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July 2010

Jul. 30, 2010 - divorce + dollars / 111 Hudson Street loft sale is painful on several levels


got coffee?
I had some buyers who were almost-but-not-quite-interested in the renovation project that is the Manhattan loft on the 5th floor at 111 Hudson Street, so I was intrigued enough when it sold on June 28 to track back a little bit. You know I am a bit of a Manhattan real estate voyeur, so I was fascinated by what the (typically) dry title transfers reveal about real people. If you are interested in a story, be patient ... this one will take a while....

a loft in unusual condition
It was obvious to anyone who saw this loft that something happened to the owners. The listing description provides a bit of preparation ("[t]hree separate loft apartments to be combined ..."), as do the 4 (count 'em: four!) floor plans on the Corcoran website. While it is not unusual to see listings for to-be-combined spaces, nor to see alternative floor plans for renovation 'projects', the actual space when we saw it was one separate loft, very primitive but untouched by a renovator's hand, and two other lofts that had been gutted and framed.

In other words, a full-floor renovation had been begun, with one of the three lofts left in a condition that someone could live in during the renovation. At a later point in the process, someone could live in (substantially) finished space on the other side of the wall, with those adjoining walls to come down when the project was nearly finished.

But something happened.

The front loft (Unit A in floor plan; click on #4) had the view and the east light across Hudson Street, and looked as though it had not been touched in 30 or more years. It is "1,142 sq ft" of classic old-school loft: an oddly shaped "sleeping room" opposite the windows, a huge (single) bathroom, with two big closets stuck at the back of the sleeping room and bathroom. I hope I don't offend an AIA member by saying that this floor plan reeks of being drawn on a napkin.

The two back lofts, in contrast, have been completely gutted, with metal studs where new rooms were to be, all sheet rock, ceiling and plumbing removed, BX cable exposed. Obviously, they had (real architect!) plans approved by the city and the condo, but had only gotten a little of the way through the work sequence before stopping, and selling. Obviously, something happened.

from 2 names to 3
There is no reason to use their real names, but when these folks bought on July 3, 2008 (can you spell P E A K ??) the deed was recorded in the names of "John Smith" and "Mary Smith". When they sold on June 28, 2010, the sellers were named John Smith, Mary Smith and Mary Jones, and their notice address was an office suite on Wall Street.

The obvious inference is that sometime before July 2008, Mary Jones married John Smith and changed her name to Mary Smith, while sometimes between July 2008 and June 2010 John Smith and Mary Smith got divorced and she changed her name back to Mary Jones. Indeed, if we could access the work schedule for the 5th floor demolition and re-building, we could probably date the separation that led to divorce more precisely to the time between the stud guys and the electric guys. But that would be way too voyeuristic.

more pain
I don't mean to come across as crass about the obvious pain involved in the break-up of a marriage, but those facts are clearly implied by the title history. There's more pain evident from the history of the 5th floor.

Recall that the "Smiths" bought in July 2008. They bought the three then-separate lofts for $3,734,656 in what was termed by StreetEasy a Sponsor Sale. Very likely, all three lofts looked then more or less the way that #5A looked when we saw it this Spring: as if they hadn't been touched in 30 or so years. Both the B and C units could have been "designed" on a napkin, with one bathroom in each (next to the kitchen) and one sleeping area (windowed in C, no window in B), with enough space that other arrays would be possible (they are "1,298 sq ft" and "1,354 sq ft").

The entire floor is said to be "4,002 sq ft". The "Smiths" paid $933/ft at The Peak (that contract was signed November 26, 2007) for primitive space that had to be demolished and built out. The good news is that they did not get too far into the renovation that was probably budgeted at $800,000+ (using $200/ft as a ballpark). The bad news (apart from the change in marital status) ... they sold on June 28 for $2.9mm ($725/ft). Can you spell O U C H ??

tracking the Smiths
It is quite likely that the Smiths would have paid more than the ballpark $200/ft renovation. It is not hard to find that they (at least, he) have done this before, in a not restrained, no-detail-overlooked way.

We know this because Mr. Smith bought a "5,000 sq ft" "sprawling open space in a classic vintage loft with two bedrooms [and] two new bathrooms" in June 2004 for $3.375mm and turned it into a 3 bedroom + 3.5 bath home that sold in February 2008 (once again: can you spell P E A K ??) for $5.1mm.

That listing description is so enthusiastic, so bubbly, so babbling that I am confident that Mr. Smith and Ms. Smith would have done the same thing (or better!) in their never-to-be-marital-abode at 111 Hudson Street:

Finally a developer who has thought of every luxury!!! No detail was overlooked in the impeccable renovation of this dramatic 5000 square foot home featuring a 14' barrel-vaulted ceiling, oversized windows, and monumental Ionic columns. This contemporary dream home has floating walls, a custom-built temperature-controlled wine room that accommodates over 1000 bottles of wine, and a fully-outfitted marble wet bar. The open kitchen would be any chef's dream with Poggenpohl cabinets, 2 Viking stoves, stainless Miele appliances, and even a Miele cappuccino maker. The hand crafted wet bar is also fully outfitted with Miele ice maker, dishwasher, and refrigerator. There are 3 mint bedrooms and 3.5 baths. The oversized master suite is not only quiet and bright, but also has a wall of custom-built closets and an impeccable Argente limestone bath, with radiant floors, sunken tub, and multi-jet glass-enclosed shower.

I can almost guarantee that Mr. Smith spent more than $200/ft for that renovation. (I am going to gloss over the fact that Mr. Smith bought this unit with a partner (not Ms. Smith!), with whom he bought at least one other loft around this time, and that he and that partner apparently traded half-interests so that each owned a loft 100% before 2008; yeah ... that is one digression too far, even for me.)

a digression I can't resist
On this topic of renovation and (I really hope) without getting too creepy, it was not hard to find out that before Ms. "Smith" was married to Mr. Smith, she bought (in 2003) a Gramercy Park 1 BR that she sold (in 2007) after an "immaculate renovat[ion with] every luxury one could want", probably selling at twice what she'd paid for it. I guess it didn't last, but it seems that the Smiths had similar luxury taste.

too much late night television
Once I started tracking the Smiths it was inevitable that I would peak at other people in this chain of transactions. So ... wait, there's more!!

There's not a lot for me to say about the buyer of the never-to-be-a-Smith-marital-abode at 111 Hudson Street, except that he seems to still own a "1,600 sq ft" Soho loft that may have given him a taste for deluxe living (it was billed as "[q]uintessential Soho radiates throughout this truly Magnificent Loft ... [a] Superb Renovation", for which he paid $1,000/ft in March 2005).

The buyers of Mr. Smith's 5,000 sq ft "impeccable renovation" are another story.

It is not just that those buyers of that 5,000 sq ft "impeccable renovation" moved maybe 50 yards north in Noho, or that they moved from "2,600 sq ft" to "5,000 sq ft" that is of interest. Nor is it that they (probably) had experience doing a high-end renovation of their own when they bought Mr. Smith's "every luxury" renovation. (Though to me, Manhattan loft voyeur that I am, all of these things are interesting.)

It is that these people sold a beautiful loft in one of the Manhattan Loft Guy all-time favorite buildings, and did so at a time (and price) that caused me then to speculate about The Future (something I rarely do), with a spectactular MLG link history.

With all that detail, I am going to have to out the loft they sold, though there's no need to use their names either. The February 2008 buyers of Mr. Smith's 5,000 impeccable (blah, blah, blah) sq ft sold the loft that I featured in a September 24, 2008 post [right after Lehman!!], one sobering data point / 684 Broadway loft sells slowly, reluctantly, that had gone to contract in June 2008 (just after The Peak!!!), that caused me to speculate (and to snark) about The State of The Market (and the pontification of agents):

Perhaps more significantly from the perspective of market trends, #7E traded at a lower price per foot this month than #9E cleared at almost 2 and a half years ago.
***
One of the things about me that my sellers (and buyers, as well) probably hate is that I don't like to make predictions. As I hope you can tell from this blog, I like fact-based analysis (which is why I always pay attention to 
The Miller, and am amused by agents and RE firm managers who pontificate, as evident from last Friday's post  Brown Harris vs Brown Harris / 25% drop in coop value at the top already??)

Based on this one data point, the very-local-to-Broadway-at-Great-Jones-Manhattan-loft-micro-market looks to be flat or worse, year-over-year. I would be very leery of premium-over-last-sale pricing here. And I would certainly look closely in other neighborhoods to test the supposition that The Manhattan Loft Market (overall) has softened. (Not much of a limb to climb out there on, I know, but I will close with tongue partly in cheek by quoting a major Manhattan firm owner quoted in Friday's post in the immediate wake of the Lehman-AIG froth:) 

 
While it is clear that there will be an effect, it would be irresponsible to provide a market forecast and we remain confident in the fundamental strength and resiliency of our market over time.

bear with me here ...
From my perspective, the twists and turns of this post show that the Manhattan loft world is a very small world indeed. The sellers in my September 24, 2008 sobering post were the February 2008 buyers from a guy I have dubbed Smith, who in 2010 sold a fascinating loft at 111 Hudson Street that (in its course of purchase, renovation begun, renovation halted, and sale) revealed some interesting things about the Manhattan loft market and some personal and painful things about the Smith family.

Those sellers in my September 24, 2008 sobering post had already been featured when they brought that loft to market (on October 4, 2007, 684 Broadway has a new one, way back when I used to talk about current listings). That post had a natural connection to (and linked to, of course) what is still one of my all-time favorite MLG posts, the May 15, 2007 Jagger's Law of Imperfect Lofts / life is compromise (sigh). That post followed a family (clients of mine) pretty darn closely.

You are probably immune, but this is giving me chills.

paging James Franciscus
Eight million stories in the naked city. There's evidence of at least three of them here.

If you have had the patience to read this far along ... thanks for sticking with me!

© Sandy Mattingly 2010

 

 

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Jul. 29, 2010 - 454 West 46 Street loft sold after MUCH longer campaign than in the NY Post


much
I assume that anyone who finds the way to Manhattan Loft Guy knows not to trust "recent sales" information in dead tree media without verifying it. Today's warning is sponsored by the Just Sold feature in today's NY Post. When you keep in mind that these items typically come from the PR reps at brokerage firms, you can easily understand one kind of potential problem with the information: sale information may be limited to the most recent listing firm's experience. 

