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April 2012

Apr. 30, 2012 - Flower District loft at 133 West 28 Street sells at small discount after 11 months, 2 firms, only a $5,000 drop


why did that first contract fail?
It is impossible to know this kind of thing from the outside, but there is a reason that the “1,300 sq ft” Manhattan loft #6C at 133 West 28 Street took nearly a year to sell without any meaningful change in asking price. I wish I knew the story behind this listing history:

April 5, 2011 new to market $1.2mm
July 12 contract  
Aug 1 back on market  
Aug 31 hiatus  
Sept 22 change firms $1.195mm
Jan 12, 2012 contract  
Mar 15 sold $1.105mm

I don’t believe the price change had anything to do with the deal. The loft was as well described by Halstead in the first go-round as by Core in the second. The sellers thought they had a deal last July, but something happened to that contract within 3 weeks (possibly a board turndown, but that is pretty quick work for a coop board). Rather than stick with the first agent, the sellers decided to change firms, though not (meaningfully) change price.

Sometime in between the Halstead listing photos and the Core photos the loft was redecorated, and possibly staged. The living room furniture is very different in the April 2011 pix than in the September 2011 pix. I can’t be sure if the palette in one bathroom changed, or if the photographer’s filter was set differently in each photo, but the later photo (with the dramatic shower curtain) has the bathroom countertop much darker than in the first set of photos.

Maybe the new look in the living room (more crisp, lighter, more neutral) attracted more qualified buyers in the Fall. Or maybe the sellers were more flexible in the second tour then in the first. You’d think that sellers who were asking $1.2mm but who had paid $880,000 in 2004 would be negotiable down to 8% if that was what it would take from the beginning, but perhaps they only learned that lesson after losing a deal.

Fact is, both agents found contracts within about 15 weeks of beginning marketing; only the second one held together.

do you see anything wrong with this loft?
I ask because (as you will see below) the other recent building sales imply a higher value event han asked for #6C, though the comp analysis in each case with those sales is complicated. I see a basic loft, with nice finishes, challenging light, a second “bedroom” that does not qualify as a legal bedroom (because it is too narrow), and a chef's kitchen “in the truest sense” (to give the babble some credit). Yet the sellers started out asking only $923/ft and The Market gave them only $850/ft.

There are 100 downtown lofts on the Master List of Manhattan Lofts Sold Since November 2008 that sold between $500,000 and $5,000,000 since February 1, nearly all of which have sq ft data. Loft #6C (with its nice finishes, challenging light, small second “bedroom”, but true chef’s kitchen) closed at a lower price per foot than all but 9.

recent & nearby sales = not very helpful
The loft upstairs was in contract when this one came to market last April, but was hardly an easy comp. I hit the “1,300 sq ft” #7C in my May 7, 2011, stubborn flower district loft seller holds for sale at 133 West 28 Street with rooftop garden, but it’s that rooftop garden (“800 sq ft”) that makes it difficult to project the fair value of #6C from that #7C sale at $1.58mm. The #6C sellers took a healthy discount from the #7C sale, so they did not seem to be too distracted. I will come back to that one below, as the new math is noteworthy.

Two lofts on the same floor sold more recently than #7C. They were also presented some comping issues for #6C, though the #6C sellers appear to have used them, or came to an asking price at their closing prices by some other method. I hit loft #6B in my August 8, 2011, despite failed contract, 133 West 28 Street small loft sells above ask in a refreshingly efficient market, when it sold the same day (as noted in the post) as loft #6A (in the attached building next door, part of the same coop). They are both “900 sq ft” mini-lofts (so, had very different utilities than #6C, at “400 sq ft” larger) and that post title says “refreshingly efficient market” because they sold on the same day at essentially the same price, by two different sellers selling to two different buyers. (Well, for you anal types: at $922/ft and $929/ft.)

Those two went into contract the month after #6C came to market, and -- coincidence or not -- the #6C sellers came out right in the small range of those $92x/ft sales. The market efficiency broker there, as #6C got bargained down to $850/ft.

Let’s go back to that garden....

comping backwards, from outside space, in, and beyond!
With the benefit of hindsight and the #6C sale, it is now easier to look at #7C. With #6C having discovered the interior value for the “C” line of $850/ft (obviously, $1.105mm), we look back at the #7C sale as including 1,300 sq ft of interior space worth roughly the same $1.105mm, leaving it to the 800 sq ft rooftop garden to account for the $475,000 difference. On a per-foot basis, the exterior space at $594/ft turns out to have been worth 70% of the value of the interior space in that sale last April.

The math works, but the result is an outlier for Miller values, as you already know if you have been aware of my frequent use of this May 6, 2010 post, riffing with The Miller on the value of Manhattan terraces, decks + balconies, for the basic guideline that outdoor space is generally worth between 25% and 50% of the value of interior space. See that post for a discussion of The Miller’s original source post and a discussion of what kind of variables may make a given array of balcony, terrace or deck more or less valuable.

Looking back at #7C now from the perspective of the #6C closed sale, the 70% valuation of this rooftop garden is an outlier because it is disproportionately large (well more than half of the interior) and lacks direct access from the living space. Indeed, it is possible that this value is actually more of an outlier, as there was very little bragging about the #7C interior space, so #6C may actually have a more highly finished interior. (Plus, as I went on, and on, about in that May 7, 2011 post, the #7C floorplan has some real ‘issues’.)

But I will stop here, before running further afield.

© Sandy Mattingly 2012

 

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Apr. 29, 2012 - Sunday diversion / there are "rules" about foul balls, don'cha ya know


viral is as viral does, though starting in NY helps
Maybe it is the power of Yankee media, or maybe it is just that any trivial thing that happens involving the Yankees can’t be too trivial, but if you watched the Yankees against the Rangers last week you probably saw The Tossed Ball Play in real time, and then again immediately a few times in succession. If you watched, and don’t know what I am talking about, you probably know it as The Hysterical Toddler Play, after the little kid who wanted the tossed ball lost out to the couple sitting right next to his family.

The Extra Mustard guy on Sports Illustrated on-line has backed off from his calling that other couple (the people with the ball) “Awful Human Beings”, thank the lord, and he gets the h/t for linking to The Rules For Foul Balls, as presented as a flow chart by Dead Spin. Nice work, that.

In turn, Dead Spin gets the tip of the hat for showing how Silly Yankee Game Moments are fodder for national (New York based, but national) media, like The Today Show. The kids parents were on, here.

I will say one thing: that kid has got powerful lungs, and remarkable staying power, in a hysterically sobbing sort of way. A future on talk radio?? (Who was it who said "there's no crying in baseball?")

© Sandy Mattingly 2012

 

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Apr. 28, 2012 - what has changed at Cobblestone Lofts, 28 Laight Street, since 2005?


warning: no rational market ahead
To answer the headline question quickly (as if there were any mystery to it): nothing significant has changed  since 2005 about the new-in-2001 multi-building residential loft conversion known as 28 Laight Street, the Cobblestone Lofts. It still sits in the crook of the Holland Tunnel spillway; it still sports fairly high-end finishes in spaces with many classic loft elements; it still has some inflexible layouts due to those thick walls between the original buildings. But the reason to ask the somewhat rhetorical question is that the “3,578 sq ft” Manhattan loft #2E at 28 Laight Street just sold for $4.175mm, or $1,167/ft, after selling on November 8, 2005 at $3,575,000, or $999/ft, while the “2,687 sq ft” Manhattan loft #2B sold on December 22, 2010 at $2.75mm, or $1,023/ft, after selling on June 23, 2005 at $2.7mm, or $1,005/ft.

Remember: these lofts were brand new in 2001, so operated in the mature resale market in Tribeca in 2005. They were judged equivalent in value in 2005, yet #2E commanded a 14% premium when one sold on March 30 and the other sold 15 months earlier (in substantially the same market conditions, right?).

is it a new preference for larger spaces?
I suspect that The Miller would say that The Market has had a preference for larger spaces since at least 2000. (See my September 10, 2011, deconstructing NY Times article about combining apartments to increase value, for a riff on [the lack of] data supporting that bit of Conventional Wisdom.) Both #2E and #2B are huge for what they are: #2E is a 3-bedroom with “3,578 sq ft” while #2B has 2-bedrooms in “2,687 sq ft”. The #2E floor plan has simply grand proportions: the smallest bedroom is 12 x 15 feet (the size of some masters in some cookie cutter new condos); the master is 18 x 25 feet (the size of a West Village studio); there is a “gallery”  (funny usage, that) outside the two extra bedrooms that is a nearly square 350 sq ft; and the living room clocks in over 1,000 sq ft. Huge.

If we had not just walked around #2E, the #2B floor plan would seem very large, as well. That living room is nearly 900 sq ft, the smaller bedroom is 230 sq ft, and the separate kitchen is 275 sq ft. The problem is that it is what it is. Maybe you could squeeze a third bedroom into the lower right corner of the living room, but that’s it. (Just as with #2E, you could split the master bedroom into two bedroom if you need a fourth, but that’s it.)

blame the thick black lines
In both floor plans, those thick black horizontal lines across the middle are the walls between the original buildings that have since been combined. Obviously, the developer broke through those walls to integrate the separate buildings, so not all of it is needed for support. It should theoretically be possible to do that again to create different proportions, but the problem is that these layouts were created as though those were fixed points, so there would have to be a radical (i.e., expensive) renovation to re-think how to make a 2,700 sq ft loft handle more than 2 bedrooms, or a 3,600 sq ft loft handle more than 3.

They are what they are. And they are what they were. So why is there a 14% spread between #2E and #2B when they were at par in 2005?

north west Tribeca is an enclave of several micro-nabes
The map places 28 Laight Street just to the western half of Tribeca, clearly in the north (with Canal so close), so perhaps this condo gets the halo effect of new-ish developments nearby, such as were featured in the Wall Street Journal ‘bit of hackery’ I skewered in my December 3, 2011, Wall Street Journal flogs north Tribeca for no apparent reason. The premise of that article was that north Tribeca was becoming more of a premium neighborhood than south Tribeca, largely due to new (newer) developments in the north, with the other buildings in the area getting a spillover premium. I don’t think that the premise is wrong; just that the article was a sad collection of poorly selected data points exacerbated by an ignorance of the local geography.

Relevant to Cobblestone Lofts, it sits in a micro-nabe that is very small, bounded by the Holland Tunnel exits and by the daunting north-south traffic on wide and busy Varick Street and wide and busy Hudson Street. There is little ‘connection’ on this block to prime Tribeca a few blocks due south on N. Moore and environs, or to the newly prime northwest Tribeca toward the river, the new parkland, and the new uber lofts on and around Greenwich Street.

And, more relevant to Cobblestone Lofts and the 2005-to-now issue, both #2E and #2B should benefit from an Improving Micro-Neighborhood Effect, if there is such a thing.

So why is there a 14% spread between #2E and #2B when they were at par in 2005? Theories are most welcome....

last sale did not comp well to #2B, but smashed 2004
I hit the last sale in the building in my range in my August 6, 2011, 28 Laight Street loft sale under-performs neighbor's sale. (My Master List of Manhattan Lofts Sold Since November 2008 is limited to downtown Manhattan loft sales between $500,000 and $5,000,000 so I ignored the #6AB combo sale for $6.9mm, $1,263/ft, 9 months ago.) The neighbor that #5C under-performed against (at $957/ft) was loft #2B.

