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December 2010

Dec. 11, 2010 - 129 West 20 Street hums country tune, times the market perfectly, kinda, sorta


paging Kenny Rogers
Another way to frame the fight or flight question posed for disappointed sellers (in my November 15 post) is

You got to know when to hold 'em, know when to fold 'em
Know when to walk away, know when to run

Hold ‘em too long (when The Market is resistant) and you will have a stale listing, and the reek of desperation; walk away at the right time, and The Market may reward you when you come back.

The Manhattan loft #4B at 129 West 20 Street (the Chelsea Quarter) should have been sold with a vinyl LP when it raced to a successful sale on November 12, since it took all of 25 days (and a 1.5% ‘discount’) to find a contract when it came (back) to market on August 6. “Back to market” in this case refers to the period July 2008 to April 2009 (from near-Peak, through Lehman, well into the nuclear winter that settled on the Manhattan real estate market), when this loft was being ignored by The Market.

hindsight smiles, this time
I have to say that this one was timed pretty much perfectly.

Something happened in the lives of these sellers between January 2007 and July 2008, because they changed their minds about living in this “2,150 sq ft” “sophisticated and serene” condo loft. They paid $2.3mm on the way in, on January 8, 2007, just about 4 quarters short of The Peak, so when they offered it for sale on July 12, 2008 at $2.55mm, they were not only just post-Peak (but pre-Lehman), but they were within a relatively modest negotiating range of their purchase price (+10% over their 18 month old purchase price; many contemporaneous ‘sellers’ were less modest).

I have no idea if they had offers in the Summer of 2008, but if they had, they were probably kicking themselves later. The Market did not like this loft at $2.55mm in 2008, which the sellers acknowledged by taking it off in November, 6 weeks after the Lehman bankruptcy filing. Sad to say, for these sellers, that The Market did not like this loft at $2.295mm from February 3 to April 19, 2009 … pretty much the coldest months of that nuclear winter. So they folded.

Coming back to market on August 6, 2010, they were again relatively modest, in asking just a tad more than they had paid in January 2007 and just a tad more than The Market had rejected during those oh-so-chilly months of early 2009. As you already know, this time The Market immediately reacted positively, and they signed a contract at $2.3mm by August 31.

To be graphic [table-ic??] about it:

Jan 8, 2007 purchase $2.3mm
     
July 12, 2008 new to market $2.55mm
Nov 5, 2008 off market  
Feb 3, 2009 back $2.295mm
April 19 off market  
     
August 6, 2010 back $2.335mm
August 31 contract  
Oct 12 sale $2.3mm

fun facts, past sales history
The Chelsea Quarter was a new condominium conversion in 2000. I can‘t see when the original purchaser signed a contract, but she bought on June 22, 2000 for $1.094mm and flipped almost immediately (October 12, 2000, at $1.325mm). That poor soul evidently needed to sell into a weak market, and got out on December 4, 2003 for $1.285mm, after 38 months. That owner had more luck (in the only way I can see: real estate), selling in January 2007 to these recent sellers. That lucky owner’s 37 month tenure showed a nearly 80% appreciation.

Sometimes life dictates when you buy, and when you sell.

The original owner flipped for a 21% gain (gross, not net) after 4 months. The next owner took a slight hit (3%) after 38 months. The next owner enjoyed an early century boom of 80%, gross. And the recent sellers sold flat, January 2007 to October 2010. Although they tried to sell pretty quickly, they ended up breaking the house record for longevity, with a tenure of 45 months. Talk about small beer....

fun fact, music edition
Rogers was the third guy to record that song, per that Wiki link in the first sub-head. Indeed, he was the second to record it in 1978.

Note to self: there’s a blog post, if not an entire treatise, based on the Don Schlitz lyrics. Something like I Learned Everything I Know About Selling Manhattan Lofts From A Country Music Song.

You got to know when to hold 'em, know when to fold 'em

Know when to walk away, know when to run

You never count your money, when you're sittin' at the table

There'll be time enough for countin', when the dealin's done.

Those last two lines pretty directly address the fear that some sellers have to price it right, if that means selling for less than they paid (aka The Anchor Effect), doesn’t it? Or maybe they are most apt describing a seller reluctant to drop the price a second time, who thinks I can’t afford it; I have already lost $xxxx in dropping the first time.

© Sandy Mattingly 2010

 

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Dec. 10, 2010 - turning 2 "lofts" into 1 "apartment" at 303 Mercer, then selling for $996/ft


I’m not offended, really
Some people just prefer to live in Manhattan “apartments”, instead of “lofts”. I get that, but it is unusual to see one of those “apartment” people buy adjoining lofts (with 11 foot ceilings, large windows, wide-plank flooring, even “loft-like proportions”) and turn them into an “apartment”. Granted, the result of combining #205 and #206 at 303 Mercer Street (at the epicenter of central Greenwich Village??) is rather awkward, but this “1,868 sq ft” apartment ... errr ... loft ... err ... space did pretty well on a December 2 resale: $1.86mm, or $996/ft.

straining on entry
It is unusual (but not rare) for classic lofts to have a foyer, but I can’t recall having seen a loft with a designated (private) lobby, as the #205/206 floor plan has it (the babble calls it a foyer). It is not unusual (though hardly common) in a classic loft to enter the main living space by walking around the dining table. Maybe Manhattan Loft Guy needs to get out to see more, but I don’t think I have ever seen a classic Manhattan loft in which one enters the master suite through the closet / dressing area.