Here's what the Post reports about the sale of a loft in the funky location (for Manhattan lofts) of Clinton:

CLINTON $1,045,000

454 W. 46th St.

One-bedroom, two-bath duplex co-op, 1,380 square feet, with 11-foot beamed ceilings, open kitchen, home office, walk-in closet, washer/dryer and window AC; building features doorman. Maintenance $1,472, 65 percent tax-deductible. Asking price $1,095,000, on market 17 weeks. Brokers: Leslie Modell, Warburg Realty and Noble Black, The Corcoran Group

This looks like a pretty quick sale, right? Four months to get a deal at a 5% discount from asking price.

The reality is not surprising, and rather different. In fact, the listing history on StreetEasy for this loft, #3AS at 454 West 46 Street (the Piano Factory), shows that it was actively marketed by PruDE beginning in March 2009. There were less than two weeks between the end of the PruDE listing period and the Corcoran marketing that began on February 5, whigenerated a contract by March 24, a sale on May 27, and a NY Post "Just[!] Sold" feature on July 29.

Looking just at the new firm marketing, that is pretty quick: less than 7 weeks to contract, at that 5% discount from list.

Looking at the entire, essentially seamless, effort the seller made, they were at it for a year and sold at a 21% discount from their original asking price. Given that they were out there during the nuclear winter, this history and price history is not surprising.

Not only did they work it very hard in that tough market (our data-base shows they did 21 open houses from March to December 2009), they tried to react to the chilly market, as this price history shows:

March 11, 2009 $1.32mm
March 31 $1.295mm
May 4 $1.225mm
June 28 $1.15mm
October 8 $1.12mm

The Market is not efficient
Not that the spread between the last listing price (at which they held from October 8 to January 26) was only 7% higher than the eventual closing price. I have to believe that this loft got punished in the Autumn for being a tired listing. That $1.12mm asking price should not have scared off a buyer willing to close at $1.045mm.

They re-booted the listing by having a ten day hiatus between listing firms, giving the new firm the opportunity to do the New Listing thing, probably exposing it as 'fresh' to people who either were not paying attention before, or who needed a New Listing nudge to get them to take a new look at an old listing. That should not happen in a rational market, but there it is.

duplex loft
I would love one day for someone (not me!) to determine the difference in value between lofts that are duplexes and lofts all on one level. Particularly at the scale of this loft ("1,380sq ft"), the sense of space is completely different in a duplex, before even considering the 'waste' of space the stairs take on both levels. I can appreciate that some people prefer the separation and privacy gained in a duplex, but I suspect that there is generally a market deficit for duplexes ... at least until you get to pretty large spaces (perhaps 3,000 sq ft, or 1,500 on each level).

#3AS has just enough room upstairs for a bedroom, bath, a window-less study (roughly 12 x 10 ft), and those stairs. Once you close any door upstairs, there is significant separation from any noise coming from the kitchen or living area. That will be attractive for many people, especially people who don't mind growing a child in that study, without natural light. But most spaces as big as 1,380 sq ft have a much easier layout for 2 (or more) real bedrooms.

redux
Careful readers will have thought by now that some of this sounds familiar. I hit this loft when it closed, but in that June 5 post, sale at 454 West 46 Street strikes an off note, down 5% since 2004, I highlighted the recent sale price weakness compared to that (ancient) prior sale in 2004:

paging Billy Joel
  1. August 12, 2004:  $1.1mm
  2. May 27, 2010:       $1.045mm (after "beautifully [sic] renovations")
That is a very unhelpful data point for neighboring shareholders.


Lesson for Piano Factory shareholders: bone up on your rationale for #3AS being such a weak sale, find a "below-market" angle
Lesson for Manhattan Loft Guy readers: don't believe everything you read in the papers (d'oh)

© Sandy Mattingly 2010

 

 

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Jul. 28, 2010 - 79 Laight Street loft also being auctioned today (UPDATED)


same celebrity, same mortgage
I noted yesterday that Damon Dash's loft at 25 N. Moore Street (The Atalanta) had been foreclosed on and was set for auction today (July 27, foreclosure auction tomorrow for 25 N. Moore Street celebrity loft). There is one significant wrinkle to this story: Dash also owned the Manhattan loft #5F at 79 Laight Street (Sugar Warehouse) (as Curbed tried to point out, but had the wrong address) and that loft is also being auctioned today.

What I missed in reviewing property records yesterday is that the mortgage that is being foreclosed on applies to both lofts, as both #3A/4A at 25 N. Moore Street and #5F at 79 Laight Street are listed in the Exhibit A legal description of the mortgaged property (oddly, the mortgage boilerplate then describes both lofts as the borrower's "primary residence"). According to the "Title Documents" records on Property Shark, the mortgage is recorded only against the 25 N. Moore Street loft, though the lis pendens and auction are noted in the Property History section for #5F at 79 Laight Street.

The mortgage amount now makes much more sense. Dash refinanced both lofts in September 2006 for $7.3mm, though he did it in one mortgage. (I don't know enough about bank practices to know if including two properties on one mortgage is unusual, though it strikes me that way.) His original 2004 purchase prices were $3.875mm (the Atalanta loft, in February) and $1,807,394 (the Sugar Warehouse loft, in March).

Thirty months later, that (nearly) $5.7mm in 2004 value secured a $7.3mm loan. I'd love to see that 2006 appraisal for these two lofts. Considering that the bank (theoretically) loaned no more than 90% of the 'value', the appraisal implied an appreciation on the order of 40% in those 30 months (the $7.3mm mortgage in 2006 is roughly 90% of $8.1mm; $8.1mm is $2.4mm more than the $5.7mm combined purchase prices in 2004; the implied $2.4mm gain from 2004 to 2006 is more than 40%).

that was a bubble, bub
Considering that the September 2006 refinancing was about 18 months before The Peak of the Manhattan real estate market, these two lofts must have been worth a gazillion dollars at The Peak. If not more. (They just weren't worth what the debtor was trying to sell them for.)

the loft, oddly layered
The debtor did try to sell that loft #5F at 79 Laight Street beginning in November 2007 into August 2008 (with a 4 month hiatus), so we do have a StreetEasy listing for this loft. I went on yesterday (at length!) about the listing history and prices for #3A/4A at 25 N. Moore Street, and I am not going to repeat that for #5F at the Sugar Warehouse.

Suffice it to say that #5F had a tenant for at least some of the marketing period, that the on-and-off-the-market decisions for the two lofts were very different, and that the debtor stopped trying to sell #5F at the Sugar Warehouse as soon as the bank filed a lis pendens against both lofts in mid-August 2008.

At "2,888 sq ft" and three levels, #5F is one of those funky Sugar Warehouse layouts (love 'em or hate 'em). I hit the odd unusual layouts and values in this building earlier this year (January 31, what's up with this down? Sugar closes on Laight Street under $1,000/ft) and way back on December 4, 2008, Sugar is sweet but 79 Laight Street closing is better. The Sugar sales in that December 2008 post are pretty germane to the tale of #5F. Click through for the details, but here is the money quote from my January 2010 post:

The difference between the September 2008 sales of the smaller #5D ("2,332 sq ft") as a duplex with no claim to river views ($2.525mm, or $1,083/ft) and the January 2010 sale of the larger #4D ($2.6mm, or $948/ft) as a duplex with a direct river view is rather striking.

Keep the September 2008 value of $1,083/ft for a duplex with no claim to river views in mind when looking at this (truncated) price history for #5F, a triplex that claims both partial and full river views (sigh):

Nov 27, 2007 $5mm $1,731/ft
Jan 8, 2008 $4mm $1,385/ft
Feb 19 $3.75mm $1,298/ft
July 4 $3.65mm $1,264/ft

insult meets injury
That September 2008 value of $1,083/ft for that "2,332 sq ft" duplex was derived from a contract signed August 19 -- the day after the bank filed a lis pendens on #5F (and on the Atalanta loft), and the same day that they took #5F off the market. Note the spread between the #5D contract price of $1,083/ft and the #5F asking price that day ($1,264/ft). One has to wonder if they really wanted to sell #5F, or if they appreciated that in August 2008 they were 6 months or so after The Peak.

for you detail freaks
The readers with OCD will want to see the mortgage, which is on the City of New York's ACRIS system here.

The auction will be in about 90 minutes, unless adjourned.

[UPDATE JULY 28: The Real Deal has tweeted that #5F did not sell at auction, attracting no bid after the bank started at $1,000; unlike the other Dash loft on N. Moore, which sold for $5.5mm. h/t Curbed]

© Sandy Mattingly 2010

 

 

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Jul. 27, 2010 - foreclosure auction tomorrow for 25 N. Moore Street celebrity loft (UPDATED w result)


got bucks?
Not my metier, but I suppose that everyone who pays attention to the hip-hop world has been aware that Damon Dash has been in severe financial difficulties for a few years. (See this overview from The Atlanta Post March 16.) So the fact that his duplex loft #3A/4A at The Atalanta, 25 N. Moore Street is up for a foreclosure auction tomorrow at 1 PM is not so much a real estate story as a general business story:

  • Guy buys loft in 2004 for $3.875mm;
  • Guy refinances loft in 2006 for $7.3mm;
  • Guy has falling out with Jay Z, and business falls to pieces;
  • Guy stops paying mortgage (about $78,000/mo) and common charges (about $2,300/mo), so bank files lis pendens (August 2008) and condo files lien (January 2009);
  • nothing gets better (or resolved), so the bank secures a judgment March 1, 2010 for $8,960,752, and schedules an auction for July 28.

Hard to imagine that even the bank will come out very well here.

the real estate news
The Guy did try to sell the loft in 2008 and 2009. There is a surviving StreetEasy listing from 2008 with listing history details that conflict with the inter-firm data-base, but that at least informs that that duplex loft is "5,142 sq ft" set up as 4 bedrooms + 4 baths, with 20 foot ceilings in the living room, and that the Guy had been asking $7.9mm.

The inter-firm data-base shows that he was only on the market from January into April 2008 before taking it off the market until November 2008 (after the bank lis pendens and common charge defaults), at which point he aggressively dropped the price through the winter:

Nov 30, 2008 $7.5mm
Jan 22, 2009 $6.95mm
Feb 9 $6.5mm
March 2 $5.95mm
March 25 $5.75mm

Hindsight (that female dog!) reveals the timing error. If it was ever going to sell at a top price it would have been before the September 2008 bankruptcy filing by Lehman and the subsequent nuclear winter for Manhattan real estate. But the Guy sat off the market from May into November 2008 and only came back when he had to (presumably). Even then, he had no luck.

what might have been
The neighbors in the duplex loft #3C/4C had a pretty easy time of it when they came to market in June 2008, as they found a contract within 6 weeks and closed on October 1, 2008 at $4.6mm. At "3,419 sq ft" the scale of this duplex loft is different than #3A/4A with "5,142 sq ft", but #3A/4A has 3 bedrooms + 3 baths and that same high ceiling in the living room. While there is no necessary linear relationship between the values of these two lofts, the fact that #3C/4C got $1,345/ft while #3A/4A sat off the market suggests that the Guy might have gotten around $6.9mm before Lehman.