Loft #5C had been last sold in late 2004. I won’t spin further afield by worrying about that ancient market, but I will note that #5C on October 19, 2004 at $1.85mm, only $689/ft, so the (otherwise) disappointing $957/ft in August 2010 looks much better in that context. Of course, that 2004 $689/ft is hard (impossible!) to reconcile with the #2E and #2B values one year and +45% later, but all posts must end, sooner or later. Even on Manhattan Loft Guy....

© Sandy Mattingly 2012

 

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Apr. 27, 2012 - truly "one of a kind" bathroom sells for $2.35mm, loft at 56 Warren Street comes with it


what’s the magic trick?
Forgive me, but the question that lingers longest in my mind after seeing that the “2,200 sq ft” Manhattan loft #5E at 56 Warren Street just sold for $2.35mm, is how did they take that bathroom picture without the photographer being reflected in the mirrors? Yes, there are interesting questions about a layout this big that features one bedroom and one bathroom, and about how this loft compares to others in the building that have not (yet) sold at much higher prices, but that bathroom keeps nagging at me.

First thing you should do is study pic #4, in Click for large photos mode, of course. (I will wait.)

You are in the “one-of-a-kind bathroom” (this babble does not lie), facing a mirrored wall above the mirrored bathtub with the long back wall of the bathroom (also mirrored) to your right and the wood-panelled wall of closet behind you (of course, that wall has a small mirror). The red thing suspended from the ceiling? An artfully tied shower curtain, of course. I don’t know what to say about the flooring, so I won’t. I can’t certain, but I think the ropes that subtly hang down the middle of the floor-to-ceiling glass walls are pulls for blinds or shades. (I really hope so.)

Can we agree that this is one of the most idiosyncratic Manhattan loft bathrooms? And that it violates that Conventional Wisdom about neutral design choices? Holy Mother of Dornbracht!

(I gather that the camera was on a tripod and got photo-shopped out, but I wonder if they could they also take out the photographer or whether it was on a remote shutter.)

how is this “One of the few remaining original Tribeca loft spaces”?
It is hard to get a sense of the finishes in the space from the broker babble and photos. On the one hand, “[o]ne of the few remaining original Tribeca loft spaces”; on the other, that so-beyond-merely-modern bathroom. And the new kitchen. The loft retains the exposed piping across the ceiling and an (intentionally) rough-ish floor. There is no “bedroom” or dining area photo, but I cannot believe that the owner responsible for that bathroom has not finished everything (except the floor) with high quality, and I am sure that floor is done very well to evoke or retain a vintage feel.

Flooring aside, the only thing that might makes this anything like “an original Tribeca loft space” is the open floor plan. The “bedroom” at the rear of the loft has no front wall; aside from the exterior walls of this very Long-and-Narrow loft, the only built wall in the “2,200 sq ft” space is that glass wall in the bathroom. OK … that, and the short wall built out to hide the refrigerator. In fact, considering that the bathroom wall is mostly glass, this is as open an open loft as open could be.

Whether because of or in spite of the idiosyncrasy, the loft was not a hard sell. It was brought to market at $2.495mm on October 17, dropped to $2.395mm five weeks later, was in contract by January 29 (per the inter-firm data-base), and closed at $2.35mm on March 29, or $1,068/ft.

comps and more, and less
In terms of utility and price-per-foot, loft #5E down in South Tribeca is something like the Noho loft I hit in my April 13, why did 48 Great Jones Street 1-bedroom loft sell 18% above Peak value?, the Chelsea loft I hit in my March 28, One Bed Wonder loft at 129 West 20 Street sells modestly over $1,000/ft, despite custom finishes.

The Chelsea loft was not as big (at “1,626 sq ft”), probably better renovated (“beautiful features and lux finishes, handsome in every respect with no detail overlooked”), a condo, and a true One Bed Wonder. Yet it cleared at only $1,024/ft.

That Noho one had a conventional bedroom and a second (interior) bedroom, and was marketed as a “masterful renovation” throughout, so I am giving extra credit to that Noho loft’s price ($1,365/ft) for the renovation. (Of course, the point of that April 13 post was to wonder how a loft that sold in the same condition at the peak at $1,154/ft gained so much on the recent resale, but it is interesting as a one-bedroom loft, like #5E at 56 Warren Street.)

The best comps are in the same building, of course, though here we have only some ceilings. Loft #3E did not sell at $2.695mm or $2.895mm when offered over about 12 weeks last Summer, despite being “[n]ewly renovated ... with an eye to every detail” and having custom this and custom that. That loft also had a lot of rooms (that floor plan is an interesting change from #5E in the same footprint), fitting 3 bedrooms, 2 baths,  and a media room. It appears as though loft #2E is about to sell (it just went into contract) off an asking price of $2.85mm, also with a 3BR+ floor plan much more similar to #3E than to #5E. That closing price will tell us how The Market values a built-out 3BR+ floor plan over the open-as-open-can-be #5E. (Note to Self …) It looks like a premium in the range of 15%.

time for another bath
The most interesting comp for loft #5E is not one that is similar in utility, as the north Tribeca loft I hit in my March 22, love it or hate it? glass master bath sells at 181 Hudson Street loft, is fully built out (2 bedrooms plus office / media) as well as being “in triple mint condition … [with] feature ... overlooked”. Here’s what that loft does have:

a very unusual design choice in the master suite: the headboard sits against a clear glass wall, directly behind which is a long walk-in shower, then sinks and a  deep soaking bathtub (the toilet, thankfully, is located behind a side door; with a bidet??).


I further described that bathroom “either as head-scratcher or a jaw-dropper”. And I made the case in that post that there might have been a market hit taken for such an unconventional design choice. The #5E bathroom is more conventional in layout (a low bar, but still: it does not sit behind the bed!) but not in design.

Not sure if the right place to park such lofts is a Loft Bathroom Hall of Fame, but if that is the right name for the right thing, the glass wall and mirrors and general flash of loft #5E at 56 Warren Street will join the glass wall #3F at 181 Hudson Street, and the bath tub in the bedroom that i hit in my November 11, 2010, nice flipping loft at 49 Howard Street.

Please send me other nominations for this hall of fame!

© Sandy Mattingly 2012
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Apr. 26, 2012 - Los Angeles loft lover buys mini-loft at 720 Greenwich Street


lack of east coast windows is no biggie
Would you trade a “1,486 sq ft” downtown loft in a former toy factory with great open city views for a “700 sq ft” West Village loft in a former printing factory with but one window and no view worth discussing? How about if you would probably lose $135,000 on the trade?

Sometimes, you don’t have to choose. Based on the notice address on the deed record, the buyer of the “700 sq ft” Manhattan loft #4E at 720 Greenwich Street at $630,000 is apparently still the current owner of this “1,486 sq ft” loft in a former toy factory in downtown Los Angeles, which was purchased in July 2010 at $495,000. For those scoring at home, that is $900/ft for the gut renovated "clean and modern" loft with one window, no view, and an I-beam in the charming West Village compared to $333/ft for a “pristine” loft with 12 ft ceilings and open south views in downtown LA. Cue the bromide: location, location, location.

There is no floor plan on the LA Toy Factory Lofts loft (what’s up with that, California Realtors?), but it looks like a simple Long-and-Narrow (maybe 20 x 70 ft, approx) with maybe 12 feet of nearly-floor to nearly-ceiling windows at one end. Floors are polished concrete and the a/c and plumbing pipes are exposed (a/c ducts are very shiny), with two visible columns. (And it sold with a parking space.) All in all, there is a very spiffed-up industrial vibe, befitting a 2006 residential condo conversion on (wait for it) … Industrial Drive. Off hand, I can’t think of a Manhattan loft residential conversion with quite this feel (did I mention that the a/c ducts are very shiny?), though I have seen photos of similar lofts in places like downtown Denver.  

meanwhile, back in Greenwich Village
The one thing similar about the two lofts is the absence of walls. For loft #4E in the West Village, that is to be expected, as it is only “700 sq ft” and, as noted, is very window-challenged. There’s a stainless steel kitchen like in LA, but also like hundreds of other downtown Manhattan loft (and thousands of apartments). In this case, "clean and modern" means a dropped ceiling obscuring any sprinkler or other piping, though the window air conditioner detracts a bit from "clean".

The Market thinks this "clean and modern" renovation is not in the same class as other renovations in the building. The second-to-last “E” line mini-loft to sell at 720 Greenwich Street was #2E 8 months ago. That was (over-capitalized and) “Meticulously Renovated”, selling at $700,000 despite being on a lower floor. (The last “E” to sell was the not-quite irrelevant #3E, which sold 4 months ago in need of a total renovation at $499,500; suggesting that +$130,000 for #4E, while a "clean and modern" renovation, was little more than a ballpark decent renovation, under $200/ft.)

I have hit mini- and other lofts at 720 Greenwich Street before, often talking about the value of renovation. The line-up shows that my attention lands here very sporadically:

location x3; views x10
The New York windows are perhaps one-third the width of the LA windows. The NY ‘view’, if any, is certainly not highlighted in the marketing, with the edge of the same building all that is visible in the photos. LA, in contrast, seems to have one of those long view with dotted lights to the horizon that I associate with that town.

I don’t know LA in the same sense as I don’t know trigonometry: I am aware of its existence but not certain of its utility or geography. My California Realtor connection tells me that the Toy Factory is a very downtown loft, surrounded by three nearby interstates, and perhaps 800 yards from the Staples Center.
Obviously, I know nothing about the downtown LA loft market, but $333/ft seems absurdly low. (Yes, that is the market value as of July 2010; just sayin’.)

I would guess that these two lofts have a very different lived-in feel, with one being open (despite the single exposure) and the other being … not open. The experience of neighborhood (if you can use that term for downtown LA) must be even more dramatically different. Note the exterior Toy Factory photos, which suggest open spaces along Industrial Drive. (For more about the Toy Factory Lofts, see the development’s website.)

Bi-coastal living must have its attractions. The guy now has more space (and views!) in LA but is more (dollar) invested in Greenwich Village.

From one loft lover to another: I hope he enjoys the best of both worlds, no matter how cramped it may be on this coast.

© Sandy Mattingly 2012

 

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Apr. 25, 2012 - pushing slightly above the ask, as 140 Thompson Street loft sells on non-A.I.R. side of West Broadway Arches


well babbled: “this one is ready to go”
Do you notice those lingering listings that have broker babble that has never been edited, such as “priced to sell!!!” or “won’t last!!!”? (The extra exclamation points are for emphasis, I suppose.) After 6 months and a few price drops, agents really should change the text in those cases. The “1,571 sq ft” Manhattan loft #5D at 140 Thompson Street (the eastern part of West Broadway Arches) was not one of those: they said “this one is ready to go” and they were right. It came to market on November 8 at $1.695mm and found the contract by December 20* that closed at $1.7mm on April 10. Ready to go, indeed! (!!)

(*Contract date is per the inter-firm data-base; StreetEasy has it a few weeks later.)

