ain't so easy / 718 Broadway as lab, which compared #2C, #2A and #3B.

In turn, that post caused me to look at the building sales history to try to make some sense of it all on November 9, 2006:more rich data and 'comps' / 718 Broadway sales history (it didn’t work).

With that prior interest in this building and in #2C in particular, I was floored when #2C came back to the market so soon after selling in May 2007 for $1.325m. The resulting post (November 9, 2007: a mistake, perhaps, as 718 Broadway is for sale again (not bloody likely)) reflects that I was totally freaked out that the May buyers became November wanna-sellers at $2.125mm (the price has since been dropped to $1.95mm, which – at this scale – Is no less freaky to me). Note especially that #2C seems to have grown with the new price in November.

visiting with other neighbors
Faithful readers will realize that I have spent a fair amount of time on this long block of Broadway already in 2008. I hit 716 Broadway on January 11 (716 Broadway has another birthday loft) and 710 Broadway on January 9 (710 Broadway is slimmer after holiday break). Both of those posts dealt with very mature listings and show that even a price under $1,000/ft may not be attractive enough to seal a deal on this busy busy busy block.

back to #10C
If you visit #10C, before to ask about any plans to develop the parking lot to the east. I don’t know if that is a factor in this loft not selling last year when offered at $1.25mm, or if it was the amount of work people anticipate having to do after buying it.


© Sandy Mattingly 2008

Jan. 12, 2008 - wheel stopped spinning / contract at 704 Broadway after a million weeks

Jan. 11, 2008 - 716 Broadway has another birthday loft

Jan. 9, 2008 - 710 Broadway is slimmer after holiday break

Jan. 7, 2008 - 57 Bond back on market / still pushing (new) neighborhood values

Nov. 9, 2007 - a mistake, perhaps, as 718 Broadway is for sale again (not bloody likely)

Nov. 6, 2007 - 48 Great Jones goes to drama school / major price drop

Oct. 31, 2007 - re-setting values at 57 Bond / there goes the neighborhood