Maybe he was stubborn, in the same way the rest of his financial world went into the toilet; or maybe he didn't have any flexibility (because of the mortgage and his other creditors). Regardless, that delay cost the Guy and his mortgage holder a lot of money.

The only two lofts to sell in The Atalanta since then have been #12B ("2,150 sq ft" on August 20, 2009 at $1,159/ft) and the #8BC combo ("4,035 sq ft" on November 30, 2009 at $1,271/ft). By the time the earlier of these two lofts went to contract (#8BC in May 2009), the desperate #3A/4A sellers were all the way down to $1,118/ft, with no sale. Indeed, the #8BC listing history shows a high level of motivation, channeled appropriately, and a very different market reaction.

Check out this velocity and final discount for #8BC:

Jan 30, 2009 new to market $7.35mm
Feb 5   $6.75mm
Feb 9   $6.1mm
March 9   $5.9mm
May 18 contract $5.13mm

The Market is not fair
Our listing history shows that #3A/4A sat at that $5.75mm price from June 2009 into December, when a contract was signed ... but that contract obviously never closed.

Perhaps there was only one $5+mm buyer for The Atalanta in 2009. Perhaps the simplex "4,035 sq ft" layout of #8BC was a significantly more valuable space than the duplex"5,142 sq ft" layout of #3A/4A. Perhaps #3A/4A was stigmatized by the bank lis pendens and the condo lien by 2009.

But look at the overlap in 2009 marketing of these two lofts, up until the #8BC contract on May 18:

#3A/4A   Jan 22, 2009 $6.95mm $1,352/ft
  #8BC Jan 30 $7.35mm $1,821/ft
  #8BC Feb 5 $6.75mm $1,673/ft
#8BC Feb 9 $6.1mm $1,512/ft
#3A/4A   Feb 9 $6.5mm $1,264/ft
#3A/4A   March 2 $5.95mm $1,157/ft
  #8BC March 9 $5.9mm $1,462/ft
#3A/4A   March 25 $5.75mm $1,118/ft
  #8BC May 18 $5.13mm $1,271/ft

paging the Smothers Brothers
Not fair at all. At $1,271/ft, #3A/4A should have sold around that same time around $6.5mm. Instead, it languished $750,000 below that, and is set for auction tomorrow.

auction details
The auction is scheduled for 1 PM tomorrow at the New York County Courthouse, 60 Centre Street, Room 130, before referee Jay Stuart Dankberg. More information from the bank's lawyers at 212.661.2900. Bring a big check. Certified. [UPDATE: Curbed has the link for the auction notice; and a link to this post; THX Curbed!]

[UPDATE JULY 28: The Real Deal has tweeted that #3A/4A sold at auction for $5.5mm ($1,070/ft). h/t Curbed]

© Sandy Mattingly 2010

 

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Jul. 23, 2010 - 1200 Broadway loft closes near 2009 ask


timing is (not quite) everything
This story doesn't get old (at least, not yet): a well-priced Manhattan loft sells after going into contract within a short time, at or near a price that failed in 2009. Today's' example is #5G at 1200 Broadway (Gilsey House), which had been listed for 6 months in early 2009 (brrr) at from $1.65mm to $1.499mm. They pulled back from the market until February 2 and found a contract by February 24 using that old (unsuccessful, then) $1.499mm. They closed on May 26 at $1.45mm (a mere 3% discount), so the sellers went from New Listing to Cash In Hand in just under 4 months. You'd think that seller would be pretty happy with that outcome.

Yes, Virginia, 2010 is a different market from 2009. But sorry, Charlie, that seller is not as happy as at least one (former) neighbor. First, the good news....

2009 prices with 2010 velocity
We have seen several examples of 'bad' 2009 prices that worked in 2010 recently, as well as examples of well-priced Manhattan lofts finding quick contracts. I know you don't need them, but here are the basic links: my July 7 post, 12 examples of the (rapid) velocity of the Manhattan loft market, and my July 8 post, another sign that 2010 is not 2009, as 60 West 15 Street loft sells.

No Man's Land is a bad nickname
The NY Post has the story (wrong, slightly) in yesterday's Just Sold feature:

FLATIRON $1,450,000

1200 Broadway

Two-bedroom, two-bath loft co-op, 1,800 square feet, with 12-foot ceilings, Brazilian walnut floors, open kitchen with Sub-Zero refrigerator, marble and limestone bath, home office, three walk-in closets, Bosch washer/dryer, central AC and Empire State Building views; building features elevator and garage. Maintenance $1,966, 60 percent tax-deductible. Asking price $1,499,000, on market one week. Broker: Timothy Scott, The Corcoran Group

It was on the mrket before the contract for three weeks, not one; still PDQ.

Granted, this location, Broadway at East 29 St, is hard to classify as to neighborhood, but I would not consider it Flatiron; but then again, it is not really Madison Square (too far north), nor Murray Hill proper (too far west), nor quite Midtown (too far south). NoMaLa does not cut it, however, so let's refer to this area as .. uhhh ... Broadway and 29th Street.

(former) MLG fave, with recent sales

Not sure why, but I used to hit this building a lot, yet have not recently. In this historical note from July 24, 2007, Gilsey House ancient history (circa 1980), I cite three earlier Manhattan Loft Guy posts.

Maybe there is pent-up demand for the Gilsey House, as there have been three sales in the last few months, after only one in nearly 3 years.

In addition to this sale of #5G, #5B cleared at $1.65mm on April 5 and #3G closed on June 29 at $1.25mm. That is a rather large spread for 3 lofts in the same building closing within 60 days that are said to be "1,850 sq ft", "1,900 sq ft" and "2,000 sq ft", particularly with two having the same footprint.

comping is hard (again)
In terms of price, #3G is the runt of the litter. With 14 foot pressed-tin ceilings, they bragged about the space and the condition, in which "[r]emnants from the Victorian era and a first-class renovation blend seamlessly", but not about light or a view.

From the perspective of The (cold, cruel) Market, that first-class renovation does not compare to the same footprint (but very different floor plan) two floors higher, in #5G, marketed as a:

pin-drop quiet, modern loft home, renovated by interior designer Marc Schlesser, [that] speaks volumes to you with it’s soaring 12’ ceilings, huge windows that view The Empire State Building to the North and direct Western sunlight ...

... with a long string of proper proper names. The #3G "first-class" renovation without view cleared at $1.25mm ($625/ft, including 2 lofted spaces), while the #5G Marc Schlesser space (plus, plus, plus) with Empire State views and west light traded at $1.45mm ($784/ft).

But, how then to explain the sale of #5B at $1.65mm ($868/ft at the "1,900 sq ft" in our data-base)? That listing description was more restrained than that of #5G (and perhaps even of #3G), claiming the Three Mints but no mention of a view. It came to market last September (as the nuclear winter had begun to thaw) and found a contract within 3 months.

  $/ft contract mints view light
#5B $868 Dec 4 yes no probably
#5G $784 Feb 25 yes ESB yes
#3G $625 April 16 yes no no


Did I mention that comping is hard? Or that The Market is both cold and cruel?

© Sandy Mattingly 2010

 

 

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Jul. 21, 2010 - 55 Thompson Street is not a nondo, is the luxe-est rental in Soho


back on Broome Street
Let's move one block east from yesterday's post, some lofts still get hammered, as 554 Broome Street sale shows, to visit the corner of Broome and Thompson Streets, which was to have been a new condominium but which will be opening soon as a rental building. Josh Barbanel has the current story in today's Wall Street Journal, Parking Space Becomes Living Space / Early Indoor Garage in SoHo Is Recast as Pricey Apartment Building; Restoring a 1920s Medallion, but Curbed has the all-important back-story that Barbanel missed. Two things interesting about this rental building (dubbed 55 Thompson Street, or Tunnel Garage): it replaced the iconic (actual) Tunnel Garage that sat on this site since 1922 and which was the first garage built as a garage in Manhattan; and the new development was planned as a condominium back in the day.

whose idea was this?
I first noted the clever locution "nondo" on Curbed, where it is used to refer to a new building or conversion built as a condominium but turned to rental after some unsuccessful sales marketing. 55 Thompson Street is the first building I have noticed that changed from condo to rental without having an unsuccessful sales campaign, so I am curious about how that decision was made. Was it the developer or the lender?

In the Old Market, I always assumed that a developer who put up a rental instead of a condo was bullish about the Manhattan real estate market because he was securing an income stream instead of (trying to) take the money and run. That would describe this development if (only if) the developer is the one who decided to go rental, as opposed to the lenders. I am not sure what it implies about the market if the lenders feel they are better off with a rental instead of a condo

I do not follow the rental market the way I do Manhattan loft sales, but the only rental buildings I know of in Soho with more than 6 or 7 units are 80 Varick Street with 61 units, 90 Thompson Street with 27 units,  and 510 Broome Street with 12 units; the typical Soho rental building has 2 or 3 units. (Curiously, that makes this small area the center for Rental Soho.) There is no reason to consider these buildings as in the same category as 55 Thompson Street.

None of these buildings have inventory at these price points: $6,500 for 1 bedroom, $12,000 for 2 bedrooms, $18,00 for 3 bedrooms. As the rental agent for the building said:

Competition for the new building, he said, would come from individual apartments listed as rentals by unit owners in new condominiums.


There's nothing up on the agent's website yet about this building and there is no mention of amenities in the Journal article, but I suspect that this rental-designed-as-condo will have some room for amenities (roof deck, at least), plus a doorman. At $12,000/mo for 2 bedrooms, the market will want some oomph, no?

this architect needs a ruler
The Wall Street Journal article has a bizarre side note about the medallion that does not fit. The medallion ("terra cotta ... showing a 1920s car emerging from a tunnel, its headlights blazing") used to sit on the curve of the 3-story garage, diagonally facing the intersection of Thompson, Broome and Watts Streets. Somewhere within my memory (I think) it was covered by the less-than-iconic branded sign of the garage operator. Barbanel suggests that some architect on the project way back when did not know how to measure the medallion.

an architect for the developer had once appeared at a public meeting and promised to move the medallion to the lobby of the new building. But when the medallion was taken down from the garage, it turned out to be 13 feet in diameter—too large to fit in the lobby.