The brief and successful marketing campaign emphasized “magical views and wonderful light” and being “[f]ully renovated to a high degree of understated elegance along with authentic details”.  Only the views and light are slightly distinguishing factors from the last sale in this line, as loft #2D sold on October 14, 2010 at (only) $1.585mm with a “masterful renovation  [that] is elegant, serene, and filled with character” including a top-of-the-line kitchen. There is a lot more light from the 5th floor, as is particularly evident comparing the main #5D listing photo in large format (angled, but 5-story buildings and sky) with the same window shot for the 2nd floor (best viewed on the Corcoran site, using the partially obscured Click Here To View button)

If anything, that floor plan on the same footprint on the 2nd floor has more utility than on the 5th floor, with a study / den that is an easy (interior) guest room, compared to the small (open) office space on the 5th floor as the only ‘extra’ space. (Note the different placements of bathrooms in the two lofts; something you often see in loft buildings but rarely in apartment buildings.)

Accounting 101
How to compare the two same-line loft sales in the same building? Loft #5D just sold for $115,000 more than #2D sold for in October 2010. Market conditions are broadly similar (that “flat” word) in the overall Manhattan residential real estate market. Condition seems roughly similar, based on the listing descriptions and pictures. Loft #2D gets a plus for being more flexible, with that closed second room being a potential bedroom. Loft #5D has a definite premium for being 3 floors higher in a mid-block setting looking at similar buildings, and getting considerably more sky.

The buyer markets for these two lofts do not completely overlap. People who have to have an extra sleeping  room would not consider #5D. For buyers who are indifferent to that #2D benefit, I suspect that the #5D floor plan is more appealing, as it has greater volume in the main room, and the bedroom doors, when opened, provide an even greater sense of space. While that is a subtle difference, the 5th floor sailed through the market, while the 2nd floor struggled to get that $1.585mm.

This may be one pair of sales in which the extra height from even a floor as low as the 5th makes all the difference in market value. In this instance, $38,000 per floor.

an A.I.R. oddity in Soho
West Broadway Arches is a single condominium composed of a building on West Broadway (#468) and this building on Thompson. [UPDATE May2: note the dialogue in the comments about the zoning for each "half" of the building, and whether there might be some truly non-A.I.R. units on the West Brodway side.] Many residential loft conversions aggregate more than one building into a single condo (like this, or like The Chelsea Mercantile) or into a single coop (like 80 Warren Street). However, West Broadway Arches is the only such residential aggregation that I am aware of that has materially different zoning for the original components. That distinction must provide fascinating management issues for the condo, as 468 West Broadway owners should all be certified artists; while 140 Thompson Street owers can include butchers and bakers, as well as (fine, artisanal) candlestick makers.

I mentioned this oddity in my post exploring why sales data are surprisingly unhelpful in looking for economic impacts of the Soho A.I.R. controversies (in my March 7, 2011, it is impossible to prove that the Soho artist in residence regulations are a resale problem unless 'victims' come forward), but I am surprised to find only one prior Manhattan Loft Guy post hitting a sale in this condo. That was way back in my  December 11, 2006, a year of pricing dangerously / 140 Thompson loft in contract, about a loft that lingered, and how that compared to other lofts in the building.

© Sandy Mattingly 2012

 

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Apr. 24, 2012 - offered with permission to dream, 5 East 16 Street photographer's loft sells at $862/ft, most likely


live-work, with very different living and working spaces
The large Manhattan loft on the 9th floor at 5 East 16 Street was marketed as a “photography studio plus 2 bedroom 2 bathroom home” in the marketing that lead up to its recent sale. One the one hand, it is “ready” for you to do with it anything that you like (“[f]eel free to dream ... a wide variety of floor plan possibilities”); on the other, the north quarter of the loft has been built out in what appears to be a thoroughly modern way. This loft is more of a hybrid than many artist lofts, as the private space has been relatively well finished and separated from the open, working space.

If your dream happens to match the sellers’ tastes in kitchen and bath materials, you may start out 25% of the way towards building your dream, with, perhaps, those south dining room and living room walls to come down, the vast middle open space to be refinished, and the “office” walls to come down in front. Or, you could send in a demo team to gut the whole space and start over. I wonder how many buyers would be tempted to at least try to make the present well-finished spaces work.

The purchase price for this set of possibilities was $3.45mm on April 2. Depending on how big it really is, the price-per-foot is either $958/ft (using the “3,600 sq ft” in the broker babble), $862/ft (using the “4,000 sq ft” associated with the deed on StreetEasy) or $814/ft (using the “4,100 sq ft” in the listing for the 7th floor when it sold in 2007). Since this building is a condominium (the Photo Arts Building Condominium, as it happens) I am going to go with the “4,000 sq ft” associated with the deed on StreetEasy and with this unit on The Shark.

It is hard to say how the condition of the 9th floor compares to that of the 7th floor, which was the last unit to sell in this 12-story building, on August 3, 2007 at $3.4mm. That was billed as both “a classic artists loft” and as “designed by a well known artist/ architect”, but had only 1 bedroom and 1.5 baths, and no bragging about any finishes. It is likely that the east views are much superior from the 9th floor, as the 7th floor windows appear in the building photo to just line up with the roof line of the building just to the east. These hints suggest that the 9th floor suffered a bit in the market-to-market comparison of same building sales, 2007 to 2012.

a narrow, if interesting, range of building values
Given these two sales, the September 2006 sale of the 5th floor is fascinating. First, it sold at $3.3mm, hardly commensurate with the velocity and trajectory of the overall Manhattan residential real estate market from September 2006 to August 2007. Second, it was in no better shape than the others, as it then “await[ed] you and your architect's individual design”. Third, at this height there are no eastern windows (compared to 4 on the higher floors; and the ast windows allow views of Union Square), so there is much more flexibility on the higher floors.

The spread of only 4.5% in the sequence from 2006 to 2012 is simply too small, especially considering windows, light and exposures, and the possibility of retaining some of the 9th floor kitchen and bath finishes after a build-out:

  • Sept 1, 2006 #5 $3.3mm
  • Aug 3, 2007 #7 $3.4mm
  • April 2, 2012 #9 $3.45mm

“Too small”, that is, for fans of the efficient market theory. That $100,000 gain from 2006 to 2007 is especially awkward, but there you have it. The fickle market does what the fickle market does.

I was hoping that there might be some photos of the working space, as it was being worked, on the (vacated) studio’s website, but all I see are thumbnails of jewelry, watches and still life. Darn.

The Photo Arts Building Condominium has lost one of its photo artists. That’s life in the big city.

© Sandy Mattingly 2012

 

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Apr. 23, 2012 - Chelsea Mercantile loft with few windows-per-foot sells without view at $1,040/ft (again!)


that courtyard is not a premium view
Long-time readers know how I feel about the Chelsea Mercantile building at 252 Seventh Avenue: the building that created the market for high-end residential lofts in this micro-nabe. (The 17 Manhattan Loft Guy posts tagged ‘Chelsea Mercantile’ are collected here, going back 5 years [!].) As a collection of 4 buildings over a very large footprint, one of the developer’s challenges in converting from Veteran’s Administration offices to residential units was getting light into the middle of the block. In this case, at least, the result is that some units have floor plans that are not very desirable. The “2,066 sq ft” Manhattan loft #7A at 252 Seventh Avenue is a case in point: though babbled as “[s]pacious and glamorous” with the “grandest of Living Rooms”, the floor plan has exactly 3 windows, with a “view” of the “water fountain with planted courtyard”.

windows with views = $$$
If you are a close reader of Manhattan Loft Guy you will know that I have hit the View Premium at The Merc before; if you are a really close reader you will remember that the last time was for a loft with (a) few windows and (b) courtyard “views” that sold at … (wait for it) … $1,040/ft. That was about the “2,269 sq ft” #10R in my February 3, water fountain view from Chelsea Mercantile loft worth only $1,040/ft. That floor plan featured one window in the master suite and a narrow wall of windows in the living room and is even more awkward than the #7R floor plan.

I was not shy about characterizing that floor plan in that post:

is this the worst floor plan in the building?

You will not see many lofts as big as “2,269 sq ft” with a floor plan that is as inefficient or has so little utility as loft #10R. Number of (real) bedrooms: one; size of (interior) office (aka “interior” bedroom): 20 x 18 ft with a closet and a walk-in closet, and with a direct entrance to the “master” bath. Obviously, many people are going to put someone to sleep in that “office”, but still ….


Given the scale of #10R’s layout weirdness, I still think it is worse than that of #7A. I did recognize the reason for some weird layouts in a building with as large a footprint as The Merc, and even recognized that there might be others here:

In the puzzle that is any building footprint with lots of units per floor, the “R” line got squeezed and pulled and jabbed. Short on windows, long on space and angles, with more nooks and crannies than most loft layouts (from the foyer, to the 2 walk-ins, to the large bathroom). I assume the layouts of other adjoining lofts make a lot more sense, but perhaps there are others that suffer in this very large loft building.


The “A” line is one such line.

The other side of the view coin at The Merc as the lofts with spectacular views, as I noted in that February 3 post about a Chelsea Mercantile sale I had just hit recently. The two sides of the view coin are $1,040/ft (for courtyard “views”) and nearly $1,700/ft for long and open views:

my January 20, privileged Chelsea Mercantile loft clears near $1,700/ft at 252 Seventh Avenue, talking about what spectacular views are worth at the Chelsea Mercantile (in two cases from the 17th floor, one north, one south: around $1,700/ft)

Not all of the difference in value on the two sides of this coin is due to views, as there are significant layout deficits for #10R and #7A, as noted. Maybe $200/ft in layout deficits, in fact, as explained in that February 3 post. But even with that, the isolated premium for views in this iconic building could be more than $300/ft, more than 25% on a $/ft basis. That is a dramatic premium.

(Forgive me, but I can’t resist this aside. There may be a broker babble handook for dealing with challenging layouts at The Merc. Loft #7A was just babbled as “[s]pacious and glamorous“; loft #10R was babbled last year as “[d]ramatic and spacious”.)

expectations made to be dashed
The seller thought that #7A was worth more than The Market thought:

June 22, 2011 new to market $2.595mm
July 29   $2.45mm
Sept 23   $2.375mm
Oct 27   $2.295mm
Nov 19   $2.25mm
Feb 1, 2012 contract  
April 4 sold $2.15mm

Note that the seller was motivated enough to drop the price 4 times (except for the Summer, within 5 weeks each time), but seems to have encountered an emotional floor, with that last ask lasting 10 weeks. From start to contract was 7+ months, with a discount from original ask of %. The seller got the result she wanted (a sale) but not all the dollars she wanted. Not that anyone should feel sorry for any individual loft seller, but in this case no one will feel sorry for a seller with an $800,000 gain. (That gain, 74%, is from her purchase in 2001, but is too many dollars to sneeze at even over 11 years.)

The full price history of loft #7A shows the immediate impact of the Chelsea Mercantile as a game-changer for high-end lofts in this area. This recent seller was not the original owner, though she bought in 2001. She paid $1.35mm in August 2001 to someone who had paid only $845,500 12 months earlier. That was one successful flip!

buyers knew there were better views in the building
The folks who just bought the no-view-few-windows #7A knew that they were getting into, besides a courtyard. The deed record notice address shows that at least one of them was coming to #7A from this 11th floor “1,934 sq ft” rental that boasts “filled with sun light, ... living room with North and West city views, a beautiful South/West view from the master suite”. Apparently they were more drawn to the space than the views or light, or the relative value for buying a large loft here with few windows and no view.