The #205/206 combo floor plan suffers from each of these peculiarities. The effect is much more pre-war “apartment” than classic Manhattan loft, though there may not be any classic prewars with master entries through a closet.

There’s no doubt that 303 Mercer Street (dubbed Snug Harbor by some nautical developer) is a loft building. In fact, it is three buildings with industrial pasts that were converted as a single coop in 1979. (Somewhat awkwardly, as the “C” lacks an elevator.)

It is appropriate, industrial provenance notwithstanding, that the #205/206 combo was not marketed as a loft; the babble begins:

This beautifully renovated apartment lends itself to gracious entertaining and comfortable family living with its classic yet loft-like proportions.

That should have adjusted the expectations of any loft fans who visited.

© Sandy Mattingly 2010

 

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Dec. 8, 2010 - shredding the fabric: a building's culture is endangered when financial treason is discovered


long ago Manhattan Loft Guy promise, fulfilled
When last I touched on the low-life property manager who cheated at least 19 buildings (including “high-end coops and condos” in Manhattan, at least a few of which I know to be lofts) out of at least $2.3mm, The Bad Guy had just pleaded guilty. I said then (September 19, thieving coop and condo property manager pleads guilty) that

The middle of the end of the story will be when Bassik is sentenced on October 12.   


I will briefly note that middle of that end of that story and circle back to the middle, but then will use this scenario to talk about how fragile the social fabric is in coops and condos (indeed, the smaller the building, the potentially more fragile) and how much damage can be done when something like this happens to a building.

In continuing to use the stages of this financial fraud story, the end of the end of the story -- the next stage for the victimized coops and condos if their culture is endangered -- may not happen without a rippling process of recrimination, learning and (if things go well) … recovery.

In the middle of the end, he was sentenced to 5 to 15 years on each of 7 counts of second degree grand larceny, shorter periods on 6 counts of third degree grand larceny, and a still-shorter term for a single count of ‘scheme to defraud’. The sentences are to be served concurrently, not consecutively, so the net effect of the sentencing is that he will serve between 5 and 15 years, I suppose subject to the proverbial time off for good behavior.

to the beginning of the middle, for a minute
For those readers who need to catch up, I picked up the maturing story somewhere in the middle of the facts that were occurring in the real world:

I started the story at the beginning of the middle, with my January 30, post, why hire a low-life as property manager? 'cuz you didn't know, after a NY Daily News article from January 24 about property manager Richard Bassik of Downtown Properties being accused of scamming his coop and condo clients. Later, my July 2, low-life property manager INDICTED, continued the story in the late middle, when Bassik was indicted, and quoted from the District Attorney’s press release about the charges.


the promise
Note to self: be better at keeping promises such as this (from that September 19 post, now in italics):

This sorry story won’t finally end for quite a while. I will need to deal with this in another post, but the story won’t end until the cascading effects of Bassik’s crimes get worked cleanly through the social fabric of the coops and condos that were victims. Here’s a preview: that rippling process will likely take years.


the problem, in general terms
Remember that I am using the Bassik scenario to say something (sorry) basic about coop and condo life, and how a trauma such as being ripped off by a building manager can cause more than dollar problems. The specific facts don’t matter as much as the outline, and I am not interested in airing dirty laundry about some of the buildings that were victimized or in making their work harder, going forward. So, if you happen to know some of the buildings that were involved, you should not assume that I am speaking about any one of them in particular.

Assume a coop with a “reserve fund” more than one quarter of the operating budget that finds out that the reserve fund account is empty, because (they soon learn) the property manager had siphoned it off for his own purposes. Shareholders (and especially shareholders on the board) run through a series of emotions and -- especially while the information is fresh and subject to uncertainty as facts are uncovered -- varying levels of panic, wondering:

  • what happened?
  • how bad is it?
  • how can we get our money back?
  • can we get our money back?
  • what if we can’t get our money back?
  • how did this happen?

In all but the most secure, congenial, confident, and mutually supportive coops, that last question can take some ugly turns:

  • how did this happen?
  • WTF?
  • why didn’t the board prevent this?
  • who is to blame?
  • who can we sue?
  • WTF???

In the real world, the early stages of this crisis take weeks to unfold, as the board realizes that the records they need are in the hands of the guy who (it seems) stole from them. Meanwhile, shareholders have varying levels of information, of confidence in the board, of confidence in their personal capacity to handle their proportionate share of any unrecovered losses, and, yes, of anger. Not all communications in the first days and weeks turn out to have been fully accurate; not all board members are adept at communicating in a crisis; and not all shareholders are comfortable being told “we don’t know everything yet”, especially if they are also told “the DA thinks there’s no money to ‘recover’”.

Even (especially!) before anyone has any concrete idea of exactly how this low-life property manager stole from them, or how (whether!) they can get any of it back, rumors can fly around the building, tempers can flare, relationships among shareholders can fray.

Hurried math is done, such as, if our 40-unit coop took a $500,000 hit, I can find $12,500 that I wasn’t planning to spend … but can my neighbors? If my share of the hit is $50,000, what then??

stress is harmful to coops and other living things
If you put a social system under stress, things happen.