Or maybe it was the lobby the architect could not measure.

paging Joni Mitchell
Of course, "the preservationists" got involved when this development was first proposed (way back in 2005; what a different world we lived in then!!). The Villager had this story from December 2005. Personally, I liked the shape of the garage and really am intrigued by the idea that this was built five years before the Holland Tunnel was completed (in anticipation of the tunnel) and that it may be the first Manhattan garage-as-garage.

But I was not such a big fan as to think it merited Landmarks protection. That Villager article suggests that even the preservationists had at least mixed motives about fighting to keep the garage:

Andrew Berman, G.V.S.H.P. director, said the garage is not only historically deserving of landmarking, but also important because the area has lost so much parking in recent years.


I can't resist (sue me):

don't it always seem to go
you don't know what you've got til its gone
they demolished a 1922 garage
and put up a rental building

© Sandy Mattingly 2010

 

 

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Jul. 20, 2010 - some lofts still get hammered, as 554 Broome Street sale shows


on the other hand ...
With all the talk on Manhattan Loft Guy (and elsewhere) about the 2010 market being a more active and deeper market than 2009 (for example, my July 7 post, 12 examples of the (rapid) velocity of the Manhattan loft market,  and my July 8 post, another sign that 2010 is not 2009, as 60 West 15 Street loft sells) there are always loft sales that did not get invited to that party. The Market is like that.

The "authentic" Manhattan loft on the 5th floor at 554 Broome Street had its nose pressed to the window of that party, as it has been offered for sale since November 2008 (brrrr) and finally closed on July 1 at $1.995mm, fully one-third off the original asking price, and 16% off the last ask.

This condo loft was marketed as a combination of classic Manhattan loft elements (exposed brick, original wood flooring, original metal door over the elevator; and look at those big windows!) and some deluxe modern elements (marble and glass walls in the master bath, black granite kitchen counter, central air, and proper proper names throughout): in short, "original details, design integrity and elegance".

Our data-base thinks this Long-and-Narrow loft (2 windows on the long east wall give 3 exposures) is "1,700 sq ft", Property Shark thinks "1,545 sq ft" and that the building footprint is 25 x 74 feet; the listing is silent about size and dimensions. (As is my custom, I went with the Property Shark sizing for a condominium on the Master List of Manhattan Lofts Sold Since November 2008.)

West Soho, red flags
Usually when I see a listing that claims "West Soho" I think it is west of Hudson, not really Soho on my personal map. But this one is clearly in anyone's Soho, between Sixth Avenue and Varick Street. The good news: this far west, Watts Street picks up the outbound Holland Tunnel traffic, beginning at West Broadway; the bad news: Broome Street is often backed up late afternoons and evenings with enough tunnel traffic as to slow the whole darn thing.

pricing expectations, dashed
The Market priced this condo loft at $1,300/ft (using Property Shark's "1,545 sq ft"), not too shabby for a no-amenities building outside of prime Soho converted in 2000. But my "not too shabby" is not what the seller wanted.

The seller first offered the loft for sale on November 14, 2008 (9 weeks after The fall of The House of Lehman) at ... (wait for it) ... $2.995mm, or $1,938/ft. It is hard to get invited to a party that way....

Give the guy some credit: the seller reacted to The Market quickly, if not sufficiently (with one obvious hiccup):

December 5, 2008 $2,625,000
January 11, 2009 $2,450,000
February 10 $2,290,000
April 1 $2,390,000

stubborn is as stubborn does
One wonders what he was thinking on April Fool's Day in 2009, but it didn't help to move opposite to The Market. One thing he must have been thinking was that was going to hold there (at $2.39mm) and wait. Because he did wait ... 13 months to get a contract at $1.995mm, a further 16% discount.

comping is hard
"Unique" is over-used in the Real Estate Industrial Complex, of course. But this building is on such a small block that has two pretty hard boundaries that it is its own micro-nabe that it is hard to figure what adjustments to make for geography in looking for comps. (It is almost an island, given the difficulties of getting in front in a cab.)

The building is no help, as the two prior sales were both too removed in time (2006) and too different (the first floor is duplexed with the basement; the 6th floor is a penthouse with 1,000 sq ft of terrace).  The only other residential buildings on this block of Broome are tenement-style rentals. Comping is hard!

cluck, cluck
If memory serves, there was a live poultry store on this (very short) block in the early 1980s. Easier to sell a $1,300/ft condo without that.

© Sandy Mattingly 2010


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Jul. 19, 2010 - 22 West 26 Street loft sells quickly above 2010 ask, above 2009 ask


if at first you don't succeed ...
The July 6 sale of the Manhattan loft #3C at 22 West 26 Street illustrates a few things:

  1. a well-priced loft sells quickly in this market;
  2. a loft can sell in 2010 at a price unavailable during the nuclear winter of the Manhattan real estate market in 2009; and
  3. yes, Virginia ... there are still bidding wars (when the price is right).

nice loft + right price + 2010 = quick deal
Unit 3C is said to be "1,800 sq ft" and was described with a certain amount of restraint:

Authentic Flat-iron - Madison Square Park loft. This renovated 2 bedroom plus den home has over-sized city-windows, central air conditioning and features a beautiful open style kitchen with Bosch appliances plus wine refrigerator and granite counter tops, and a lovely master bathroom with Italian porcelain tiles, separate shower, separate soaking tub and dual sinks.

I know this loft pretty well and I find the restraint in the description both admirable and fitting. There probably should be a Stature of Limitations on how long you can call a space "renovated" after the renovation, but the major part of this (nice) renovation was ... a while ago. It was not a single no-detail-overlooked job, but a series of bringing-it-up-to-date jobs. Nothing makes that point better than the main listing photo, with that oh-so-eighties wall of glass brick. (I am pretty sure the glass bricks have been there since about 1985, and 100% certain they've been there since 1993.)

As noted below, the loft was listed for a couple of months in 2009. When it was brought back to market on April 8 at $1.599mm the market loved it: a contract by May 3 (SE says May 5, but our system says May 3) at a slight premium (4%) over the asking price. A successful bidding war concluded within 25 days might not be head-over-heals-rapture, but it is love.

Had #3C closed a week earlier, I would have updated my July 7 post, 12 examples of the (rapid) velocity of the Manhattan loft market, to add one to that table of 12 lofts that closed in June after getting a quick contract. As it is, it is another example of 2010 market velocity. More than that, though, it is another example of how different the 2009 market was from the current market.

$1.65mm did not work in 2009, but in 2010 ...
As mentioned, #3C was offered for sale in 2009, starting at $1.65mm on May 6, dropping to $1.599mm on June 4, and falling off the market on July 7. One infers that the sellers had "a number" in mind and (correctly) perceived that the ... awkward ... market conditions of mid 2009 were not favorable. Not being greedy, they came back to market April 8, 2010 at the last (reduced) asking price but (having been right in July 2009) they found a contract (slightly) above the original (higher) 2009 asking price.

This trend is summed up in the title to my July 8 post, another sign that 2010 is not 2009, as 60 West 15 Street loft sells, in which I continued a theme from my June 15, 808 Broadway seller bites painful bullet, closes off 15% since 2006, and my June 30, Chelsea House kinda sorta holds its own, reveals Truths in The Market, about two other poster children for this phenomenon.

Props to the sellers and to Alex Nicholas of Corcoran for figuring out the 2009 and 2010 markets.

© Sandy Mattingly 2010

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Jul. 17, 2010 - how odd is this loft sale at 107 West 25 Street?


the arm might be a little short
I went back and forth about it, but decided to add the July 7 sale of the Manhattan loft #6C at 107 West 25 Street to the Master List of Manhattan Lofts Sold Since November 2008 even though it was not really publicly marketed and the seller was in distress, two typical indicia of a non-market transaction.

According to both StreetEasy and the inter-firm data-base, this loft went into contract on the same day that it was a new listing (April 30, per our data-base; May 1, per SE, though SE must have some sort of coding error from PruDE for the listing history to show "already sold" rather than "already in contract").

Obviously, there was a 'soft marketing' campaign without an official listing, without any description, and without a floor plan or pictures. Not a scenario likely to result in the best price, as there is no exposure to the broadest market. But if you are going to do that, why bother to "list" at all? (Maybe to assure the agent of being paid, but there are other ways to provide for that.)

The "listing" is about as bare bones as you can get:

Opportunity to create a two- or three-bedroom loft of your dreams with this open corner unit in one of Chelsea’s most sought-after buildings.


No floor plan. No interior pix, just one building facade photo and 3 of the common roof deck. The listing does not say, but we have this loft as "1,318 sq ft" in our data-base. Bare bones.



The inter-firm data-base has a tantalizing note in the Broker Remarks field that is absent form the public listing:


pre-foreclosure sale

So what happened with the sale? My best guess is that the seller faced a lot of pressure from his mortgage holder and was considering his options. Going into foreclosure was one (bad) option, listing the loft for sale was another option (not sure why he wouldn't have done that), and asking his neighbor-the-agent to see what he could get for it was a third option. Presumably, he had a number in mind that (if he got) made it worthwhile to sell and deal with the bank, instead of facing foreclosure down the line. An observer might have said that he needed to sell, but apparently he thought there were other (theoretical?) choices.

hitting the number is not like winning the lottery
As it happened, he reached an agreement with somebody to pay $1.05mm for the coop shares and proprietary lease for #6C, and that was a satisfactory number for him.

There is another mystery: why they would "list" at $1.14mm if they had already reached a deal at $1.05mm? Best I can guess ... they were hedging their bets in case the contract did not close (board problems, financing problem for the buyer, whatever) and they had to come back to the public market. Then, they would have a higher asking price to work from and a pre-existing "listing". But that's just a theory.

I can't see how big a mortgage is on #6C, but if I am reading Property Shark correctly, the only mortgage was put on when it was purchased in early 2002. Thus, that mortgage had to have been at some lesser amount than the purchase price of $650,000. Of course, there are Eight Million Stories In The Naked City, but this owner had enough trouble paying that mortgage that he was "pre-foreclosure" in April 2010.

what's going on in this small loft building?
There are 24 units in this circa-1980 residential loft conversion. Unit 6C is the fifth to sell so far this year. I hit #3E on May 25, modesty pays as 107 West 25 street sells quickly, up a fraction since 2004. I hit #5D and #2C on March 7, 107 West 25 Street closes in six figures, tough comp for neighbors, and I hit #5B in my July 15, 2009 post, 107 West 25 Street buyer discerns deal 15% off list, sits in lap of luxury, so that is 6 of 24 lofts that have sold in the last year.

As they say on late-night television, but that's not all!!! There are at last two more of the Eight Million Stories In The Naked City in this small building, as two units were actually scheduled for foreclosure sales (that never happened) in 2008 and 2006 (per Property Shark).