The loft above that rental is in contract off a discounted asking price of $3.25mm, suggesting that the market value for what the “1,934 sq ft” they had (but did not own) is something less than $1,680/ft, compared to the market value they established by buying the “2,066 sq ft” loft #7A at $1,040/ft. You want a view, you pay for it (perhaps a million bucks at this scale); if you don’t need a view, you can afford much more space at The Merc.

Sometimes the trade-offs are both obvious and (relatively) easily quantified.

© Sandy Mattingly 2012

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Apr. 22, 2012 - Sunday diversion / back to baseball


but nothing perfect
And not about the very imperfect game thrown yesterday by Freddy Garcia. (You’re welcome, RS Nation.)

This is one of the well-done uses of baseball stats, with an obvious headline but interesting supporting data: Quit throwing strikes to Josh Hamilton.

And this is a collection of weird little notes from one of the great pitching games (both sides) we are likely to see in a long time (other league, but still compelling stuff): Seven Facts and Takeaways From Cain vs. Lee.

Finally, an oddity (a very odd oddity, as it turns out); one that is almost inconceivable.

Hoping for no rain in Boston tonight (sorry, RS Nation).

© Sandy Mattingly 2012

 

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Apr. 21, 2012 - interesting pricing gambit does not work as 214 West 17 Street loft sells at 14% discount, 22% from first ask


how does that “if at first you don’t succeed …” thing work?
No diversion today, as I missed a weekday of substantive Manhattan loft blogging. (if you are disappointed, call 3-1-1.) One way to look at the recent sale of the “4,040 sq ft” Manhattan loft combination #5AB at 214 West 17 Street in prime Chelsea is that The Market responded rationally, as the same loft that did not sell post-Peak at $4.995mm did not sell close to $4.95mm in late 2011. From a dispassionate clinical perspective, however, I find the seller behavior fascinating: after that post-Peak experience of not selling at $4.995mm, the new price in April 2011 was … (wait for it) …  $5.495mm. Same loft, same condition, different market (just not a dramatically better market in 2011 than in late 2008). Looks like they were just taking a shot ….

May 9, 2008 new to market $4.995mm
Jan 13, 2009 off the market  
     
April 4, 2011 new to market $5.45mm
Oct 21   $4.95mm
Feb 6, 2012 contract  
Mar 29 sold $4.275mm

Note the unfortunate first timing. Loft #5AB came to market just weeks after The Peak (no one could know precisely that at the time, of course); a few months earlier and this loft may well have sold before Lehman flushed the market. Sometimes luck is a 4-letter word.

Again speaking from a dispassionate clinical perspective, notice the last spread: seller was secretly negotiable to the tune of 14%. Sometimes sellers that drop by a half million bucks are reluctant to drop (much) again. Of course I wonder if an intermediate drop from near $5mm after October might have provoked more interest, and gotten something higher in the mid $4s. But it was not my loft, and not my seller, and the team made the choices they made.

a simple combo, nicely done
It appears as though these two lofts were put together in 2004, after the then-#5B owner (shown by The Shark as having a phone number at this address since 1992) bought the loft next door. They are about as natural a combination as you can imagine, being side-by-side floor-through lofts with plumbing in the middle of the building.

The resulting floor plan yields 3 ample bedrooms across the back (a masterful master at 22’6” x 18’6”); a front living area that is nearly 50 feet across, with fireplaces on the opposite side walls; and the middle of the loft containing the 3* bathrooms, the kitchen and (in one former kitchen) a den / library, all arranged around the elevator shafts and public stairwell. (There is a disconnect in the floor plan and the babble, as the floor plan clearly has 4 bathrooms; I suspect that the 2 bathrooms on the left side were combined into that master, in which “[n]o expense was spared”. Look at the 5th photo and see if you agree that it appears to show one very long master made out of two ‘conventional’ baths; note the shower head between the tub and the sink, and the black bands on the floor that are probably drains, not mere decoration.)

In fact, this is one of the great loft floor plans, in my opinion. Some people complain about the open kitchen style in lofts; this kitchen is angled away and separated from half the living room. Of course, that front room at nearly 1,100 sq ft helps put the mass in massive. There are long visual ranges not only across the front room, but from the master suite door and along the opposite long wall. yet the only completely enclosed spaces (bathrooms aside) are the 3 bedrooms.

The master bedroom is not only separated from the other bedrooms, on a walking basis, by about a hundred feet, but the wall between the bedroom wings is the original wall that separated the “A” loft from the “B” loft. It even seems as though the secondary bedroom dwellers could use the separate (old “B”) entrance if they did not want milk and cookies before going to bed.

Put it another way: not counting the entries, bathrooms and closets, there are only 3 doors in the “4,040 sq ft” loft. Take a footprint like this in a grand prewar apartment uptown and you are likely to have separate rooms for kitchen, dining, gallery, library, and a few other “rooms”. Of course, that will be wonderful for what it is; but it ain’t loft living.

One more odd thing about size, scale and perspective in this huge loft. you would not know from a quick look at the kitchen photo (pic #3; view it with Click For Large Photos, of course) just how big that kitchen is. The angled photo seems to squeeze the space, which takes up more than half of the 23’8” x 20’ kitchen / dining space on the floor plan. (Stop and count the number of gas dials on the cooktop and oven; that is one massive appliance, that looks to be shortened as it gets farther from the camera’s viewpoint.)

speaking of a rational market reaction...
No doubt that the seller was disappointed not to have sold higher, either in the 2008-09 marketing period or in the successful 2011-12 effort. Negotiating to a $675,000 discount from last ask could not have been easy. But there is reason to believe that this sale was a strong one; that the selling team simply over-reached in both marketing efforts.

Half the same loft downstairs (the “1,850 sq ft” #4B) sold in fully renovated, fully loaded condition in a near-Peak sale at $1,038/ft ($1.92mm on June 30, 2008). Unless you are of the view that the current market conditions are similar to early 2008 conditions, that sale implies that the recent #5AB sale at $1,058/ft, discounted though it was, was a rather strong price.

In fact, you could look at the near-Peak #4B comp for the recent #5AB sale as a data point in support of the elusive 1+1=2.5 Conventional Wisdom about which I riffed with VToy and The Miller back in my September 10, 2011, deconstructing NY Times article about combining apartments to increase value. My point in that post was not that the 1+1=2.5 Conventional Wisdom about combo premium does not exist, although that got lost enough that even The Miller took me to task on that. (As well, for lumping him into the Real Estate Industrial Complex, a phrase that he finds derogatory.)

Perhaps that post was a little too much inside baseball. I offered:

I don’t doubt that there is such a premium in the right circumstances, as I will explain in a minute. But my basic response to the article started with “sheesh … that’s not very helpful without real past examples”, which led to “why aren’t there real past examples”, which morphed into “no one with the data is motivated to find real past examples”, as the role of the New York Times in the Real Estate Industrial Complex came into focus for me.


I was frustrated then that we get articles in The Paper Of Record that offer no actual sales data for a sensible proposition. (Still am.) Reporters like VToy are at the mercy of the people with actual sales data who really want to sell their potential combos that have not yet sold, rather than talk about past examples that prove VToy’s thesis:

The developers and sales agents for new developments know [where the real life examples are], but that is not what they really want to talk about. The sales agents with one-off combo listings might or might not know, but that is not what they really want to talk about.


The #5AB sale is a win for fans of the 1+1=2.5 Conventional Wisdom. Unless you believe that the 2012 market is as strong as the immediate post-Peak market, the fact that #5AB just sold at even a tiny premium ($20/ft = 1.8%) over #4B in June 2008 is evidence of a premium for larger lofts over smaller lofts. Especially considering that #4B was a hardly cramped 2-bedroom at “1,850 sq ft”, while #5AB has ‘only’ the one additional bedroom.

© Sandy Mattingly 2012
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Apr. 20, 2012 - "great bones" 100 Hudson Street loft sells above where it "should" have


the best comps are close in time, size and location, with few adjustments
Apparently The Market thinks that the difference between “1,100 sq ft” of “great bones” and “1,100 sq ft” of “meticulous renovation” and “superb craftsmanship” is $92,500 in Tribeca. I’d have thought it would be more, as you’d pay more than $92,500 to upgrade from great bones to a “head to toe [renovation] using the finest of finishes” with (a partial list) Brazilian walnut floors, Viking and Miele Appliances, stainless steel countertops, Chilewich backsplash, bamboo cabinetry, limestone bathroom with granite flooring, Duravit fixtures, deep spa tub, separate stall shower, Bosch WD, Bose surround sound, Fujitso plasma TV, custom closets, and sophisticated lighting. But that is not what happened, as the (yes) “1,100 sq ft” Manhattan loft #4B at 100 Hudson Street sold on April 4 at $1.17mm just 4 months after #3B sold for $1,262,500.

My view was more than academic, as the buyer with whom I saw #4B was persuaded that it needed a bigger haircut from the $1.25mm ask to reflect the significantly different condition of #4B so soon after #3B had tested the market at $1.325mm and discovered that $1,262,500 was its value.

The #3B photos are much better on the Corcoran site, and I encourage you to spend some time with them, and with the listing description on StreetEasy, before looking at #4B and its bones.

Yes, #4B offered the choice presented in the broker-babble: “move right in or ... show your creative side”. If you moved right in, you’d be in an environment that is rather (what’s the polite real estate term?) tired. Nothing has been touched in this loft in (guessing) 20 years, as implied by the absence of pictures or prose about the kitchen or the bathroom. I don’t see many people making that choice in this market, but maybe there is a class of starter loft buyer just happy to be able to live the Tribeca loft dream under $1.2mm.

fill in the blank: Comping is ______
Any buyer with a calculator, however, is comparing the tired #4B to the head-to-toe #3B, and coming up with a spread greater than $92,500, as no one would (should) think that you can turn #4B into #3B for that amount.

Of course, at the end of the day the individuals who bought and sold #3B are different from the individuals who bought and sold #4B four months later. If the #3B seller had been more firm, and had been able to hold out for $25,000 more than that deal took, and if the #4B buyer had been more firm, and held out for $25,000 less than that deal took, I probably wouldn’t be writing this post this way. I would say that you still could not turn the toad of #4B into the prince of #3B for $150,000, but the math would be closer, and probably within spitting distance on both sides of this same-line-in-same-building-in-same-market pair.

Without doing a broader comp analysis, I can’t tell which of these two sales is more out of line with the general Tribeca loft market (not that there are enough sales of small lofts to make that easy). But I can tell that they don’t fit together within an efficient market analysis.

And I can tell you that individual needs, resources and circumstances of individual buyers and individual sellers often make a mockery of efficient market analysis, especially with non-commodity properties like lofts. Mock away!

© Sandy Mattingly 2012

 

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Apr. 19, 2012 - Soho and Artist-In-Residence are back in the news, oddly


“hunting”? “harassing” really??
I found this headline from DNAInfo Tuesday rather bizarre, Group Hunts Non-Artists Wrongly Living in SoHo and NoHo Lofts, and the article only slightly less so. It sounds as though some folks are targeting undocumented immigrants residents; in fact, some folks are trying to count “artists”. This piece from the same source yesterday, SoHo Residents Decry Artist Survey as 'Harassment', continues the targeting theme, but is at least a useful counter to the first one in providing another side of the coin. Why all this reporting wasn’t included in the first piece is beyond me, assuming that DNAInfo considers itself journalism; but if DNAInfo considers itself a blogging platform, then I get it completely. Happens to me all the time....

