Apr. 10, 2011 - 101 Warren Street resale makes news without being new

the greying of The Old Grey Lady continues
Do people think that the regular Sunday New York Times real estate section feature Residential Sales Around The Region features recent sales? I bet they do, though to be fair to the Times it does not use a word like that anywhere. I should thank the Times for today featuring a Manhattan loft sale that is worth mention, because I failed to mention it way back when it sold.

The most interesting thing about the Manhattan loft #1510 at 101 Warren Street is not that it sold (as reported) after finding a deal in 2 weeks (although it did), or even that those were the first 2 weeks it was on the market. No, the reason I am grateful to the Times for mentioning this ancient sale is what I learned after checking out the first time this loft sold.

I will try to get the snark out of the way quickly and cleanly. The sale that the Times presents on April 10 as though "news" closed on January 7 (deed filed January 27, so they can’t blame an unusual delay). The sale is (and has been) on Master List of Manhattan Lofts Sold Since November 2008, with the prior history I wish I had highlighted when it was news.

Conventional Wisdom confounded
Given the swings in the overall Manhattan real estate coop and condo market, from Froth to Peak to Lehman to Winter to Thaw to (whatever we have now), it has been an article of faith that lofts that sold in 2008 will still be underwater for a while, and that that is especially likely for new development lofts bought from a sponsor in late 2008. Thanks to the Times today, I went back to the history of #1510 to see when it sold for the reported $4mm (January 7, as noted above) but also for its earlier history. Thus focused, I was surprised to see that it was bought from the sponsor for $3,701,338 on November 24, 2008. That 8% premium that may surprise some other people, not just Manhattan Loft Guy.

attention must be paid, some times
Had I paid attention to the #1510 sale when it was actually “news” I might also have noted that it is not unique in the building. The much smaller loft #1040 re-sold on January 14 for $1.36mm, after a sponsor sale on September 19, 2008 for $1,344,090 (a spare 1.2% ‘premium’).

I am a little disappointed that I did not look closely at #1510 after the deed was filed at the end of January, as I had just done an extended analysis of resales at 101 Warren Street in my January 16, the difficulty in comping in former new development / the 101 Warren St laboratory. Neither the deeds for #1510 nor #1040 had been filed when I looked at 4 other pairs of resales on January 16; if they had been I might have taken a different approach after touring this lab. The theme I did take in that post was that new development contract dates are interesting; not just new development sale dates.

I looked then at the 3 of the 4 pairs that had 2008 closing dates but earlier contract dates:

Here is what they look like with the contract dates substituted in for the original sale dates:

#1540

#1130

#840

#1540

Here is the new pair of January 2011 resales, with contract dates in italics for the prior sales, and a 3rd row with the original asking price :

#1040

#1510

For the new pair, note how close together the original values were. Note that both original buyers paid “full price” but that the sponsor stuck the #1040 buyer with the entire transfer tax burden of 1.825% (like the #840 and #1130 buyers above), while the #1510 buyer got the sponsor to pick up half of that.

One take-away is repeated from the January 16 post (and is hardly surprising): that original 101 Warren Street buyers who paid original prices will do better than those who paid raised sponsor prices. (So one trick in looking at The Market is to be sensitive to the difference.) Another take-away is that some late 2008 new development buyers are already above water.

before I digress again …
What’s in it for you? This little sequence about #1510 making a non-trivial profit after a late 2008 new development purchase is not going to win you a bar bet, but in the right (small) circle of loft geeks it might get you some props. No need to thank me.

© Sandy Mattingly 2011