One day I will do a post about the kind of cash-flow burden that a couple of shareholders in a small coop put on their neighbors, and another post about why there is an advantage to a coop in having a bank mortgage instead of a buyer paying cash, but that day is not today.

24 lofts, now 4 Manhattan Loft Guy posts
Looking back, 107 West 25 Street has provided a lot of grist for the Manhattan Loft Guy mill. As I said in that March 7 post:

This small building now qualifies as a Manhattan Loft Guy fave, as I also hit on January 10, 2008, 107 W 25 goes over ask / back story to NY Times item. That post told the story of #4C and of a different market. #4C is said to be "1,300 sq ft" (including the sleep loft??) and was then newly renovated. Hard to believe that the above-ask October 2007 clearing price of $1.445mm was not the product of juicing on a Barry Bonds scale, given that narrow range of trades (of smaller lofts) more recently. Off the juice, that same loft sold in May 2005 at $1.225mm, still ITAL a hefty premium over the July 2004 price of #3E ($962,680).

circling back
Fascinating as all this history is (about #6C and about 107 West 25 Street) ;-) ITAL I remain conflicted about including this loft in The Master List. Provisionally, I have added two asterisks to this entry on the spreadsheet (unexplained on the spreadsheet, so I hope people read the darn blog). I guess my main excuse ITAL for doing that is that the buyer and seller seem to no connection to each other. So this is a private sale, but not a related party transaction, with the buyer trying to pay as little as possible and the seller trying to sell for as much as possible.

Yet the fact remains that the seller was under duress and this loft was not exposed to the full market. Depending on condition, the sale may or not be consistent with (for example) the sale of #3C on March 18 at $1.2mm. That "1,300 sq ft" loft was sold as a premium property:  "[n]o detail is overlooked in this sunny loft". That presents a stark contrast to the bare bones description of #6C ("1,318 sq ft"): "[o]pportunity to create a two- or three-bedroom loft of your dreams with this open corner unit".

So the difference between #3C in March and #6C in July is just over $100/ft. That seems like a more than reasonable value difference if #6C needs work, as the listing implies. I am going to leave the asterisks, but I feel better about the price for #6C as market-reflective, notwithstanding the stated caveats.(Note the contrast with the October 2007 above-ask sale of #4C at $1.445mm; in a different world, indeed.)

Thanks for sticking with me, through these twists and turns. Your reward is a set of links to other Manhattan Loft Guy posts about distinguishing true market transactions from "sales" at less than arm's length, starting with my April 27, 48 Bond Street closes up 400% since 2008, but ...  in which I observed:

Of course, I have fretted before over the difficulties in interpreting 'comps' in a world in which it can be hard to determine what is "arm's length", particularly after my sabbatical when I had many, many loft closings to enter on the Master List of downtown Manhattan loft sales between $500k and $5mm. For more on the arm's length conundrum, see:

© Sandy Mattingly 2010


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Jul. 15, 2010 - more developer haircuts, as 415 Greenwich lofts cut to close


big discounts, little discounts
The Manhattan lofts (and townhouses) at Tribeca Summit, 415 Greenwich Street, have had a ... errrr ... difficult time selling out. The project started marketing in 2006, with the first closed sales in this 66-unit development in the First Quarter of 2008. (Can you spell P  E  A  K ??) I have noted five sales in June on the Master List of Lofts Sold Since November 2008, as sales wind down here, four of which were at substantial discounts from the last asking price. (Can you spell N  E  G  O  T  I  A  B  L  E ??)

  "sq ft" deed cleared at asked last discount 2006 price orig discount
               
#4C 2,261 6/29/2010 $3,150,000 $3,900,000 19.2% $3,250,000 3.1%
#6H 2,781 6/21/2010 $3,381,608 $4,400,000 23.1% $3,715,000 9%
#5H 2,781 6/10/2010 $3,054,750 $4,235,000 27.9% $3,665,000 16.6%
#5E 1,751 6/7/2010 $1,960,131 $2,800,000 30% $2,600,000 24.6%
#7H 2,781 6/4/2010 $3,665,700 $4,100,000 10.6% $3,815,000 3.9%

"1960s game shows for $200, Alex"
Of course, I have no idea of the finances of this project, other than to point out the obvious fact that any project that started selling in April 2008 that has not finished yet has spent many ITAL more dollars carrying inventory than originally planned. Whether it is lenders who are creating a sense of urgency, or simple prudence, the June 2010 sales show an attitude Monty Hall would be proud of.

Notwithstanding that this developer has been at this far longer than originally planned, it is interesting that the original prices were much closer to the clearing prices than the last asking prices. The typical pattern was that the developer raised prices a couple of times before they were ready to close any units, then held (high) before formally taking a unit off the market (were they rented??), then bringing them back in 2010 at the last (high) price. From which they were very willing to negotiate. #6H is an example:

March 23, 2006 new $3,715,000
May 15, 2007   $3,865,000
April 14, 2008   $4,400,000
May 4, 2008 "delisted temporarily"  
     
Jan 12, 2010 back on market $4,400,000

Note that the developer was secretly negotiable on #6H, ending up the negotiation 23.1% off the last ask of $4.4mm.

a la 166 Perry Street, 135 West 14 Street

The last time that I hit on a developer offering big haircuts was my April 1, developer takes 27.2% haircut to close 166 Perry Street. The new development at 135 West 14 Street took a smaller haircut when I hit it on January 19, the last 13% haircut drives new development deal at 135 West 14 Street.

This is not a secret technique.

© Sandy Mattingly 2010

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Jul. 14, 2010 - Times article disconnect / why developers should build schools UPDATED


is it about the links?
Yesterday's NY Times article by Christine Haughney in The Appraisal feature, Parents’ Real Estate Strategy: Schools Come First, got a lot of attention in the blogosphere, and probably in the real world, also (of course, the article got linked on Curbed and many other sites; The Google returned 2,630 results, using the exact title of the article; it also got a discussion thread on StreetEasy).

Did anyone else think that the middle of the article got left out?

The pretty explicit headline was followed by a great lede:

When [the featured family] started shopping for an apartment in Manhattan in 2007, their first call was not to a real estate broker. Instead, they hired an education consultant...

From there, it was a short distance to discussion that the public school this family paid a premium to be zoned for is overcrowded, thence to a

struggle on the Upper West Side between parents like [this family] who want more classrooms — many more — and the developer of a new project who is offering to build a school that some say is not big enough [and]

[while] Extell Development has already offered to build a 75,000-square-foot school for 480 students for children in kindergarten through eighth grade, ***

[but] Parents say that is not big enough. They want Extell to build a school that accommodates six classes per grade or roughly 1,250 students, and they want Extell to pay for more of it.

In support of this viewpoint, the Times offers the:

co-president of the P.S. 87 Parents Association, [who] said that at her school the number of incoming kindergartners more than doubled, to 241 in 2010 from 93 in 2007. She added that these numbers were only going to grow, based on the growing presence of Gymborees and baby stores in the neighborhood.

 

the missing middle
Here is what I expected to see in the article, but did not:

Since 2005 [or, insert your preferred date], PS 87 enrolled [pick a number] new students from new condominium developments.

Or at least something like:

Along Riverside Boulevard, new developments since 2005 have added xx apartments to the PS 87 zone, about [80%??] of which have 2 or more bedrooms. While it is impossible to say how many of these apartments contain families with small children, [some expert] estimated that yy% is a reasonable guesstimate, of which more than [half?] are likely to send their children to private schools instead of public schools.

The best that Haughney can do is a vague statement by someone who may (or may not) know what he is talking about. Maybe the president of District 3’s Community Education Council has data to support this statement, but he didn't share:

“This overcrowding has been caused to a fair extent by overbuilding,” [he] said .... “This school [the proposed Riverside Center school] has got to be big,” he said. “It’s got to be paid for by the developer and it’s got to be among the first buildings built.”

who goes to public schools?
Certainly there are some families who pay many millions of dollars to buy apartments who send their children to public schools; I just don't know how many. But I would be surprised if overcrowding at PS 87 "has been caused to a fair extent by overbuilding”, if by "to a fair extent" the guy means "to a significant extent". You would think there are experts who have a pretty good idea about that, but I am not one of those experts.

I do know that the median price of the 34 apartments 2 bedrooms or larger sold at The Rushmore, 80 Riverside Boulevard (the poster child for Upper West Side over-development, I would say) so far in 2010 is $2.5mm. I could be wrong, but I just don't see a lot of PS 87 kids coming out of this building.

another (more fair) cause of over-crowding in schools?
I would love to have a data source from which to estimate how many small prewar apartments have been combined into "family-sized" units. That's what that featured family from the Times article did, in fact. (Not that there's anything wrong with that.)

They bought what had been originally a studio and a one-bedroom. No children were likely to go to PS 87 from either of those apartments before they were combined, but now they have a 2nd grader. It looks as though there were 109 units in the building when it was converted to a coop in 1965, but Property Shark thinks there are only 65 residential units currently. That is a lot of combinations. I bet there are more than a few PS 87 students from that building's combined apartments.

There is another example of where (some) school overcrowding can come from. The Times article closes with a (rather entitled) father who thinks he made a "pact" with the City. That guy is doing what many in my parents generation did: cramming a family into a small rental apartment. That guy is living with a 4-year old, a 2-year old (and a wife?) in a rented 900 sq ft apartment across the street from their preferred public school.

He thinks that is a sacrifice, and that the City owes him:

“Has my family sacrificed to stay in this zone? Absolutely,” [the (entitled) dad] said. “When we made the decision to stay in the city, we entered into a pact with the city. That pact was that my child would go to his or her zoned school.”

I don't think he read the fine print about what it means to be zoned for a particular school.

Both of these families are doing what they think is best for themselves, by buying or renting in a school zone they prefer. One family is not happy with the staggered schedule for their daughter when she was in first grade; the other will not be happy unless both their kids get into PS 199 from a waiting list.

the cause
The same dynamic that caused these families to make these sacrifices has caused developers to increase the number and proportion of "family-sized" apartments in new developments: that fact that the City is seen as a viable alternative to the suburbs because it is thought to be a safe environment and/or because some families have boatloads of money to throw at private schools. I am not going now to track down the many, many articles in the Real Estate Industrial Complex discussing this phenomenon, in part because this post is already too long (and taking too long) and in part because regular Manhattan Loft Guy readers are probably well familiar with the topic.

Whether you think the trend started in 1987, 1995 or 2002, I am confident that demographers could prove to you that more families stayed in the City after that first or second child than in previous generations, which would have fled to the 'burbs by the second birth (if not before). One result was that families combined two smaller apartments (like the featured family); another result was that families squeezed into rental spaces near 'good' public schools rather than having more room near a not-so-good school (like the entitled family); yet another result was that developers added 3-bedroom, 4-bedroom and gazillion-bedroom units to their new development floor plans.