If you erase a coop’s reserve fund, or (worse) take away operating funds, that is a lot of stress. If you need time to bring a new property manager up to speed, get records from your bank, consult your lawyer, talk to the District Attorney, there is a lot of time for panic, misinformation and General Bad Feelings to develop.

Would you be surprised if some shareholders in some victim buildings begin to second-guess the board? Consult lawyers to see if they can sue the board? Organize other shareholders to replace the board?

Would you be surprised if some shareholders don’t have ready access to funds sufficient to make up their proportionate share of losses? Would you be surprised if some volunteer board members regret having volunteered? Would you be surprised if (before any of this happened) some shareholders just did not like some fellow-shareholder board members?

What do you think all that does to elevator conversations?

some facts about this stress
In at least one of the Bassik victim buildings, unrecovered losses per shareholder were more than $100,000.

In at least one of the Bassik victim buildings, the coop sued the bank to see if the bank did anything wrong with the accounts, so far unsuccessfully, perhaps throwing good money after bad.

In at least one of the Bassik victim buildings, much of the (paper) wealth of long-time shareholders is represented by their coop shares, some of whom are on fixed (or low) incomes.

In at least one of the Bassik victim buildings, the board determined that there was no insurance or bond or indemnification source for any funds lost to Bassik.

In at least one of the Bassik victim buildings, the board initially determined that they had suffered no losses, but ended up filing a Victim Impact Statement when Bassik was to be sentenced.

paging Cyndi Lauper, or do we need The Brains?
Sometimes tempers flare in a coop over conflicting ideas about how to decorate a lobby. (See the lively comments to the November 12, did the NY Times just write the obituary for the Soho real estate market? for some evidence of that.) Sometimes nerves are frayed because of (you will believe it if you read it) smells in the elevator. (See the classic put-down by Brick Underground’s Ms. Demeanor on that one.) Sometimes neighbors don’t like what their neighbors put in the hallway outside their door. (Brick Underground channels a discussion from Urban Baby, here.)

But it is just different when money is involved.

That is as true with potential losses (as with the Bassik thefts) as it is with potential gains. This New York Times piece is such a classic, that I was surprised to find that it is five years old. Written by Josh Barbanel (now over at the Wall Street Journal), The Evolution of Reluctant Capitalists examines life at the West Village Houses in what used to be a fringe area of the West Village (think: prostitution and muggings) in 2005, with many long-time residents conflicted and in conflict about the opportunity to become owners.

the unity that helped bond the tenants has begun to crack. Former friends pass each other on the street without making eye contact. Dissidents are bitterly angry about election rules that they say were stacked against them. Supporters of the plan are worried that the deal of their dreams could be derailed at any moment. It's a "pot of gold at the end of the rainbow," said one message on the tenants' Web discussion group. "No Deal is Perfect, Get a Grip, Stop Bellyaching and Start dancing in the Streets." Although the plan is likely to be approved, there is still dissension. Renters occupying three-bedroom apartments, most with private gardens or cathedral ceilings, have threatened to sue, saying their proposed allocation of co-op shares - and thus their (below-market) purchase price and maintenance - is too high. And a rump group of tenants, some of whom are uncomfortable joining the ranks of owners of luxury apartments, fret about the way negotiations were conducted, the details of the deal and whether the purchase price could have been lower, allowing more tenants to buy, as well as what will happen to those who can't buy.


One tenant, described as a psychologist, former downtown poet, and "a red diaper baby," raised by socialist parents,


... yearns to keep the old sense of community ....


"We started out trying to keep this viable, friendly middle- and working-class community intact," he said. "It has pretty much split around four or five different factions, mostly based on the money you can make owning your apartment."


*** "But you are seeing a bunch of people who have gotten a windfall, and people are tearing at each other."


Let’s review what happened when different people had different views about the opportunity to go from renters to owners, getting that “potential windfall”:

  • “Former friends pass each other on the street without making eye contact.”
  • "It has pretty much split around four or five different factions....”
  • “...people are tearing at each other."

Any of these Bassik victim buildings is at risk of a similar disunity dynamic, depending on how big the hit is (a very subjective item), on how well integrated the building was before hand, on how well the board communicated as the crisis developed, on whether the board had taken reasonable steps before (and has tightened up financial controls since), and on the totally unpredictable and highly variable matter of how various … errr … idiosyncratic personalities interact (collide?).

Best of luck to them all.

© Sandy Mattingly 2010

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Dec. 7, 2010 - pinning a data point: national residential real estate peak was July 2006


all real estate is, indeed, local
Quick and dirty post just to establish a baseline …. I came across this Bloomberg news article last week about the national residential real estate market in which an aside caught my attention:

National prices fell 1.5 percent in the third quarter from the same period last year, and decreased 2 percent from the previous three months. Prices are 29 percent below their peak of July 2006.


It is not noteworthy, surprising, or even especially interesting. For me, it is just a citation to an authority establishing The US Residential Real Estate Peak as July 2006, almost two years before the local peak in Manhattan.

© Sandy Mattingly 2010

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Dec. 6, 2010 - perfectly terrible storm hit sale of 77 Bleecker Street loft


opera fan or stage fan?
Sometimes there is human drama in a dry set of Manhattan real estate purchase-and-sale data. It is difficult for me to look at a two-and-a-half year sequence culminating in the recent sale of the Manhattan loft #102 at 77 Bleecker Street without thinking of tragedy of even Wagnerian or Shakespearean scale. Can you feel some of the pain behind this sequence?  