The hunting group in Tuesday’s article (The SoHo/NoHo Action Committee) that wants to count believes that there are not many "artists" in Soho (the punctuation is because they want to count people with certification from the New York City Department of Consumer Affairs, a certification that is a formal prerequisite to living in buildings zoned for manufacturing). SNAC appears to believe that it will help them to mobilize to change the rules if they can show how relatively few “artists” there are under current rules. The “hunting” imagery of that article aside, Tuesday’s piece was entirely from the perspective of SNAC, with some “balance” from representatives of the city (DCA and the Department of City Planning); these bureaucrats aside, all the people quoted on Tuesday are in favor of changing the rules.

The decrying “residents” in yesterday’s article are two members of the local community board (CB2; one of whom is a “city-certified filmmaker”) and Sean Sweeney, “head of neighborhood association the SoHo Alliance”; these three are the “Locals [who] are blasting a plan to scour SoHo and NoHo lofts to ferret out non-artists living in spaces earmarked for creative types, calling the process ‘harassment’ and a violation of privacy.” Obviously, none of these three is quoted as in favor of the counting effort, but the city-certified filmmaker only says that it will be difficult, not that there is anything wrong with counting, or with SNAC’s goals. The CB2 Chair is worried that landlords will be harassing tenants through the survey, but he had nothing to say (at least to DNAInfo) about changing rules. Sweeney offered a very specific complaint, but  admits that his group is divided about the underlying rules:

"The only ones who would benefit from this survey are landlords," Sweeney said, noting that the SoHo Alliance is divided in its position.

"I fear this would be a wholesale eviction of the pioneering artists," he said.


Let’s put aside for the moment the question of technique (counting, or a survey) and whether it is a good idea, or even whether it is harassment. Instead, consider the issue on which the Soho Alliance is divided, which SNAC is working to address.

city certified artists, city zoning, and state land-use law
Of course we are talking about that peculiar regulatory intersection where one’s status as an “artist” as determined by the DCA makes it permissible to live in buildings zoned by city law as manufacturing (M-1A or M-1B categories) under a New York State law about Joint Live Work Quarters For Artists. I will link to places to get the details on this below, but here is another bizarre thing about the two DNAInfo articles: you’d never know from the first article that there is a raging controversy among Soho residents (or, at least, between “grass roots” organizations purporting to speak on behalf of Soho residents) about the regulations; and you would never know from the second article that there are principled arguments to be made in favor of changing the rules.

The main community players and their views were described in my June 8, 2011, political response to Soho artist +/or zoning 'problem'?, about a community meeting sponsored by SNAC 10 months ago. Sweeney was there, but did not speak; 35 interested locals spoke, including the two SNAC leaders quoted in the two DNAInfo articles.

That post has Manhattan Loft Guy links to my 5 earlier posts about Soho and “artists” and zoning and the Department of Buildings and the real world, which I will not re-set here. If you are new to the controversy, there is a lot to chew on within those 6 posts.

bless the internet
You probably already know that the Soho Alliance is very interested in protecting Soho and artists in Soho (and “artists” in Soho) and that its leader Sean Sweeney has been quite public in asserting that SNAC is tilting at a “problem” that is more myth than reality, though he would probably concede that it exists (if it exists at all) to help sell newspapers. Even though DNAInfo’s Andrea Swalec did not find him for her first article, Sweeney found her, and penned Comment No. 1 on the article. I suspect that comment stirred enough at DNAInfo to lead to the second article.

Sadly, Comment No. 1 is far from Sweeney’s best work, barely touching on the main issue (the Seidman family saga is his frequent touchstone, while noting that the “question of artist certification in SoHo/NoHo is complex, too complex for this Comments section”) yet blasting a “Brooklyn lawyer” as an inappropriate spokesperson for a movement to rezone SoHo/NoHo as neither credible nor ethical. The “Brooklyn lawyer” is, in fact, a real estate lawyer with a long-time Soho office and is generally recognized as one of the leading authorities on the peculiar regulations and laws involved here.

Always quotable, Sweeney’s gift of being both a colorful and effective spokesperson deserted him on this occasion. (He made the same comment, verbatim, on the Curbed feature about the DNAInfo article.)

counting? why?
Sweeney fans will be pleased to see he is back on his game in yesterday’s DNAInfo reaction piece (see the block quotes, above). Short and barbed. I just don’t get his willful refusal to acknowledge that SNAC is not publicly talking about tenant-artists, or that the survey idea is in many ways a response to his oft-stated view that there are no real world victims of the current regulatory structure and his oft-stated claims that there are many, many Soho artists who need this structure (I believe he has said “thousands”, but I can’t find a cite to that right now).

Sweeney says “many” and expects to be believed; SNAC says “let’s count” and Sweeney sees dire consequences.

As with many things about this whole controversy, I don’t understand why this is so hard, and why a survey is needed. In Tuesday’s article we learned that SNAC already has “addresses of all city-certified artists [that were] turned over to the group by the city under a Freedom of Information Act request”. Apart from verifying that these artists still live at the addresses associated with their certifications, what “survey” is needed?

Public records give the city zoning classifications of every building in Soho and Noho; public records give the names of the record owners of the building, if a rental, and of individual coop or condo units. Does anyone know how many of the “approximately 3,540 artists [who] are city-certified” (per yesterday’s DNAInfo article) are in rentals, and how many own their units? With the FOIA response in hand, that should be easy to count.

If you have 3 certified artists in a 10-unit building that is zoned M-1A or M-1B, you know that at least 7 units do not have a certified artist in them.

slicing and dicing, without harassing
You could even compare the list of “approximately 3,540 artists [who] are city-certified” to the death certificate rolls, and (probably) much reduce the number. That “approximately 3,450” sounds suspiciously like the number reported in the New York Times way back in November 2010 that started me worrying about (fixating on) Soho and A.I.R.  Christine Haughney then reported:

The Department of Cultural Affairs has certified roughly 3,400 artists since 1971, but the number of applicants shrank as the lofts filled out and the requirements began to be ignored. From 2003 to 2008, the department certified 164 artists and rejected 11.

But in 2009, the department accepted 14 artists and rejected 14. This year there have been 6 rejections and 14 acceptances.


That sounds to me as though the “approximately 3,540 artists [who] are city-certified” are the same “roughly 3,400 artists [the Department of Cultural Affairs has certified] since 1971”. If that is right, you can probably find through public records that a number have died or (in the case of coop or condo owners) sold.

The universe of more recently certified artists is much smaller, of course. Haughney reported on 192 successful applications from 2003 into November 2010; DNAInfo said yesterday there were 17 successful applicants in 2011. That is a universe of only 209 going back nearly nine years. How many of the 209 are dead, or have moved? (The certification is tied to a specific loft at a specific address; if the artist moves to another loft after a year, the “individual must apply for recertification, but need only submit information relevant to the period of time, which has elapsed since the date of the original certification”, per the DCA Notice to Applicants.)

Of course, there are easy ways to ballpark these numbers. Take that since-2003 slice of 209 certified artists. Check the death records, first. Check the addresses for coops and condos. If coops or condos, check the deed records to see how many have transfers.

In the larger universe of “approximately 3,540” and for all of the buildings, whether rentals, coops or condos, check the total number of units against the total number of certifications at each address.

You can also compare the number of transactions in M-1A or M-1B coop or condo buildings to the number of new certifications: in 2009, 14; in 2010, 14; in 2011, 17. In my November 12, 2010 post I noted 235 Soho sales had been recorded via StreetEasy since January 1, 2010; not all were in M-1A or M-1B coop or condo buildings, but a great many were. It should not be hard to do the math: check the 14 new artist certifications in 2010 against however many of the 235 sales were in M-1A or M-1B coop or condo buildings; obviously, a great many of the 235 were not sold to certified artists. The same process can be applied to the 17 new artist certifications in 2011 against however many of the 2011 sales were in M-1A or M-1B coop or condo buildings; the same result is likely.

You don’t have to harass anyone to do this.

tenants and owners have different problems, perspectives
Sweeney keeps talking about ”a wholesale eviction of the pioneering artists" and ignoring sales (he said the same thing last June in a Wall Street Journal article),  while the SNAC folks (whom I have dubbed Team Baisley in other places) keep talk about sales and saying they do not want artists evicted. A (relatively) simple and non-invasive “survey” would permit a reasonable estimate of how many of the “approximately 3,540” artists are still alive, still at their certification addresses, and are either renters or owners.

That knowledge should, in turn, lead to lower volume conversations about how to protect artists who rent, how to permit artists who own and want to sell, and how to protect those owners who are not certified artists. It may not be simple to separate out these issues, given the tangle of city zoning regulations and state law, but as I said in my March 5, 2011, is renter protection the thorniest (and separable) piece of the Soho artist in residence puzzle?, it might well be do-able. If people stop talking past one another.

not all surveys are harassment, apparently
I get it that people say things in the press that meet their interests, and regular readers should know that I do like and respect Sean Sweeney of the Soho Alliance. But his hysterical response to an idea that Team Bailey partner with an academic team to do a “survey” in Soho is a little hard to square with this, taken from a 1998 newsletter of the Soho Alliance (on their website under Archives; the weird formatting and spelling is from the newsletter):

SOHO SURVEY RESULTS
The SoHo Alliance commissioned a study of
SoHo with Columbia University Graduate
School of Architecture and City Planning.
The scope of work included ground-floor uses
and a survey of the residential com¬munity.
The survey found that over 56% of SoHo
households have at least one
artist. 107o or nousenoias nave at ieast one
person in an arts-related field. The average
resident has lived here over six¬teen years.
We have more people who work at home
than any other neighbor¬hood in the city.
The majority of respon¬dents moved to
SoHo because of its rep¬utation as an arts
center. The Arts con¬tribute over $10 bil-
lion to New York City’s economy.



The methodology is, of course, not further described, but I will bet you $0.25 that this survey did not ask how many of the 56% of SoHo households with at least one artist in 1998 included DCA certified artists.

Note that, even then, 44% of Soho households were apparently non-compliant with A.I.R. regulations, according to the Soho Alliance’s own survey. Even then.

© Sandy Mattingly 2012

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Apr. 17, 2012 - endless possibilities cost $1,160/ft in quiet Noho, at 325 Lafayette


are you following the disconnect here?
Yesterday it was an artist’s loft of “3,300 sq ft” in the bottom of Soho that cleared for $742/ft (April 16, artist loft clears at $742/ft in south Soho, 307 West Broadway). Today it is the “2,000 sq ft” Manhattan loft on the 5th floor at 325 Lafayette Street at the bottom of Noho, which cleared recently for $2.32mm, or $1,160/ft, where the “possibilities” are “endless” and the Certificate of Occupancy may soon be changed from commercial to residential. Not all possibilities are priced the same, obviously.