But I am skeptical about how many of those families in ultra-large new development apartments are using public schools. (I am also not going to track to link to the articles about the explosive growth in private school applications and enrollment, but I am highly confident that that "has been caused to a fair extent by overbuilding".)

circling back
I have gone a long way from where I started this post; let's tie some things up.

The Times article faked me out because I thought they were doing a hot-PS-zone-drives-Manhattan-real-estate-prices article. The quotes from the featured family line up perfectly with such an article (especially about how they "stretched financially" and put “[a]ll of our money ... in our little two-bedroom apartment”).

There are at least two great articles to be written that extend these two paragraphs (but Haughney did not do either one):

Families like the [featured family] helped raise the tide of New York real estate prices in recent years by bypassing the suburbs and, instead, paying premium prices for apartments near high-performing public schools in places like TriBeCa and the Upper West Side in Manhattan, and Park Slope in Brooklyn. Developers, in turn, built costly family-size apartments near the same schools, knowing they would draw parents hoping to avoid the cost of a private education.

But there were never any guarantees. Schools fill up. Zones are altered by the Department of Education, which sometimes switches the blocks that each zone comprises. Children in New York City, after all, are guaranteed a public education, but not necessarily in the school that their parents want, or in the one that is closest.

Instead, she doffed her NY Times cap at these topics, without substantiating the assertion that new developments, per se, "cause" overcrowding (as I addressed above). But she also did not consider whether developers were really focused on good public school districts when they decided where to develop (she seems to assume that this is obvious), as opposed to considerations such as (a) ease of lot assembly, (b) a big enough zoning / FAR 'envelope', (c) river or other views. I am almost certain that public schools were irrelevant to developer thoughts about the Time Warner Center or 15 Central Park West.

Getting closer to real Manhattan loft concerns, is PS 234 a more decisive consideration for new development decisions in that funny triangle south of Canal Street, or is that Tribeca is Tribeca is Tribeca (with PS 234 as only one element of what makes that triangle Tribeca)? Rhetorical device be damned ... the MLG answer is no.

[UPDATE 7.15: I probably bit off here more than I could comfortably chew in one post, but let me at least include what should have been an obvious factual reference in any discussion of Tribeca and public schools: the recent controversy over the boundaries for PS 234 in Tribeca, covered extensively by The Downtown Express (for example, here, with maps). The very newsworthy angle to this story of course involves a major new development, 101 Warren St, which is in the PS 234 zone under either plan then under consideration, while the 'affordfable housing' compenent of that same overall project (89 Murray St) would be out of the PS 234 zone under one proposed map.

I continue to think that 101 Warren Street is where it is because it was one of the last substantially empty really large development sites in Tribeca, and not because it is down the block (and zoned for) PS 234. But that point may require more analysis to be persuasive to some readers. Not gonna go there now, as this post has really gone too long, and perhaps too far afield. i still would like to see data in these articles....]

psyching out the Old Grey Lady
Maybe my NY Times expectations are just too high, but I am prone to disappointment when the Lady carries an article with holes. You can do better! I wish they had fleshed out more the central (assumed) point: that the kids from the new developments are the ones causing the (unnatural) crowding in top public schools.

But maybe some of the fuzziness is because Hauhgney had terrific quotes from two very quotable families. The piece starts and ends strong, with these two families as anchors. But there's much more sizzle than steak (block that metaphor??) between the appetizer and the dessert.

I hate when that happens....

© Sandy Mattingly 2010

 

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Jul. 13, 2010 - 56 East 11 Street loft was hot in 2005, sold again in 2010


those were the days!
When the Manhattan loft on the 8th floor at 56 East 11 Street came to market at $1.899mm way back on November 11, 2004 it was a hot, hot, hot listing, finding a contract within two weeks at $2.005mm. Five years later, those January 2005 buyers offered the loft for sale at $2.495mm, but they did not get anywhere near that kind of premium over their original purchase price. They did get a contract within 3 months without having to drop their asking price, though they did have to swallow a big discount, closing on June 16 at $2.1mm.

ugly math: 2010 - 2005 = 4.5%
The gap between the bidding war price in 2005 and the tough negotiation from $2.495mm in 2010 is a mere $95,000. That tough negotiation off the $2.495mm asking price ended up 15.8% off the ask, making me wonder if they would have done better at a lower asking price. But that is idle speculation....

published loft, with some issues
At first blush, the very enthusiastic recent listing description suggests that the "meticulous renovation" and "finest materials and craftsmanship" were added since 2005, making that 4.5% gain over five years more than evaporate. But the 2004 listing description is perfectly consistent with the 2010 description, with many of the same proper proper names, so it is pretty clear that the 2010 sellers bought the loft in published form in 2005.

The pix show the high quality finishes, fixtures and mill work. The footprint is a Long-and-Narrow that is pinched a bit in the middle by the building's common stairway. With the master suite across the back, the second (interior) bedroom is only 10 x 12 feet, tucked behind that (pinched, but) beautiful hallway woodwork. Despite being "2,000 sq ft" and 23 feet wide, there is little flexibility to the current floor plan without significant renovations of those beautiful finishes and woodwork. A master suite, an interior bedroom, and a small office ... it is easy to see how one could grow out of space like this, despite the overall size.

floor plan goof

There has to be a door somewhere from the master bedroom to the closets that lead to the master bath, but none is shown on the floor plan. I am 101% sure that the way to get to the master bath does not involve the fire escape.

© Sandy Mattingly 2010


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Jul. 12, 2010 - cash was king when 152 Wooster Street loft sold


scooping ACRIS
You can't tell (yet) on StreetEasy or in the city's system, but the Manhattan loft #5B at 152 Wooster Street sold on June 29 for $2.85mm in cash. That cash is significant, as the seller had a "much higher" offer from someone who would have put down 50%, but took the cash deal instead.

long live the king
I am shocked that cash would command a large premium over a 50% down deal, especially in a small coop loft building described as "intimate, relaxed & reasonable". Every seller makes her own choice about how valuable cash is, compared to the risk that another buyer won't get financing or pass the board. But I am shocked about this one. I will talk more about that, before talking about this specific loft.

For a coop around $3mm, the attractions for a seller in dealing with a cash buyer are

  1.  no uncertainty about a buyer getting financing,
  2.  (presumably) a stronger financial package to present to a board (i.e., a slam dunk for approval),
  3.  (possibly) a shorter time before closing

Note that the only time you worry about cash buyer vs. mortgaged buyer is when both buyers are well-qualified.

If the two competing buyers are not both well-qualified, then they are not really competing ... a seller would only consider selling to the qualified buyer, and not the unqualified buyer, regardless of other circumstances. (By the way, it is possible for a cash buyer to be unqualified to purchase a coop, but that is a topic for another day.) Note also that any timing advantage is likely to be quite limited, as the coop board application + approval process already builds in a lot of time, more than most banks would need to commit to a loan and to prepare for closing.

how valuable is cash?
In general, the value that a particular seller puts on an all cash deal depends completely on that seller. How worried is the seller about getting a buyer approved by the board? How long have they been on the market? Is the cash deal within the seller's comfort zone, or does the seller have to painfully compromise to accept the cash?

For a recent transaction I worked on, that spread turned out to be less than 5%: that seller would have rejected a buyer-with-mortgage in favor of an all-cash deal in a coop if the cash buyer's top bid got within 5% of the other (qualified) bidder.

Based on what I was told about the 152 Wooster Street #5B sale, that seller put a much higher premium on the cash deal than any seller I have dealt with.

lovely loft, lovely "project"
As is, the loft is two living spaces, with separate entrances and separate kitchens, suiting the former long-time owners. It is not hard to imagine that the walls went up (and flooring was laid down) over time, as their needs and funds changed. It resulted in some odd choices, in retrospect, such as the larger space having two side-by-side bathrooms that (although they are right next to the master bedroom in the floor plan) are a long way from the master bedroom when you are using the doors, and there are places where the floor is at different levels. But what space!

The ceilings are 11 feet, but (trust me, I have been in it) feel higher. The "3,325 sq ft" footprint is nearly square, with the long east wall being mostly windows. From the 5th floor on this block just below Houston Street, the east light is amazing, and the rooftop views extend quite a ways. The south windows (4) are not nearly so interesting, as they are over the parking lot next door. But there is the possibility of adding one or more south windows toward the corner, which would probably be between-building windows, so would at least provide light and an open look.

a rarefied market segment
The math for any buyer (cash or mortgage) involves costing out a gut renovation and comparing the Purchase + Reno dollars to buying a fully finished coop loft in prime Soho. Of course, there are not many coop lofts this size in prime Soho for sale at any price.

There was no market for this loft last year, as it was offered from March 2009 into December, at $3.39mm and $3.34mm, before coming back to market in February at $3.1mm, when it took just over two months to find a contract. If they had a bidder "much higher" than the $2.85mm cash deal that they did, I would guess they would have gotten the same bid off the old asking price as they did off the last one.

Figure a minimum of $750k for a quality renovation of "3,325 sq ft". Any buyer would expect to pay cash for that, so even the 50% down bidder would have been prepared to pay about $2.25mm in cash to buy and renovate, taking a mortgage of about $1.5mm. That is a lot of cash. That cash buyer is looking at a likely minimum of $3.6mm to buy, gut and renovate. That is really a lot of cash.

Yes, the 2010 Manhattan real estate market is a better market than 2009 (more buyers, with more money, and [probably] more mortgage lending available), but this is still a narrow slice of the market.

© Sandy Mattingly 2010


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Jul. 10, 2010 - what a motivated seller looks like, as 426 West Broadway loft sells


a poster child
The Manhattan loft 426 West Broadway #2G sold on June 23. Aside from being a happy day for the seller, that occasion shows us what someone who really wants to sell will do to, well, sell. To say that these folks came to market in a tough market is a bit of an understatement, as they started two weeks after The Fall of The House of Lehman, on September 28, 2008, at $1.875mm. They hung in there until May 1, 2009, eventually getting down to $1.695mm before admitting they'd been beaten by The Market and taking a breather on May 1, 2009.

persist, drop price; repeat
But they really wanted to sell, so when they came back to The Market on February 13 at $1.795mm they briefly tested the theory used successfully by a bunch of lofts in 2010. (See my July 8, another sign that 2010 is not 2009, as 60 West 15 Street loft sells, my June 30, Chelsea House kinda sorta holds its own, reveals Truths in The Market, and my June 15, 808 Broadway seller bites painful bullet, closes off 15% since 2006.)