April 30, 2008 purchase $1.635mm
Sept 25 for sale $1.687mm
Nov 25 price drop $1.399mm
  (crickets)  
July 30, 2009 hiatus  
Sept 4 back  
  (crickets)  
July 12, 2010 contract  
Oct 21 sold $1.281mm

Look at the milestones embedded in this narrative:

  • The Peak of the overall Manhattan residential real estate market was about the First Quarter of 2008, so the purchase was not more than a month post-Peak.
  • Lehman’s bankruptcy filing, which was probably the last catalyst for precipitating nuclear winter, was September 15, 2008, so the resale effort began 10 days after Lehman’s thunderbolt.
  • Speaking of the resale effort, something happened to the plans these folks had when they bought, if they went into resale mode within five months (eight milion stories in the naked city...).
  • Other than taking a summer hiatus from the market for August 2009, these “sellers” sat on the market at the same $1.399mm from November 2008 until the contract in July 2010, in retrospect making the wrong choice highlighted in my November 15 post, flight or fight? the disappointed seller’s conundrum, 30 East 21 Street and 205 West 19 Street lofts edition.
  • Finally, it took them 2 years to sell for $1.281mm what they bought for $1.635 (a loss of $354,000 before expenses, or 22%).

there’s good and there’s lucky; then there’s unlucky
In my December 4 post, loft at 8-10 Warren Street is first resale of 2008 new development, but is still smiling, I highlighted a developer who was extremely successful in “timing” the market peak, but probably did so more by good luck than smart planning. These Bleecker Court sellers were probably more unlucky than ill-informed. Sometimes the external market moves in your favor, and sometimes it moves against you. These folks got killed!

in and out of 1,850 sq ft on 3 levels in 2 years
The single coop at 77 Bleecker Street called Bleecker Court was converted in 1983 from 3 separate buildings, so it is an understatement to say that the floor plans in this coop vary. The multi-level spaces like #102 are among the largest original footprints, in this case “1,850 sq ft” with ceilings in places as high as 17 feet and windows to match. (80 Warren Street in Tribeca is another single-coop-out-of-several-buildings that has varied and funky floor plans.) Here the windows all face the interior courtyard, away from busy Bleecker and Broadway, and from less-busy Mercer Street.

Loft #102 is 2.5 floors of long-and-narrow space, proportionately five times as long as it is narrow, with the half-floor a 25 foot long mezzanine bedroom over the front part of the main floor. The pix show better on the Corcoran listing than on StreetEasy, with the first pair of photos being on the downstairs (‘rec room’ level), which does have windows; the middle pair are the main level with the 17 foot ceilings at the far end; the mezzanine bedroom is in the third pair of photos. Better yet, also look at the StreetEasy photos from the 2008 sale for additional angles, including the way the mezzanine hangs on the main level. While it is large space at “1,850 sq ft”, with three levels and only one exposure it is challenging space.

The recent sale at $1.281mm comes to $692/ft, with the mezzanine at full value. That compares with the much smaller spaces in #815 (“600 sq ft”, no mezzanine) going for $791/ft on November 1, and at #603 (“850 sq ft”, but 2 proportionately large mezzanine spaces) going for $588/ft on November 16. Back in the day, the similarly large #116N (“1,800 sq ft”) sold for $800/ft on September 3, 2009 (overlapping, that is to say, competing with #102), also with 2 floors plus half-mezzanine. You will need to click on the three floor plans on the Corcoran listing to see how the shape of this space is much less challenging than the long-and-narrow #102.

Clearly, The Market values different mezzanine spaces at Bleecker Court at different levels.

calling that female dog
Clearly, hindsight shows that the #102 sellers would not have done worse taking the “flight” course as disappointed sellers, instead of fighting the market (nearly) every day for two years.

Bad fortune, that. Cue the fat lady....

© Sandy Mattingly 2010

 

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Dec. 5, 2010 - Sunday diversion: Sullivan channels Posnanski about ... movies?


... without once mentioning baseball
I guess I should stop being surprised by the breadth of Andrew Sullivan’s musings about the world as-is and as-it-should-be. Perhaps he surprised for the last time me last week when he (one of my favorite bloggers) linked to a guy named Joe who brags about writing curiously long posts, often about baseball, usually about sports (another of favorite bloggers, though not an everyday guy for me like Sullivan).

They both write well, don't they?

I was amused that Sullivan’s link took Posnanski’s analogy (about movies) but not his point. I wonder if Andrew even noticed the part about a baseball legend (congrats on the new deal today, Mr. J!).

© Sandy Mattingly 2010

 

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Dec. 4, 2010 - loft at 8-10 Warren Street is first resale of 2008 new development, but is still smiling


against the trend
You might bet that resales would be challenging in an At Peak Manhattan condominium conversion of a real loft building, particularly if you recall the exercise I went through in my March 5  data dump: 27 Manhattan lofts sold in 2007 + recently, which can be briefly be summarized for present purposes as 2007 new development sales being (somewhat) over-represented in the Loser column of Nov 2009-March 2010 resales. I have not done a similar table for lofts with both 2008 sales and 2010 sales, but I strongly suspect that 2008 new development sales would be over-represented in the Loser column again. All of which is a long way to introduce the Manhattan loft #3W at 8-10 Warren Street (named evocatively, if awkwardly, Trinity-Stewart Condominium), which recently sold at a 6.4% premium over the original sponsor sale on April 28, 2008.