Figuring out why, well, that’s the goods. No promises, but let’s get into the weeds on this sale and, especially, this south Noho sale compared to yesterday’s south Soho sale, both of which promise a total gut renovation. And compared to other lofts selling around the same values. Then taking into account some fancy accounting and other complicating factors. It is enough to make my head spin, but let’s begin at the beginning, and go from there.

no bragging at all
325 Lafayette Street sit on the only block above Houston that Mulberry Street penetrates. Lafayette and Mulberry don’t quite meet at Bleecker, but they get very close, so 325 Lafayette has a funky shape, tapering towards the north end, with a virtually all windows along both long sides, plus two windows south. But aside from “27 windows, 3 exposures”, there’s no bragging about the bones. None. Nothing about classic loft elements like columns or beams (as yesterday), no tin ceilings, no brick walls. The floor plan shows 3 bedrooms and 2 baths, but if there is even a fancy faucet worth saving the agent forgot to mention it.

There are now bathrooms in opposite diagonal corners, and a kitchen in the middle of one long wall, so there seem to be enough risers to afford great flexibility in a new floor plan. Once demolition is done, this space will be the blankest of canvasses, with nary a column to be be worked around.

To review: someone just spent $1,160/ft for the opportunity to spend another (say) $300+/ft to create a dream loft. Not only is that a 56% premium over the same opportunity at 307 West Broadway yesterday (on a dollar-per-foot basis), that is a premium over other recent (going back only through February) interesting loft sales (looking only in Soho and Tribeca, and only around 2,000 sq ft), in one case after adjusting for condition (there are some serious Notes to Self … here):

  • the “2,300 sq ft” 114 Mercer Street #4 sold on April 4 for $967/ft well above ask as a “[v]ery well maintained live/work loft with recent upgrades make it move in condition”
  • the “[l]uxurious renovated 1,900 sq. ft” 114 Spring Street #3 sold on March 19 for $1,158/ft
  • the “1,850 sq ft” 38 Warren Street #7C, a 2002 conversion, sold on March 15 for $1,162/ft
  • the “1,800 sq ft” 22 Warren Street #4 sold on February 29 at $1,056/ft as “a seamless merging of the past with modern, state-of-the-art finishes”
  • the “2,23 sq ft” 73 Worth St #3F sold on February 3 at $1,063/ft as “sophisticated loft-living at its best!” with proper proper names and proper high-end materials throughout
  • the “2,150 sq ft” 60 Grand St #7 sold on February 1 at $1,095/ft as a “possibilities are endless” loft, before adjusting for “dedicated private outdoor space”

To be blunt: the recent 5th floor sale is looking like an outlier, isn’t it? But wait … there’s more....

a serious outlier, at least compared to building comp
If someone just paid $1,160/ft for the opportunity to renovate, what might the space be worth post renovation? Fortunately, there is a same building, same footprint comp, as the 4th floor sold in after a “New Mint Renovation”. Of course, since that loft sold in a near-Peak market (deed dated June 30, 2008; contract was two weeks post-Peak of the overall Manhattan residential real estate market, on April 16, 2008), you’d have to adjust for different market conditions then compared to now. Unfortunately, that logical step will make your head spin, as that new minty loft sold for $2.29mm near The Peak … a 1% deficit to the recent 5th floor sale.

The 4th floor was professionally exposed to the market, coming out September 9, 2007 (in the quarter before The Peak) at $2.65mm and dropping 3 times about every six weeks to $2.4mm before finding that April 2008 contract. The 3 quick drops in the frothiest of frothy markets shows a certain motivation, consistent with that seller’s history as a buy-and-build flipper.

For that June 2008 seller bought the 4th floor loft in February 2007 in “fair” condition at $1.85mm, took only 7 months to turn it into mints, and had it back on the market (as above) at $2.695mm by September 9, 2007. Obviously, there was no intention to live there. Obviously, the big payday did not happen.

Instead of flipping the February 2007 purchase ($925/ft) plus renovation (?$200/ft minimum?) for $1,347/ft, the 4th floor flipper got (only) $1,145/ft. Put some inevitable expenses on both ends of the round trip, and that 4th floor flipper probably got creamed, even if the renovation was done at the circa 2007 The Manhattan Loft Guy Ballpark Number For A Basic Gut of $200/ft. But let’s not get (too) distracted by that flipper’s problems, and stay focused on what the prior sale says about the recent 5th floor sale.

To be blunt, again: the 4th floor sales in 2007 (as a buy-and-build) and in 2008 (with a “New Mint Renovation”) show either that these prices were ‘wrong’ or that the recent 5th floor sale is ‘wrong’. And not by a little. The 5th floor just sold in comparable condition to the 4th floor in 2007, at a 25% premium; before adjusting for condition or market conditions, the 5th floor just sold at a 1% premium to the 4th floor in new and mint condition very, very close to The Peak.

Of course, comping is hard. And there is another element to these sales that makes comping within the broad Manhattan market hard.

financing restrictions are hard to comp
In theory, anything that reduces the buyer pool for a loft reduces the market value, right? And two things that reduce the buyer pool are unusual financing requirements and other unusual complications.

I hit below the regulatory status of the building, because that is fun. That status has serious practical consequences for a non-cash buyer, per one bit of prior broker-babble in the building:

Since this building does not yet have a Residential C of O, the Owners are willing to help supply part of the mortgage, although commercial loans are available.


Compared to even jumbo residential mortgages, commercial loans tend to have (a) higher rates and (b) higher down payment requirements. Unless a buyer is bringing all the required money to the table, using OPM will be unusually more expensive here. And more complicated.

Snark Alert: plans are just plans, until they happen (and caution)
  • August 2011: “Plans filed and work in progress to change C of O to residential”
  • November 2010: “plans are afoot to get the Residential C of O over the next 12-18 months”
  • September 2007:  “Plans filed for residential C of O”
  • July 2006: “currently a Commercial C of O, plans are afoot to get the Residential C of O over the next 12-18 months”
speaking of monthly carrying costs
This loft quotes $600/mo in monthly maintenance, with the explanation from that same prior bit of babble:

One of the most interesting things about this property is that the maintenance is only $600 and the street level stores produce high income currently providing each floor with a minimum of $25,000 income a year through a separate partnership which is included with this sale, and this figure will continue to go up.


If I am reading that right, the $600/mo is for coop cash flow, and the shareholders are members of a separate partnership that generates more than $2,000/mo in dividends from the retail rental income. Compared to a no-frills coop maintenance of, say, $1/ft in a ‘regular’ downtown Manhattan coop, this building is plus $3,400/mo, a very non-trivial amount (the $2,000/mo regular maintenance minus the $600/mo actual maintenance plus the $2,000/mo in partnership income).

There’s a way to think of that positive $3,400/mo in reduced carrying charges as financing $x amount of mortgage, so that the practical effect of this on an affordability scale is that the peculiar structure is as if the real comparative value of lofts in this Noho building were as much as $500,000 higher (as, roughly, the $3,400/mo savings could support roughly $500,000 in additional mortgage at some rate above 6%).

This significant wrinkle makes the comping to the rest of the market even more complicated. (In round numbers, the ‘free’ financing hidden in the positive $3,400/mo in reduced carrying charges adds $250/ft in value, so that the $1,160/ft in 5th floor purchase cost is more like $910/mo; among other impacts, bringing it more in line with -- but still not near -- 307 West Broadway at $742/ft for a buy-and-build.)

But it does not change at all the fact that the 5th floor is a significant outlier compared to the two sales of the 4th floor.

Did I mention that comping is hard? And fun!

© Sandy Mattingly 2012
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Apr. 16, 2012 - artist loft clears at $742/ft in south Soho, 307 West Broadway


how much more to create that masterpiece?
There is a great span of values for primitive lofts, isn’t there? Today’s specimen is the “3,300 sq ft” Manhattan loft on the 6th floor at 307 West Broadway, a roughly 36 x 90 foot canvas on which to “create a masterpiece”, as the broker babble has it, which sold for $2.45mm on April 2. The outstanding features of the canvas are the 6 wood columns supporting 90 feet of wood beam down the middle of the Long-and-Narrow footprint, with 4 windows on both of the long sides, north and south, and 6 windows at each narrow end. And some unspecified “original loft details”.

The babble is written as though one could keep the kitchen and (single) bath, while building more baths and bedrooms. But there is no bragging about any of the current as-built environment, and no photos of the kitchen or bath. Figure a total gut, then “3,300 sq ft” of premium build-out. At $300/ft, the total investment would still be only $1,042/ft. (Of course, you could spend anything on a high-end build-out; I am just talking ballparks here.)

bottom of Soho lacks (ahem) charm
There are more photos of the nearby environs than there are of the interior, which makes sense to a point. That point ends with the pic #6, looking southwest at the intersection of West Broadway and Canal Street, with its aggressive painting to prevent box-blocking suggesting the reality that the intersection tends to get backed up, with attendant horns. I applaud the presentation of reality; I wonder about the image as a sales item.

You also get pictures with the views across the street and a bit up the block, at the Soho Grand Hotel, and the north view into the courtyard between the West Broadway and Wooster sides of the Soho Mews new development next door.

upside is considerable
The loft upstairs is in move-in condition, with chef’s kitchen, spa-like master bath, “ a unique floor plan that will intrigue”, and (let’s face it) a floor plan with an artist’s loft that will be improved with some non-trivial budget; that it is in contract suggests that there is a great deal of upside to buying and building that 6th floor dream. As it happens, I hit that loft (without identifying the building) when it was featured in the New York Times on August 7, 2011, in my August 7, 2011, Soho in 1983: $211,000 for 3,300 sq ft; still an artist's loft. (I just noticed the mis-spelling of the Soho Mews condo as Soho Muse, which apparently was the ‘inspiration’ for the NY Times headline; ewwww.)

Clearly, the building has a history of long-time residents in the arts, who created living spaces that doubled as creative spaces, and that have not been much improved over the years. Note the skill set developed by the artists upstairs in The New Soho, which included negotiating with the Soho Mews developers

things like no pile driving, construction above the water table, engineer’s reports and assurances, easements, insurance and indemnification, etc, etc, etc. Not the sort of thing the artist bought her loft to get involved in, but an example of the necessities of modern Soho coop living and management


I love that evolution.

© Sandy Mattingly 2012

 

 

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Apr. 15, 2012 - Sunday diversion / has to be baseball by now, right?


or, at least baseball related
If you think this guy on Grantland is a sanctimonious jerk, so what? Read it anyway. (I don’t think he was under the desk next to me in 1962; I remember doing this in the hallway.) Then read this.

The horror!

As is often the case with things baseball (and baseball related), I’m with Neyer.

from a jerk to an icon
From the antics of Ozzie to the grace of Jackie: today is the 65th anniversary of Jackie Robinson’s Brooklyn debut, as recounted movingly by Richard Rothschild in Sports Illustrated on the web on Friday. This ain’t ancient history, folks.

Finally, some eye openers in the first two weeks of the season. First place teams this morning include:

  • Orioles
  • White Sox

Last place teams include:

  • Red Sox
  • Angels
  • Marlins

Hope springs!

© Sandy Mattingly 2012

 

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Apr. 14, 2012 - beautiful Saturday diversion / beautiful city, time lapsed


these things never get old (for me, at least)
This one, "both striking and soothing"(!), is worth 3:08 of your time.

Who knew? The city that never sleeps, can soothe. It starts with the Flatiron and pauses in the Meatpacking, so technicaly there is a Manhattan loft angle to this diversion, but that is over-thinking it.... Enjoy!

The h/t goes to the Andrew Sulivan team, even while he is away.