But they really wanted to sell, so when that price did not work they dropped quickly (by March 24) to that tried-but-so-far-untrue price of $1.695mm. But they really wanted to sell, so when that price did not work they dropped quickly (by April 6, a mere 2 weeks later) to $1.649mm. That price worked (because they really wanted to sell), in that it generated an offer that they were able to negotiate to $1.52mm to find a contract by April 29 and that closing on June 23.

memo from the Department of Redundancy Department
To recap: these sellers got frozen out of The Market during the nuclear winter of late 2008 - Spring 2009, but proved that they (yes, caps this time) REALLY wanted to sell by dropping the price twice within 10 weeks and negotiating a further 8% off the last asking price. Looks to me as though they really wanted to sell....

meet the (oh so stubborn, similarly motivated) neighbors
Maybe the #2G sellers were inspired to come back to The Market in February and to do what it takes by their upstairs neighbors in #6G. These penthouse sellers were also trying to sell during a frigid market, were also unsuccessful for a long time, but stayed in The Market while dropping the price enough to (eventually, very eventually) earn a contract.

April 15, 2009 new $2.6mm
April 24   $2.4mm
August 10    $2.325mm
waiting...    holding...
January 28, 2010 contract  $1.96mm
March 26 closing  $1.96mm

 Look at that patience, holding at $2.325mm for more than 5 months. Look at that flexibility, negotiating to a contract at a 16% discount by January 28. Assuming that the #2G owners were aware of this negotiation (at least in broad terms), imagine how they took the long-awaited penthouse deal as inspiration to come back to The Market and to do what it takes. ITAL

Inspiration is a wonderful thing! As is the fortitude to take what is available in The Market, even if it is way less than they wanted to get when they started. (19% less, in the case of #2G; 25% less in the case of #6G.)

If you really want to sell, you gotta do what you gotta do.

A tip of the Manhattan Loft Guy hat to both sellers and their agents.

© Sandy Mattingly 2010
 

 

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Jul. 9, 2010 - what happened on the 5th floor at 73 Worth? 3rd sale this year


an idea spreads
73 Worth Street is not a big building as relatively recent Manhattan condo loft conversions go, with 30 lofts. Nor is it an old building, with the first sales (following some protracted sponsor 'issues') in April 2005. The very first resale was not until a year ago, #4B. The next three resales were all on the 5th floor: #5B on January 21; #5D on February 4; and #5C on June 2 (in NY Post Just Sold feature this week, but not yet on StreetEasy or in ACRIS).

That's a little weird, with three units on the same floor changing hands in 6 months, after only one other in the building has sold since 2005. I doubt it has anything to do with that floor per se, but it is striking.

It is also weird that the Post scooped StreetEasy with details about the closing, but I will take it:

TRIBECA $2,060,000

73 Worth St.

Prewar two-bedroom, 2½-bath loft condo, 2,238 square feet, with kitchen with wine refrigerator and Sub-Zero, Wolf and Bosch appliances, master bath with soaking tub and separate shower, media room, keyed elevator and balcony; building features doorman, garage and roof deck. Common charges $1,757, taxes $1,197. Asking price $2,195,000, on market 29 weeks.

How did these neighbors do, in comparison to each other? From the

Master List

:



  "sq ft" deed cleared at $/ft on market asked contract orig price prior sale prior price
#5C 2,238 6/2/2010 $2,060,000 $920 11/14/2009 $2,195,000 3/6/2010 $2,250,000 4/21/2005 $1,345,719
#5D 1,859 2/4/2010 $1,687,500 $907 11/4/2008 $1,850,000 12/10/2009 $2,250,000 4/22/2005 $1,087,250
#5B 2,571 1/21/2010 $2,585,000 $1,005 4/24/2009 $2,595,000 1/4/2010 $2,750,000 9/30/2005 $2,887,250


Both #5D and #5B slogged through the post-Lehman nuclear winter for the Manhattan real estate market, taking 13 and 7 months to get to contract in difficult market conditions. Yet the pricing is remarkably similar, once you make allowances for the different footprints.

The "B" line at 73 Worth St has a terrific corner layout, with windows on one narrow side and on one long side; the "C" and "D" lines, in contrast, are classic Long-and-Narrow footprints, with no side windows and two bedrooms in the back. #5C did a bit more bragging about finishes in its listing description, name-dropping a "renowned designer" and using the word "custom" a lot, but The Market does not seem to have appreciated that #5C was in a much better condition than the new-and-high-end-in-2005 condition of #5D.

2003 pricing and 2005 pricing for 2005 sponsor sales
Remember those protracted sponsor 'issues' I mentioned? They account for the differences at which these three neighboring lofts in identical condition were sold in 2005. The original contractor for this conversion could not finish the building, and the developer went bankrupt. The lenders took control and finished the building, but in the meantime the early contract signers were given the right to rescind; the remaining lofts in the building were marketed again in 2005.

The #5C and #5D buyers signed contracts in 2003; the #5B buyer signed shortly before closing in 2005. The contrast between 2003 contracts and 2005 contracts is quite evident from the StreetEasy page for 73 Worth, with many differences in scale similar to the spread between the sponsor sales of #5C and #5D. While those early 2003 signers got a "deal" (compared to the 2005 contracts), their lives must have been pretty messy. They had a contract deposit in escrow and one bit of bad news after another about whether the building would ever be finished (and, if finished, if they wanted to still live there).

that first resale was ... painful
Remember that I mentioned that #4B was the first resale in the building a year ago? I hit that sale when it closed in my June 26, 2009, 73 Worth Street closes by biting a very large bullet in one bite. I related a bit of the sales history of the building (and the history of no-sales), and Reader Jess provided a link to information about a large assessment to condo owners here in 2009. All of which may help explain why the #5B seller in January 2010 (who got the highest price per foot of the three resales on the floor) sold in January 2010 at a 10% discount from the original sponsor purchase in September 2005.

© Sandy Mattingly 2010


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Jul. 8, 2010 - another sign that 2010 is not 2009, as 60 West 15 Street loft sells


today's trend: trying again might work
Yesterday's post, 12 examples of the (rapid) velocity of the Manhattan loft market, provided data confirmation that the velocity of the Manhattan loft market was pretty high, at least for the last three months. Today I want to talk about a different phenomenon that also confirms that the 2010 market (so far) has been very different form the 2009 market.

The Manhattan loft on the 3rd floor at 60 West 15 Street had been on the market last year, from April to November, asking $3.5mm, proving that that was the wrong price in that market. When they brought it back this year (January 22) and found a contract within 7 weeks (March 11), they proved they had found the right price, right?

Right, indeed, but the successful 2010 asking price was the same $3.5mm as the unsuccessful 2009 asking price, and it was pretty successful, indeed, as it generated a deal at $3.45mm, a mere 1.4% discount.

The loft is said to be "3,133 sq ft" of "beyond triple mint" that is not quite a classic Long-and-Narrow, with a master bedroom that juts out of one narrow side, and three windows on one long side (enough to have a windowed kitchen and two bedrooms on that long wall). That is one huge kitchen (19x24 ft), described with a nice sleight of hand (if you like broker babble sleight of hands) (note my bold): "a gourmet kitchen the likes of which is found in the pages of Metropolitan Home!" Sleight!

the mints have it
The condition must be awfully nice, as the loft sold on June 23 at $1,100/ft. Not bad for a coop loft in a no-amenities small building (5 units) in east Chelsea. Especially as the 4th floor sold in May 2009 at only $1.95mm as a gut renovation candidate ("design a masterpiece"), as there is an awful lot of room between $1.95mm + reno and $3.45mm with three mints.

On the other hand, the mints were more powerful (and presumably more fresh) in August 2005, when the 3rd floor sold for $3.595mm. For those scoring at home, that's 4.2% of slippage from August 2005 to June 2010.

back to my point
The trend of which 60 West 15 Street #3 is a part is that at least some prices that were unsuccessful in 2009 were successful in 2010, showing that the first half of 2010 was a stronger market (more active buyers) than the market in 2009. I say 'trend' because I have seen this before, and noted it on at least two prior occasions.

In my June 30, Chelsea House kinda sorta holds its own, reveals Truths in The Market, about #8D at 130 West 19 Street, I described that loft as

a poster child for how The Market has thawed since the post-Lehman nuclear winter. It had been offered for sale for four months in early 2009 at $1.625mm and $1.5mm, without success. When it came back to the market on April 6, 2010 at $1.575mm it found nearly immediate success (contract by May 1). manifestly, no buyer was available at $1.51mm a year earlier.

In fact, in that June 30 post, I linked to my June 15, 808 Broadway seller bites painful bullet, closes off 15% since 2006, about another poster child:

While this clearing price [$720k] is a 15% discount from the last time this loft changed hands (July 2006, $849k), the more interesting thing about the recent sale is that it did not sell last year, despite (eventually) hitting a price at which it should have sold last year. Then, after taking a few months off, it came back above the prior asking price yet found a contract within a month.

there's always another hand
On the other hand, just to prove that any generalization about the market cannot apply to all transactions, there are the two identical lofts at 129 Lafayette Street that sold at identical prices, though one sold in November 2009 and the other on June 3, 2010, which I hit in my June 16, 129 Lafayette sells but NOT because of the designer (contra The Observer). In that case, the market reaction to the identical lofts was identical, despite the very different market conditions when the lofts went to contract in September 2009 and April 2010. Either that pair of sales is an outlier, or just maybe that was a too-subtle-to-be-noticed indication last September that the nuclear winter was ending.

If an outlier, I am not going to worry: there are always outliers. I am confident that there is a trend for some unsuccessful 2009 prices to be successful in 2010. (Of course, some unsuccessful 2009 prices were very wrong, to a degree that can't be 'cured' by bringing them back in 2010.)

© Sandy Mattingly 2010

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Jul. 7, 2010 - 12 examples of the (rapid) velocity of the Manhattan loft market


velocity, observed, in the rear-view mirror
I chewed on the loft-specific data in the major firms' Second Quarter Manhattan real estate market reports in yesterday's post, how did lofts do last quarter compared to overall Manhattan real estate market?. (Woo-hoo to self: that post generated a link from The Real Deal!) My major take-away was that transaction volume and Days on Market showed a much more vigorous loft market, even than the overall market. "In other words, [even more-so than the overall Manhattan market] the loft market was essentially asleep a year ago and now has awakened."