The recent sale was October 18, though it took a relatively long time (for these modern days) for the deed to be filed on November 16. Before getting into the details of this “2,157 sq ft” floor-through (but not full-floor) loft that sold for $2.6mm, I want to take a look at this new development project. The Trinity-Stewart Condominium might be the loft conversion with the single best market timing of any contemporaneous conversion I am aware of. Journey with Manhattan Loft Guy to those thrilling days of yesteryear....

better to be lucky than good?
To simplify those fun times, there were a couple of things going on regarding new developments in 2007 into 2008: there was the general market froth in terms of buyer demand and pricing heading toward the coming-but-when? peak; and there was a fierce competition among developers to get their projects finished, as contractors were generally over-extended, with projects delayed because there were so many projects under way.

Especially for any developers who recognized that the froth could not last, the pressure to complete projects while the buyers were still biting must have been intense. Anyone who feared that The Market would not just soften, but correct, would want to be completed before buyers figured that out. Those developers with the greatest appetite for risk would also want to be among the very last to complete before a market change, in order to participate in The Absolute Peak (i.e., not to leave a single dollar on the table).

Of course, they would recognize that they had limited control over one of the two key variables, and no control over the other: getting to market depended on contractors finishing the (darn) project, and they might exert some influence there; but developers were as powerless (and ignorant) as anyone else about when The Bubble (if they recognized conditions as such) would deflate.

The Trinity Stewart Condominium is a five-story base of two existing loft building converted into 2 residential lofts on each floor above the street, and a new tier of five floors slightly set back from the street-side curtain wall, with full-floor lofts on each. Similar to how Porter House at 66 Ninth Avenue and the Keystone Lofts on the next block at 38 Warren Street were extended and converted in the very different market conditions of 2002-03.

Between April 25 and May 15, 2008 StreetEasy shows they sold 8 units at 8-10 Warren Street, then sold two more by July 1, 2008; our data-base shows one other sale on July 1, accounting for 11 of 14 units.

Those three ‘missing’ units have never sold and have not come back to the sales market, so I wonder whether a developer relation is living in one, and if they successfully rented two others (click the <Rentals (5)> button the Streeteasy link). If they have a positive carry on those three ‘missing’ units, this is a very successful conversion indeed; if not, then maybe not.

Recall that the overall Manhattan real estate market peaked with sales made in (around) the First Quarter of 2008. These guys sold 11 new lofts from April 25 to July 1, getting their money out at very close to peak pricing for at least 78% of their units (and possibly getting cash flow on two others and otherwise using the last).

As I said above, they may have intended to sell into The Peak, but had no control over market dynamics and only limited control over the contractor delays that upset the well-laid plans of many developers in those days. Better to be lucky than good, indeed!

but is this really The Peak?
Have you figured out the flaw in my logic about peak pricing? #3W sold on May 1, 2008 (for redundancy fans everywhere: very close to The Peak) but the contract was signed on June 7, 2007 … about two quarters too early to be totally peak pricing. I am not going to go through each contract (too tedious even for Manhattan Loft Guy!), but the last of the original sales was #2E on July 1, 2008 on a contract signed on … (wait for it) … April 19, 2008. I.e., THE Peak.

#2E got $2,011,043 for “1,932 sq ft” with that April  2008 contract, while #3W originally sold at $2,443,800 for “2,157 sq ft” from a June 2007 contract. That’s $1,041/ft at the peak and $1,132/ft for 2-quarters-before-peak.

i am not going to worry too much more about whether this new development actually got totally peak pricing and is, therefore, the most successful conversion in the Class of 2008. But if I come across another new development with the following characteristics I will re-visit whether any developer was more lucky (good?) than the Trinity-Stewart guys. To beat them, another candidate would have to have contracts signed in 2008 for nearly all units and (probably) would have to have closings not later than first quarter of 2009, because after that some new development buyers with pre-Lehman commitments were bailing out.

meanwhile, back in #3W ...
#3W was not a hard sell this year. It came to market on July 14 at $2.7mm (that time of year that some overly calendar-dependent people think is the wrong time to sell a loft) and found a contract by August 3 at $2.6mm. (Take that, OCD people!) Check the pix for the handsome brick walls and antique (wide) pine floors. (I do wish there’d been a picture of that “custom-designed walk-in closet [recently featured in ‘Real Simple’ magazine”].)

The western of the two original buildings has footprints of “2,157 sq ft” (the eastern building is slightly smaller at “1,932 sq ft”). #3W is that classic-of-classic Long-and-Narrow floor plans, with windows only front and back, side-by-side bedrooms in the back, a string of plumbing on one long side (kitchen, laundry, master bath), and enough plumbing flexibility to have a second bath on the opposite Long wall.

I don’t know if there were elevators in the two original buildings, pre-conversion, but the developers just might deserve credit for putting the elevator in exactly the right place to enter the west building: close to the middle of one Long wall, at the beginning of the living area, and (most importantly, but subtly?) just past the kitchen. A lot of people do not like walking in to a loft in the kitchen; this layout avoids that aesthetic problem by a few degrees.