© Sandy Mattingly 2012

 

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Apr. 13, 2012 - why did 48 Great Jones Street 1-bedroom loft sell 18% above Peak value?


“masterful renovation” does not explain
The story line for the recent sale of the “2,564 sq ft” Manhattan loft #6R at 48 Great Jones Street seems pretty obvious from the broker babble and the price history. The loft has been “[m]asterfully renovated with no expense spared” and sold on $3.5mm on March 15, after having sold at The Peak in the overall Manhattan residential real estate market, on January 3, 2008, for (only) $2.96mm. You might wonder if the cost of the masterful renovation exceeded the gain from 2008, but you would assume that such a large gain over a Peak sale is due to the difference in condition of the loft, Then v. Now, and not to a change in market conditions. The logic is impeccable, but the real world is more complicated, because when this loft sold in 2008 it was … (wait for it) … “[m]asterfully renovated with no expense spared”.

In fact, I am going to spoil the punchline to get to the dilemma: when this loft sold in January 2008 at $2.96mm it was not only “[m]asterfully renovated with no expense spared”, it was in essentially the same condition as when it just sold for $3.5mm. (I say “essentially the same condition” out of an abundance of caution: I am reliably informed that the recent listing photos portray the same finishes and condition as when it sold in 2008; if there are any differences at all they are (a) not visible in the photos and (b) not the subject of any broker babble.)

For reasons unknown, the listing leading to that January 2008 sale is not available StreetEasy, but our data-base confirms that the loft was fully exposed to the market before selling then for $2.96mm.

fans of the efficient market theory are not amused
Let’s beat this horse one more time: without a change in condition, loft #6R gained 18% in market value from The Peak of the overall Manhattan residential real estate market until now.

In the absence of a reasonable explanation, I have to label this sale a simple (dramatic) outlier. Wasn’t it just two days ago that I said “[t]he fickle market does as the fickle market does”? Of course it was, in my April 11, motivated seller sells classic Soho walk-up loft barely above 2005 at 477 Broome Street. I have (can conceive of) 3 possible “explanations”, none of which is particularly likely or supportable with data.   

I don’t love any of these theories, so I am leaning toward The Fickle Market. They are each possible, just not likely; but one is more likely than the other two (down below).

marketing sequences, and text
The recent listing history of #6R is odd, as it is not clear that the famous PruDE team that marketed the loft actually found the buyer, or whether this was a private deal that happened to hit the last ask:

May 27, 2011 new to market $3.5mm
June 1   $3.6mm
July 18   $3.5mm
Aug 27 or 29 something happened*  
Mar 15, 2012 sold $3.5mm

(*StreetEasy says “listing sold” August 27, which sometimes really means it went into contract then, but the inter-firm data-base says the listing expired August 29, and the eventual sale is not associated with the PruDE listing.)

The campaign was successful (the loft sold at the ask, at a [ahem] ridiculous premium to the prior sale0; it may not have been remunerative for any REBNY members, however.

The (missing) campaign in 2007 from the inter-firm data-base shows the loft was long exposed to the market approaching The Peak, and that even that market insisted on a discount off the first ask, while offering a premium to the last ask:

July 27, 2007 new to market $3.125mm
Aug 16   $2.95mm
Nov 27 contract  
Jan 3, 2008 sold $2.96mm

Indulge me for a(nother) moment, as I quote from the broker babble from the recent sale, and that of the 2008 sale (again, taken from the inter-firm data-base):

ONE BEDROOM PLUS A SECOND INTERIOR BEDROOM. Masterfully renovated with no expense spared, this gorgeous triple-mint loft offers approximately 2600SF of unique luxury living in the historical and most vibrant neighborhood of NoHo. This chic property features a sleek living and dining area complete with a 55’ Samsung plasma TV, elaborate entertainment center with B&W surround-sound speakers; a magnificent open chefs kitchen featuring White Carrera marble counter tops, Viking refrigerator, Sub Zero mini refrigerator, Sub Zero wine storage and Marvel ice machine, Wolf range w/Faber hood, Thermador oven, Fisher Paykel dishwasher, custom fine dark Walnut wood cabinetry and large breakfast island. Separate laundry room with Tromm W/D. Tastefully designed custom slate baths and California style custom Walnut closets and doors; 11ft high ceils, Brazilian walnut hardwood floors, exposed brick walls and abundant light from the 11 huge, double Thermopane windows. Grand master suite and bath features unique floor lighting throughout, huge oversize 8 jet Jacuzzi tub with 19? flat screen TV and separate rain shower stall. This entire property has been fitted with elaborate easy touch lighting.


That 2011 prose is a pretty sincere form of flattery of this, from 2007:

Masterfully renovated with no expense spared, this gorgeous triple-mint loft offers approximately 2600 square feet of unique luxury living in the historical and most vibrant neighborhood of NoHo. This chic property features a sleek living and dining area complete with a 55 Sony plasma TV, elaborate entertainment center with B&W surround-sound speakers and sound proof walls; a magnificent open chefs kitchen featuring White Carrera marble counter tops, Viking refrigerator, Sub Zero mini refrigerator, Sub Zero wine storage and Marvel ice machine, Wolf range with Faber hood, Thermador oven, Fisher Paykel dishwasher, custom fine dark Walnut wood cabinetry and large breakfast island. Separate laundry room with Tromm washer/dryer.

Tastefully designed custom slate baths and California style custom Walnut closets and doors; high 11ft ceilings, Brazilian walnut hardwood floors, exposed brick walls and abundant light from the 11 huge, double Thermopane windows. Grand master suite and bath features unique floor lighting throughout, huge oversized 8 jet Jacuzzi tub with 19 flat screen TV and separate rain shower stall. This entire property has been fitted with an elaborate easy touch lighting system and remote control air conditioners.

I know it is rude to offer such large block quotes, but here is a short-cut: the only difference I see is that they changed the 2008 Sony plasma television into a 2011 Samsung plasma television. The proper names are still proper and otherwise identical; the materials are the same; 2011 is nearly 2007, verbatim. Sincere flattery, indeed.

how far off the (building) charts?
Compared to itself, the recent loft #6R sale is off the charts, at a premium of 18% over the last sale in the quarter with the highest recorded prices ever in the overall Manhattan residential real estate market.

But it is not so far off the charts in the building, based on the sale of the “2,500 sq ft” #4F on April 22, 2011. I will spare you a block quote, but that loft was in wonderful condition (“[d]istinguished design and an impeccable renovation”, “meticulous attention to detail and materials”). When it sold just over a year before The Peak it was a build-your-dream loft, full of potential. Starting with that sale, here is the history of loft #4F:

Dec 1, 2006 sold $2,146,500
June 9, 2010 new to market $3.5mm
Dec 2   $3.38mm
Feb 19, 2011   $3.5mm
April 22 sold $3.24mm

I hit that sale when it was fresh, in my May 1, 2011, was Great Jones Street loft a million dollar renovation?, in which I wondered how much value between the sales was added by the renovation and how much by The Market. (Hint: if they spent under $400/ft, they banked some money; if not, not.)

Here we have an example of a pre-Peak sale of a needs-everything loft that resold a year ago (essentially the same overall market conditions as today) at a 50% premium (gross). That hardly seems outlandish, right?

Yet #6R just sold at an 18% premium to itself at Peak, but at a much smaller premium to #4F on a dollar per foot basis. (5.3%, with #4F at $1,296/ft, #6R at $1,365/ft.) Maybe it is a micro-nabe thing, and for reasons that I can neither see nor guess, Great Jones Street is undergoing a post-Peak boom. Maybe.

Or maybe it is just a fickle darn market.

© Sandy Mattingly 2012

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Apr. 12, 2012 - loft at 4 West 21 Street an outlier, closes 9% off 2006


can we just put them in red?
One of the major challenges with considering market values of Manhattan loft (whether you are an agent representing a seller, a buyer, or one of the many interested bystanders), is figuring out which sale prices are outliers, and in what ways. In the case of the “1,658 sq ft” Manhattan loft #10B at 4 West 21 Street, I believe that the recent sale at $1.88mm is an outlier in the sense that it closed lower than the sponsor sale in 2006 (most of the market should be trading higher than in 2006), but not an outlier for the building (it still did better on resale than neighboring lofts). I would hazard that the recent sale is a fair value under current market conditions, but that the sponsor prices were higher than fair value under then-current market conditions.

It has got to be one sale or another that is ‘off’, and I am going with the sponsor sale in this case. Let’s look at the loft and the history, then I will explain why I think the 2006 clearing price is more suspect than the 2006 2012 [oops] clearing price.

very efficient, for those who like that sort of thing
This northwest Flatiron loft squeezes 3 bedrooms and 3 baths into a Long-and-Narrow footprint that, at the quoted “1,658 sq ft” is not all that long. Of course there are lofts much bigger than this that don’t have 3 bedrooms. This seller undid that 3rd bedroom for a den that opens up the living space dramatically, making the space much more loft-like. The sponsor was clearly going for the ‘affordable’ 3-bedroom market with the original configuration, but I wonder why they did an en suite 2nd bath and a full public bath, instead of using some of that space for more closets. (But I quibble.)

The building (dubbed 4W21, helpfully) was built new, and pushes the envelope as to whether or not it is a “loft” building. (See my evident angst in my April 7, NY Times on Chelsea penthouse leads me to wonder “what is a loft”?.) In this case, the architect thought he was re-interpreting the loft form (“reinterprets and updates the traditional stone and cast industrial lofts of the neighborhood”; successfully, per the photo on The Shark), the sponsor billed them as lofts, and the resale marketing continues to market them as lofts. I am not going to swim against that tide.

nice try, soon abandoned
The recent sellers paid the sponsor $2,067,047 on December 15, 2006. Our data-base reflects that a contract was signed in April 2006 and later failed, with the successful contract being signed on September 12, 2006. The asking price jumped quickly from $1,965,000 to $1,995,000 to $2,030,000 in the first few weeks it was marketed in the Fall of 2005. (Those were the days.) As was customary then, the sponsor “negotiated” that the buyers pay the NYS and NYC transfer taxes that would otherwise be paid by the seller, adding $37,047 to the asking price for the deed record price.

Those buyers asked The Market to pay them a slight premium on resale. The Market refused, but those buyers reacted instead of moping:

Nov 9, 2011 new to market $2.1mm
Jan 4, 2012   $1.995mm
Feb 1 contract  
Mar 14 sold $1.88mm

Sellers are out their expenses, of course, so in addition to the 9% hit on the sales price, the sellers paid a 6% sales fee and those pesky 1.825% transfer taxes. Whatever they paid their movers would have seemed cheap in comparison, by the time they got up from the closing table. I can’t see how much they put down in 2006, though they did put on some kind of mortgage (again, The Shark). If they only put down 10% originally, they would have been writing a lot of checks at closing (10% minus 9% hit minus 6% sales fee minus 1.825% transfer taxes = ouch).

none of the neighbors getting out alive can’t help much
The loft right upstairs had a worse experience, on both ends.  Loft #11B has the identical finishes and floor plan to #10B, including the den. It sold on July 28, 2011 at $1.815mm, or $65,000 less than #10B 8 months later. Worse (for that seller), the sponsor price in September 2006 was $2,102,686, or $35,639 more than #10B. As badly as the #10B sellers felt when they left the closing table last month, they were $100,000 better off than their former neighbors above them.