There's no highly probative data for this, but the general assumption among agents was that the paucity of sales a year ago (the nuclear winter I keep referring to) was more a function of buyers staying home than sellers mis-pricing lofts. Now, with the loft market awake, there's probably still no good way to prove whether the buyers have moved more than the sellers, or vice versa. After all, an actual sale proves only that the buyer and the seller met at a mutually agreeable price, not who traveled further to get there. (A long story for another day, perhaps: I don't think that listing discount is as good an indicator of this dynamic than Days on Market.)

from trees, to forest
Which leads me to the list below of some of the Manhattan lofts that sold in June, all 12 of which found contracts within five weeks of coming to market. When I was updating the Master List of Lofts Sold Since November 2008 over the weekend (before I had delved into the quarterly market reports) I noticed a string of lofts that had sold quickly ... what struck me as an unusual number (or an unusual concentration) of lofts that sold quickly.

I have hit some of these lofts in individual posts when they closed (June 21, another quick sale, as 1 Hudson Street closes up 10% AND down 10%, June 16, 129 Lafayette sells but NOT because of the designer (contra The Observer), June 15, 808 Broadway seller bites painful bullet, closes off 15% since 2006, June 14, 20 Desbrosses Street loft sells above ask, quickly, with pellet-blasted brick and more (dramatic photos!)), but they have power as a spare list.
 

  "sq ft" deed cleared at on market asked contract
105 Wooster St #5B 1,253 6/29/2010 $1,605,000 3/16/2010 $1,695,000 4/12/2010
39 Vestry St #2A 2,500 6/18/2010 $2,871,287 3/6/2010 $2,999,000 4/13/2010
130 West 19 St #8D [Chelsea House] 1,338 6/18/2010 $1,510,000 4/6/2010 $1,575,000 5/1/2010
7 East 20 St #6R 1,777 6/16/2010 $2,600,000 3/15/2010 $2,695,000 4/15/2010
252 Seventh Av #10J [Chelsea Mercantile] 1,344 6/15/2010 $1,495,000 3/25/2010 $1,495,000 4/27/2010
224 West 18 St #1C 1,994 6/14/2010 $2,575,000 2/10/2010 $2,695,000 3/6/2010
1 Hudson St #4 2,000 6/11/2010 $2,200,000 2/27/2010 $2,000,000 3/12/2010
20 Desbrosses St #2 2,224 6/9/2010 $2,911,000 3/12/2010 $2,800,000 4/5/2010
101 Warren St #2460 2,180 6/9/2010 $3,625,000 2/23/2010 $3,425,000 3/24/2010
808 Broadway #2M 950 6/7/2010 $720,000 2/19/2010 $749,000 3/17/2010
140 West 23 St #2A 625 6/3/2010 $580,000 3/7/2010 $595,000 4/6/2010
129 Lafayette St #4A 2,363 6/3/2010 $2,800,000 3/10/2010 $2,895,000 4/14/2010

 

  • that is 12 quick sales out of the 50 June loft closings on the Master List (others were "quick", but not quite this quick)
  • the largest listing discount was 5.3% (105 Wooster St #5B)
  • one sold at the asking price
  • three sold above the asking price

Note that I am not interested (for this post) in the price levels, only in the velocity. (In fact, 2 lofts on the list last sold since 2005 above the recent closing price, while 3 lofts on the list sold since 2005 below the recent sale; the others had no resales since 2005.)

 

current trend, or past trend?

 

The really interesting question is whether or not the pace of the market will continue (because there is continued strong buyer interest matching sellers really interested in selling) or whether this trend will peter out (either because of a summer slow-down, or because the second quarter sales sated the pent-up demand from the nuclear winter, or because ...).

 

As you see from the four posts I did last month on four of these sales, I tend to notice things like "quick contracts", and often comment about individual sales.  But I am often tree-level, rather than forest-level, on a daily, on-going basis. I will try to pay enough attention to offer informed commentary, going forward, and point out (apparent) trends when I see them. This one looks real.

 

© Sandy Mattingly 2010

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Jul. 6, 2010 - how did lofts do last quarter compared to overall Manhattan real estate market?


a focus on the data from the Second Quarter
As is my wont, my first posts about the major firm reports from the Second Quarter and Manhattan real estate were about the drama of the reporting, this quarter 'enlivened' by the drama of the competition between the Wall Street Journal and the NY Times. To recap: June 28, first Second Quarter Manhattan real estate market report numbers out, and two posts on July 1, for real: Second Quarter Manhattan real estate market report numbers outand quick hit: WSJ finds Manhattan real estate market "healing".

Looking at the numbers reported in the market reports for Manhattan real estate in the second quarter of 2010, the loft niche out-performed the overall Manhattan market in terms of transaction volume, even with overall market volume up about 80% (The Miller has loft sales volume up 264%). Comparative pricing data was mixed in the second quarter. The three major firms were in substantial agreement about price-per-foot trends, both overall and for the loft niche, with no significnat difference for lofts compared to the overall Manhattan real estate market. For median prices, there is a largely similar price story in the four market reports overall, but the two firms that report median prices for lofts head in oposite directions and show more dramatic changes than in the overall market. Sigh.

The two tables below break out the (limited) loft-specific data from the three major firms that do quarterly market reports for Manhattan real estate and then provide some (deeper) overall market data from these three firms and from StreetEasy. [Links to the reports are here (Miller Samuel), here (Corcoran),  here (Terra; the Halstead version), and here (StreetEasy).]

Loft data from the Second Quarter 2010 Manhattan real estate market reports, with year-over-year comparisons
 

median sales price avg price per foot transactions days on market inventory
Miller Samuel $1.57mm [down 15.9%] $1,145 [down 4.3%] 262 [up 263.9%] 80 [down 42%] 548 [down 25.6%]
Terra Holdings
$1,066 [unchanged]


Corcoran $1.64mm [up 21%] $1,087 [up 2%]


Overall market data with year-over-year comparisons


median sales price avg price per foot transactions days on market inventory
Miller Samuel $899k [up 7.6%] $1,051 [down 0.5%] 2,756 [up 79.9%] 105 [down 35.2%] 8,157 [down 13%]
Terra Holdings $843k [up 6%]
  2,522 [up 81%]
112 [down 13%]

Corcoran $810k [unchanged] $1,040 [up 1%]

9,406 [down 24%]
StreetEasy $800k [up 2.6%]   3,500 [up 65.2%] 153 [down 6.4%] [down 6%]

those surging lofts
Long-time Manhattan Loft Guy readers know that I prefer The Miller's data on lofts because he provides the best sub-set of data regarding Manhattan loft transactions. As with the reports from the First Quarter (see April 6, how did lofts do last quarter compared to overall market?), the price data comparisons in the Miller Samuel report are a bit sloppy, with lofts having taking a bigger hit on median sales price than the overall market, but with price-per-foot averages moving similarly for lofts and the overall Manhattan market.

Again, like last quarter, that suggests to me that the median price difference is more a matter of the mix of lofts that sold being smaller this past quarter than a year ago. I quoted The Miller about the volatility in different price indicators (average or median sales price, price-per-foot) in my April 5 post, second impression of First Quarter reports:

the price per square foot metric ... does not generally see the same volatility from unit mix swings as compared to the other price indicators.

In Miller World, the trends for Days on Market and Inventory are similar between the overall Manhattan market and the loft niche, but I believe that the surge being greater for lofts in both metrics is significant. Long-term and comparative data in The Miller's prose tells the story. About the huge increase in loft transaction volume year-over-year, he notes that the 20 year quarterly average loft sales volume number is 193, which highlights just how large this quarter's 262 loft transactions are in comparison, and how small last year's 72 sales were.

In other words, the loft market was essentially asleep a year ago and now has awakened. Looking at my quarterly review a year ago (July 10, 2009, comparing 2Q Manhattan loft data + overall market / the case of the missing lofts), I see that the overall market volume was down then YoY 'only' 50.3% while the cliff the loft fell off was 73.5%.

The Miller has another context nugget about the Days on Market numbers. While the loft niche again trends along with the overall market (down 42% vs. down 35.2%), the raw number for how long it took for lofts to sell in the second quarter is historically significant: 80 days on market is "the fastest result posted in at least a decade". Great stuff!

as usual, cross-firm comparisons risk incoherence
There are only two data points on which more than one of the three firms report loft numbers, median sales price and average price-per-foot. With three sets of average price-per-foot reports, this quarter the numbers from The Miller, Corcoran, and Terra are all tolerably within range. But the two median sales price numbers are again so different that grinding and gnashing of teeth is inevitable. While The Miller and Corcoran disagree only moderately on size ($1.57mm vs. $1.64mm), they again radically disagree on the year-over-year trend (down-15.9% vs. up-21%). As I said last quarter,

the only explanation is both familiar and dis-satisfying: their data sets are different.

In such a world, it is a fool's errand to draw any conclusions from inter-firm data differences. Sigh.

© Sandy Mattingly 2010

 

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Jul. 5, 2010 - about those street pianos that are closing up today...


60 pianos = joy, for sure ... how much hope?
I was between appointments in Tribeca last Thursday when I stopped to catch up on email and phone calls in the triangle park at Beach Street, West Broadway and Church Street, across from both the American Thread Building and the old AT&T building.  Over the course of half an hour, 5 or 6 people sat down at one of the two Street Pianos fastened (somehow) into the park. Have any Manhattan Loft Guy readers availed themselves of the opportunity to play one of these 60 pianos around the city, or spent any time watching and listening?

Play Me, I’m Yours: New York City 2010
installed the 60 upright pianos in public spaces around the city for public consumption from June 21 through today (sorry!), with volunteers who unlock the pianos at 9AM and lock them again at 10PM; the volunteers also cover the pianos in the event of rain. Pianos will be given to schools and social service centers some time after they close up today. Read the website for the artistic intention, for the times this has been done in other cities, and for the (many, many) media references.

The site also has pictures (some videos) from each of the locations, with comment about people who have played there, or listened there. The Tribeca Park page is here.

I was pleasantly surprised at how enjoyable it was to watch and listen to random people interacting with the two Tribeca pianos. Cool. Totally cool. It makes the city a happier place, no doubt. I wonder hwy it was only two weeks....

© Sandy Mattingly 2010

 

 

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Jul. 4, 2010 - see an original fair copy of The Declaration of Independence


In Thomas Jefferson's hand, written in early July 1776. At the main branch of the NY Public Library, until July 31 (today and tomorrow 1 - 5 PM).

h/t Huffington Post

Happy Fourth! Read your declaration today:  my post July 4, 2007, July 4 - 'nuff said  with the text.

For a nice read on the Declaration and the quality of Jefferson's pen (not his penmanship), read Megan Meis of The Smart Set.
h/t Andrew Sullivan
 

© 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.

Recent Posts

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79 Laight Street loft also being auctioned today (UPDATED)
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1200 Broadway loft closes near 2009 ask


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