Did I mention that #3W is the first re-sale in the building? Perhaps the sponsor will get rid of those renters and any family members in the three ‘missing’ units and bring them to market soon....

a note about monthlies
The #3W listing refers to “incredibly low carrying costs!”, a description that earns that exclamation point: this “2,157 sq ft” unit in a condominium that has been operating for two years already has relatively low taxes at $1,197/mo and ridiculously low common charges of $375/mo. Granted, there are no amenities other than a common roof deck, but those are uncommonly low common charges.

© Sandy Mattingly 2010

 

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Dec. 3, 2010 - 114 Mercer Street loft sells at $848/ft with 4 windows, 3 mints, 2 dark BRs + 1 exposure the limits of the Long-and-Narrow form


The Manhattan loft 114 Mercer Street #2 is said to be “2,300 sq ft” with 14 foot ceilings, and to have been gut renovated with some especially chic details. It sits on a prime Soho block (between Spring and Prince), yet the deed filed this week when it sold on November 15 is at $1.95mm, or $848/ft. I blame the footprint, not any choices or work that the seller did. You know … that geography as destiny* chestnut.

It is not just that this loft is a classic Long-and-Narrow footprint (floorplan is here), five times longer than it is narrow, with kitchen plumbing in the middle of one Long wall and bathroom and laundry lines clustered in one back corner. Nor that the public stairwell and elevator extend into the otherwise rectangular footprint, because this is a full floor loft (on this Mercer Street side of the single coop that is also 543 Broadway), ‘squeezing’ the width (proportionately narrow to begin with) in the front third of the loft.

It is that the 4 windows are all on the Narrow (west) wall.

deconstructing a floor plan
With only those 4 windows (one of which is essentially blocked from much of the space by the elevator foyer [ten feet from the window?]), there just can’t be much light penetrating into this second floor loft.

First, that means that the two ‘bedrooms’ are interior, lacking windows. Second, with the non-kitchen plumbing in one back corner, the master suite extends across the full rear of the loft, instead of the very typical arrangement in a Manhattan Long-and-Narrow loft of side-by-side master bedroom and second bedroom. Third, the result of having the second ‘bedroom’ sit on the Long wall between the bathroom plumbing and the kitchen plumbing is that there are only two areas in the entire loft that get the benefit of the full (22 foot?) width: the front 10-12 feet at the windows and the middle 12-15 feet where the dining area and kitchen face each other.

Look at the size and proportion of the main living area in the loft. In a classic prewar apartment, that public space at about 15 x 30 feet would feel nicely proportioned, probably even spacious. But in a loft -- especially a loft with 14 foot ceilings -- this space will not have the same sense of volume as a wider space. Certainly not as much volume as other 2.300 sq ft lofts with different footprints.

Look at the den / media space opposite the second bedroom. Because they made a (lovely) design choice to use glass to ‘open up’ the master bedroom wall (not just glass, in fact, but “Floor To Ceilings Stained Glass And Steel Frame French Doors”!), the media and furniture in this area have to be on the Long wall. There’s just not as much room for playing with a Wii or getting distance from a big screen sitting (or standing) facing the Long wall. Not to mention that both ‘bedrooms’ are right outside the media space (with a master with only the sound insulation provided by stained glass). (Can you imagine the turn that off and go to bed now ‘conversation’ that might ensue if there were a teenager, or mid-life male, using any reasonable volume on these media??) Or is that really an ‘office’ space? That would be a much quieter use. (Should I channel Emily Litella??)

a lovely loft
Even with all my carping about the inherent limitations of the floor plan, this loft looks terrific. Those 14 foot ceilings have barrel vaults, the flooring is cherry, the kitchen is “top of the line”, and there’s central air conditioning. Yet they couldn’t quite get $850/ft in prime Soho.

Part of that is due to being a coop, no doubt. This single coop with two entrances may have been built as a single building, but is partitioned now with a front (east) building entrance at 543 Broadway and a back (west) entrance here at 114 Mercer Street. It can be a little confusing with the two addresses in the same coop, as you can see from looking at the StreetEasy page (“543 Broadway”, even if you search “114 Mercer”) for this coop, with the loft that is 114 Mercer Street #2 that just sold on the same page as 543 Broadway #2 that sold in November 2007 (the babble claims that one as [one of many!] “THE quintessential Soho loft”; it went for $758/ft very close to The Peak, so it seems there is value in being on the quiet [Mercer Street] side of this coop).

as lovely as 2006?
Without a full set of pix and a floor plan, it is hard to compare the condition of 114 Mercer Street #2 now to when it sold in August 2006 at $1.625mm. That was a “meticulous” (if not “gut”) renovation, with those now-familiar cherry floors. No mention of the Venetian plaster walls in the 2010 listing, but perhaps they are meant to be included in the “... and much more ...” of the recent babble (second ellipsis in the babble).

One thing that could not have changed since 2006 is the height of the ceilings. That is seemingly an easy thing to measure, once you decide whether to count from the top of the barrel vault or the bottom, but in 2006 it was sold as a 12 foot ceiling, in 2010 as 14 feet. Sheesh.

comping the tub and interior bedrooms
There are no pix of the “Free Standing Cast Iron Tub” at 114 Mercer Street, but that marketing emphasis, and the single-exposure-Long-and-Narrow footprint brought to mind another recent Soho sale. Did anyone else think of the tub-in-master-BEDroom profiled in my November 11, nice flipping loft at 49 Howard Street?