There was one loft sale in the building (4W21!)  between these two “B” neighbors. The “1,518 sq ft” loft #6D was bought from the sponsor later than the others, on January 22, 2007 at $1,781,937. It resold on December 27, 2011 at $1.695mm, (only) a 5% hit. Not as much red ink, but still....

which market price is out of whack? a theory about new development froth
Efficient market fans hold that the market price is the market price (is the market price, etc). Even the sales price of a Manhattan loft can’t be ‘wrong’ if it was exposed to the market and no guns were involved.

For having closed in 2012 9% lower than the sales price in 2006, loft #10B deviates at least once from the overall Manhattan residential real estate market. Either 2006 was ‘too high’, or 2012 ‘too low’, or some combination of both. I believe that in cases like this, the sponsor got the benefit of an over-optimistic market, which is a theory that can only be validated after the fact, if at all.

If you have looked at my September 27, 2011, is the Manhattan loft market back to (up to) 2007? 61 repeat sales say “probably”, “a bit”, and especially at the associated spreadsheet, you know that new developments are over-represented in the loser category of 2007-2011 paired resales (12 of the 27 lofts that closed lower in 2011 than in 2007 were new developments; 13 of 52 lofts that closed higher in 2011 than in 2007 were new developments).

Two things might explain this, at least as tendencies: in the froth leading up to The Peak, there was more buyer excitement about the (seemingly) scarce and oh-so-new new developments than they were about resales of ‘old’ lofts; and the sponsor sold into a buyer world that assumed that everything the sponsor promised would come true, including about the quality of workmanship, the financial ability of the sponsor to stand behind the work, and the prediction that the projected operating budget would suffice without immediate or significant increases in common charges or maintenance. The current market is more cynical jaded realistic, with the benefit of hindsight, among other reality-based aids.

I don’t know of any particular building problems with 4W21 (and don’t mean to suggest that there were any) but it was certainly not an uncommon thing for new developments in this era to have had post-closing problems with sponsors.

But look at monthly maintenance at 4W21: when loft #10B was marketed in 2005, the maintenance was said to be $2,270/mo, per our data-base, but when it just sold the maintenance had increased to $3,646/mo. That’s a 61% increase. 4W21 is a condop, so that includes the allocable share of real estate taxes for the coop plus the operating expenses; I know of new development condos in which common charges have essentially doubled in 4+ years. Perhaps the market is reflecting those higher monthly carrying costs into the purchase valuation calculation. If so, the market is smarter than I generally give it credit for.

Note to Self … check this theory against other new developments.

© Sandy Mattingly 2012

 

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Apr. 11, 2012 - motivated seller sells classic Soho walk-up loft barely above 2005 at 477 Broome Street


the proof is in the ask
The seller of the very well-dressed but also well-staired “982 sq ft”* Manhattan (mini) loft #34 at 477 Broome Street proved she was motivated by asking for a modest premium over the price she paid in 2005, and by taking a small discount to sign a contract at a tiny premium over 2005. Had  she been less motivated, she would have started higher and refused to budge if no one made her a deal in a year. Oh wait …

June 24, 2005 sold $1.15mm
     
Sept 22, 2009 new to market $1.295mm
Sept 24, 2010 off market  
     
Oct 24, 2011 new to market $1.195mm
Dec 19 contract  
Mar 14, 2012 sold $1.16mm

The resale at a $10,000 gain over her 2005 purchase (0.087%) was hardly sufficient to pay her sales fee, but she got out.  Her recent asking price 3.9% over her 2005 purchase wouldn’t pay that either, but she got out. Unlike her experience in 2009 and 2010, when (it appears) she did not need to get out. We don’t know what her recent motivation was; we just know it was there.

idiosyncrasy is in the eye of the beholder
You know the Conventional Wisdom that warns people against unusual STRIKE unconventional design and color choices? I know at least two sellers who did not subscribe to that CW.

That 2005 seller changed the look of this loft sometime after buying it in 2001. I can’t tell  from the pictures if that mottled look on the  long left wall as you enter is concrete, a concrete finish, or (if painted) some waxed (“Venetian”) plaster or paint, and none of the babble helps. (Perhaps that is the most clear indication that it is just paint.) Whatever it is, it is an unusual unconventional choice.

The babble does not give you any help in figuring out how extensive the  “sublime” renovation was. You can’t see the original floor plan, but it has not changed since the sponsor sold it in 2001. I suspect the renovation was limited to that wall finish (whatever it is), plus the bragged-about built-ins, and maybe the stone bathroom was upgraded. Even post-renovation, the kitchen is bragged about as (ahem) “open”. The 2005 seller did whatever was done, and was rewarded for it: she bought in March 2001 at $491,000, “sublimely renovated” to whatever degree, and sold in June 2005 at $1.15mm.

The 2005-buyer-turned-2012-seller also loved the look, enough to go to war for it. You can’t see the 2005 listing photos or information on StreetEasy, but our data-base shows pix with the same finishes and a frothy history: offered on January 12, 2005 at $995,000, in contract by February 2 and closed on June 28 at that $1.15mm, a 15.6% premium over ask.

By the time that 2005-buyer-turned-wannabe-seller wanted to sell in September 2009, the overall Manhattan residential real estate market had been thawing out for at least a calendar quarter, yet she could not sell at (only) a  9% premium over her 2005 purchase price. For a year. (Yes, she was stubborn.) Evidently, there were fewer people interested in the unusual unconventional choice of wall finishes, at least if they had to walk up two flights of stairs to get there.

The fickle market does as the fickle market does. What in 2005 was worth $1.15mm could not be sold in 2009 or 2010 at a reasonable discount to $1.295mm,.and garnered only $1.16mm  in 2012.
_________________
* StreetEasy says “1,050 sq ft”, but we have “982 sq ft” in our data-base

© Sandy Mattingly 2012

 

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Apr. 9, 2012 - 195 Hudson Street loft takes deep haircut to close up 385% (since last century)


speaking of low-balls …
Since the “2,325 sq ft” Manhattan loft #3D at 195 Hudson Street recently sold at $2.85mm after having been asking $3.5mm, you have to wonder just how low that negotiation started. A negotiated discount of 18.6% implies an opening bid that would be considered a low-ball if it had not been so successful. Sometimes, at least, a “low ball” bid is not a problem for anyone, contra the media meme I addressed just last week in my April 6, testing a media meme in the Manhattan loft lab: low-balling and the too-low offer.

The relatively brief sales history is interesting, for having few months and but one price:

Oct 4, 2011 new to market $3.5mm
Dec 20 contract  
Mar 16, 2012 sold $2.85mm

A short but brutal history like this makes me wonder about who, as between the seller and the agent, was pushing the asking price at the start. They agreed on the ask, of course, and the seller was convinced that a big haircut was in order to get a deal within only 10 weeks. A lot of sellers would only entertain a bid 20% off the asking price if they dropped the price (say, 10%) to signal to the entire potential buyer pool a willingness to cut a deep deal. Some buyers who would be willing to spend near $3mm would not pay much attention to units asking a half million too high. They might well participate on an ask much closer to $3mm than an ask of $3.5mm.

Whatever the back story, the seller turned out to be pretty darn negotiable after a relatively short time for such a dramatically different approach. Having paid $588,000 for the raw loft in a 1999 sponsor sale (plus whatever the lovely build-out cost), the seller evidently had enough room to make a comfortable sale at even a large discount. Especially, as explained below, the $2.85mm clearing price was a strong sale based on building comps.

is light an over-rated loft feature?
The floor plan is only on the PrUDE site, not on StreetEasy for some reason. Especially for a loft that sold at over $1,200/ft, it is a floor plan with issues. Issue No. 1: only one wall with windows. Issue No. 2: only one “bedroom”, as built, and that with no windows (but glass walls). Issue No. 3: the long wall of windows faces west, at the east facade, with brick, windows and fire escapes, of the 7-story building an alley-width away (see the building photo #7 on the listing, and note the windows in the living room and kitchen photos).

So … there is no view and limited light into the living room, kitchen and (unpictured) den, and light in the master suite only when the custom “window coverings” on the glass walls are open to the den and living area. (In the 5th photo you can see the glass walls of the study on the right and the master on the left, both with drapes closed.) While the extensive glass makes the loft as bright as it can be, there are real limits to how bright it can be.

loft comping is hard, but fun
Compare the #3D floor plan to the #5D plan to see that there are choices within this same footprint. The #5D original owner put (real) bedrooms in the opposite corners of the window wall, where the #3D kitchen and den are), moved the kitchen back along the north wall, and showed that there are plumbing stacks for an en suite master bath, a second bath in the southeast corner, and the potential for a full bath adjacent to the second bedroom. The light is evidently better from the 5th floor (“Good Light, No Views”, per the #5D 2010-2011 broker babble) and the layout differences are matched by the very different looks of #3D and #5D from the different use of colors and materials. You would not know from the listing photos that you were looking at 2 lofts in the same part of the same building, 2 floors apart.

Where #3D has dark and light (ebony stained floors, all that glass), #5D has blonde floors and kitchen cabinetry, and solid bedroom walls topped by clerestory windows. Where #3D will have a somewhat pinched sense of space from the entry (look at that 5th listing photo), #5D will seem wide open. Where #3D is sleek and modern, #5D features 4 “mushroom” columns as classic loft features (I see only two in the #3D pix, and none on the floor plan??).

Loft #5D was marketed as having high-end finishes: proper proper names in the kitchen, a “Spa-Like, Ensuite [master] Bath including 2 person Jacuzzi tub and bidet”, and a “Second spacious Bathroom [with] Steam Shower”, but The Market did not like it anywhere near as well a it liked #3D a year later. #5D came out at $2.28mm in November 2010 and sold on June 23, 2011 at $1,875,990, a number that screams out a contentious negotiation.

Note that #5D sold with but one asking price, and that the (eventual) deal was at a 17.7% discount to the ask (the agent changed firms mid-stream; I see no price changes before contract). So the two lofts have that discount in common.

But note the vastly different values: sleek and glassy #3D cleared at $1,226/ft last month; the slightly smaller (“2,299 sq ft”), blonde and open #5D cleared at $816/ft last June. For those scoring at home, that is a 50% premium for #3D over #5D; remember my statement up top that “the $2.85mm clearing price was a strong sale based on building comps”? Make that a very strong sale.

Remember my comment on how different these two lofts look? You would not know from the clearing prices that you were looking at 2 lofts in the same part of the same building, 2 floors apart, both built out new in 1999.

one more time
When #5D came to market in November 2010, #4D had sold 5 months earlier. Same footprint, but yet another different floor plan (one real bedroom, 2 interior ‘bedrooms’). You can’t see the pix very well and the babble lacks the enthusiasm or detail of that of #3D, but the experienced loft agent called #4D “stunning”, and the stainless + granite kitchen “gourmet”. I will stop after noting that the $2.32mm sales price on June 30, 2010 comes to $1,010/ft, about half-way between #3D and #5D.

With this building sale context, you can see that the #3D seller was maybe not too disappointed to move off of the $3.5mm ask. Even if selling at $1,226/ft was no where near top building values (I hit a sale at $1,548/ft in my September 6, 2011, was there a million dollar renovation at 195 Hudson Street?). Now I will stop....

© Sandy Mattingly 2012

 

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

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