Tubs aside, #3N at 49 Howard Street is a fascinating comparison for 114 Mercer Street #2. No offense to anyone on Howard Street, but that is a bit less ‘prime’ Soho than Mercer between Spring and Prince. 49 Howard is about half the size of 114 Mercer, which to some extent helps 49 Howard with the problem (Long-and-Narrow-with-single-exposure) that they both share. At half the length, light in 49 Howard is much more likely to get to (and through) the glass walls in that loft.

It is quite possible that the build-out of 49 Howard is at a higher quality than the “gut” or “meticulous” renovation of 114 Mercer. After all, it added a staggering $700,000 to the value of that “1,234 sq ft” loft. But it is not so much better to account (by itself) for the huge spread between the clearing prices of the condo unit at 49 Howard ($1,539/ft) and the coop unit at 114 Mercer ($848/ft). Especially when you recall that 49 Howard is a walk-up.

a short note before I digress, again
It takes a while for deeds to hit public records (114 Mercer Street #2 was filed on December 1; closing was November 15), but this is the first closing in Soho since the front page “obituary” in the New York Times.

for voyeurs only: stalking the seller
The guy who sold this “2,300 sq ft” 2nd floor loft at 114 Mercer St for $1.95mm on November 15 bought this “1,668 sq ft” 2nd floor loft at 159 Duane Street for $2.05mm the next day. The scale is different (his new loft is about ⅔ the size of the old), but functionality is similar, as both lofts have 2 bedrooms plus a den. 159 Duane also has a Long-and-Narrow footprint, but this one has windows at both Narrow sides, so supports two real bedrooms along the back wall.

Another difference? There is “a shower of light from large historic windows”, here abetted by the angle at which the wide Hudson Street goes by.

Another similarity? There’s “a Philippe Starck oval tub”.

City records allow us to stalk follow this guy even more. He appears to have started his Manhattan real estate ‘career’ in September 2004 in the very “apartment” apartment #807A at 20 West 72 Street, selling that “700 sq ft” one-bedroom for $670,000 to buy 114 Mercer Street in August 2006. He clearly has developed a taste for lofts, but has always been a fan of mints and renovation.
_____
*“Geography as destiny” seems to be so common an expression that I could not (quickly) find a ‘source’. But it is clearly associated with Jared Diamond and his seminal Guns, Germs and Steel (although I am not -- yet -- a member of the Facebook group, Jared Diamond Changed my Life (for better or worse)aka geography is destiny. Loved the book, though.

© Sandy Mattingly 2010

 

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Dec. 2, 2010 - a tale of 2 neighbors at 150 West 26 Street, with 1 hard bargain


‘tis a puzzlement
Manhattan Loft Guy loves a puzzle, and a deed filed last Saturday provides one (not counting: they file deeds on Saturday??) ... why did the Manhattan loft #901 at 150 West 26 Street sell on November 12 for $2mm without being publicly offered for sale? After all, when it last sold (February 26, 2007) this “1,623 sq ft” condo got only $1.63mm.

In fact, that 2007 (pre-Peak) sale at $1,004/ft compares very well to the June 2008 (very close to The Peak) sales of #802 at $998/ft and #803 at $1,096/ft, so you would not think there was much upside for #901 this year. Especially because the #x01 layout at 150 West 26 Street is both smaller and less open than the #x02 and #x03 layouts (it has only one exposure, at a narrow end, compared to nearly wall-to-wall windows on both a long exposure and a narrow exposure in the other [larger] lofts).

the importance of having friends in high places
Sometimes the standard real estate mantra location, location, location has extremely local application. In this case, it appears that #901 sold three weeks ago at about a 20% premium over Peak-pricing on the 8th floor because it is the top floor of this 9-story residential conversion in 2001. More specifically, because when the recent sellers bought #901 in 2007, a newly built penthouse above them was nearing completion (it sold for $3,283,586 on December 12, 2007). Even more specifically, because the 2007 penthouse buyer apparently wanted more room, but did not want to give up the penthouse.

is there a typo involved?
The recent #901 buyer is listed as an LLC (“Bejeph”) with a Ridgefield, Connecticut address, but seems to have a much more local presence: the owner of the 10th floor is an LLC with a very similar name (“Jeph”) and the exact same Ridgefield, Connecticut address. Looks to me as though the 10th floor penthouse empire has established a beachhead on the floor below.

That penthouse has “3,200 sq ft” of outdoor space on two levels but ‘only’ "2,070 sq ft” and 2 bedrooms of interior space. It is a good bet that at least part of that interior space of the penthouse sits in top of at least part of the “1,623 sq ft” in #901.

trend, coincidence or am I just starting to notice?
Astute Manhattan Loft Guy readers will now expect me to wonder how good friends the #901 and 10th floor owners were from 2007 into 2010, and to use the word “extortion” to describe how the #901 sellers were persuaded to give up their contiguous space to an acquisitive neighbor only at a significant premium above market value. For that is how I approached similar situations in the two other recent times I noted a neighbor selling to a neighbor abov the market: November 9, another neighbor extorted, as Queer Eye tires of “Soho”, leaves 505 Greenwich Street loft for Chelsea, and November 1, no listing, but VERY motivated buyer for O’Neill loft at 655 Sixth Avenue greases a move to Tribeca.

#901 at 150 West 26 Street, #14C at 505 Greenwich Street, and #2G at 655 Sixth Avenue were all sold to an adjoining neighbor without having been publicly offered for sale. Given the premium prices paid, it is likely that in each case the sellers were not as interested in moving as the buyers were in moving in to the sellers’ space.

averaging down, or up
The penthouse buyer paid $1,586/ft in 2007 for the 2 bedroom loft, unadjusted for the huge terraces. If we value that terrace space as low as 25% of the interior space value (i.e., applying the Miller Rules to outdoor space that is much larger than the interior, as in my May 6, riffing with The Miller on the value of Manhattan terraces, decks + balconies) that value changes to $1,144/ft on an adjusted basis.

In that context, (over)paying $1,253/ft for the loft underneath is a relative bargain. After renovation costs to integrate the 9th and 10th floor spaces, the penthouse will have 3,693 sq ft of interior space on two levels to go along with that 3,200 sq ft of terraces on two levels, for $5,283,856 in purchase costs. That’s $1,430/ft without adjustment, $1,176/ft if you adjust for the terraces at 25% of interior value, and $998/ft if you adjust the outdoor space at 50% of interior value (because the interior is now [slightly] larger than the terraces.

For someone named LLC who has the cash and is motivated not to give up what it has, that (obviously) makes sense.

As I said before with these ‘extortionate’ sales: use it as a comp at your peril!

© Sandy Mattingly 2010

 

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Dec. 1, 2010 - 184 Franklin Street walk-up loft shows market down at least 17% from The Peak


it is nice when the data points behave themselves
The Manhattan loft 184 Franklin Street #6 that sold on November 22 for $542,000 is one of those rare commodities: a Tribeca mini-loft. It interests me as a data point because it nicely pairs with the sale of the loft upstairs that is as close to at The Peak as I am likely to get: #8 sold on March 27, 2008 for $655,000. As they appear to be in similar condition, the 17% difference probably slightly understates the change in market value Peak-to-now (at any given point, #6 should be slightly more valuable than #8 because 184 Franklin has no elevator and #6 is on the 4th floor, #8 on the 5th).

I generally tell people that the overall Manhattan real estate market is down since The Peak about 15 - 20%, depending …. (Depending on all sorts of things in a particular case, and I suspect that there are more examples of greater drops than lesser.) It is gratifying when some hard data tends to confirm one’s biases impressions.

same same nickel dime?
Skip this next paragraph if you don’t care exactly how comparable the two units are....

I confess that I am making an assumption that #6 and #8 have the same footprint, and that the data area a little equivocal. I can only find a floor plan for #6, none for #8. Neither listing claims a measurement; StreetEasy has “600 sq ft” for #8 but nothing for #6; Property Shark has nothing for either; and I disbelieve our data-base claims of “600 sq ft” for #6 and “550 sq ft” for #8. The problem with our data-base is that the measurements for the two 4th floor units total 1,275 sq ft but the two 5th floor units only 1,150 sq ft. That proves to me that the data-base numbers are off somewhere. Just sayin’ that there is a chance that #8 is really a little bit smaller than #6 so that the 17% Peak-to-now difference should be adjusted up for smaller size of #8, as it should also be adjusted up for being one flight of stairs higher.

Condition of the two mini-lofts seem similar, if you assume that “triple mint” (the babble for #8) is comparable to “fully renovated” (only the beginning of some long babble for #6). Works for me, as we area talking approximate changes in value here.

[UPDATE 4:30: I got so distracted strolling down memory lane (below) that I forgot to add another data point for this loft. #6 last sold in April 2006 at $500,000. So while it is down about 17% since The Peak in 2008 (if #8 is the tidy comp that I think it is), #6 is up 8.4% since 2006.]

is that Jean Stapleton?
Looking at this little building on the block between Hudson Street and Greenwich Street brings back memories. My last Tribeca loft was just around the corner, down Hudson. Long before the anchors to the  lock were Tribeca Grille at Greenwich and Nobu at Hudson, Riverrun Cafe was at 176 Franklin. For more than ten years, Riverrun was my local. It had been there at least a few years before I moved to Tribeca in 1981, and was dubbed by some tony food magazine “the Tribeca pioneer”.

I won’t bore you (or embarrass myself) with bar reminisces, but when I trolled around the inter-tubes looking for some way to link to Riverrun I came across this profile of one of the owners. I’ve long known the outline of the story, but this is the first detailed on-the-ground description of the crazy things that he would do every year in Spain. The profile has to be at least 10 years old by now, and the guy is now living in Paris. I last saw in him at a great Brooklyn beer bar that is an indirect descendant of Riverrun about a year ago (say hello to Lou for me if you stop in at The Brazen Head.)

In honor of Joe, and Don too, and all the knucklehead bartenders, wait staff and patrons, Edith Bunker is warming up at the piano....

© Sandy Mattingly 2010

 

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Sandy Mattingly is Manhattan Loft Guy; now with The Corcoran Group (http://corcoran.com/ ; but see the disclaimer at the bottom of the page), he can be reached most easily at Sandy@ManhattanLoftGuy.com or 917.902.2491, and followed on Twitter @ManhattnLoftGuy (note "mis-spelling"). After 7+ years, the blog has moved. Links here on RealTown will work for the foreseeable future, but new posts (and all the old content) has migrated to ManhattanLoftGuy.com.

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