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Manhattan Loft Guy

Mar. 9, 2012 - "bring your vision" loft at 111 Fourth Avenue sells +15% over 2004, nonetheless


or was it already the place “you’ve been waiting for”?
It is probably a fool’s game to try to make too much sense of too much broker babble. But my edition of The Babble Primer would reserve a statement like “the apartment you’ve been waiting for” for units that are done, usually in a most appealing way, while using the dog whistles “bring your vision” and “bring your architect” (let alone the combo “bring your vision and your architect”) for spaces that are so in need of completion or updating that you need (you know) some vision. Or an architect. Or both.

All of which is a very long, very Manhattan Loft Guy introduction to a small loft, the “725 sq ft” Manhattan loft #8F at 111 Fourth Avenue. Like many small lofts in this building, the outstanding measurement is from floor to ceiling, and owners have done a variety of things to take advantage of the height. In this case, there is a “lofted area” over the bedroom (babble hint: for a den or office) and a lofted “storage area” over the entry, the kitchen and bathroom. Semantically, there is no necessary conflict between “bring your vision and your architect” and “the apartment you’ve been waiting for”; it is just that they sell different things.

If you love loft #8F exactly as it is, then (Q.E.D.!) it is “the apartment you’ve been waiting for”; if it is not exactly what you’ve been looking for, put on your vision and partner with your architect. Whatever … it worked. Even with only two interior photos, and none of the kitchen or bath. You can’t argue that is is a successful campaign:

Oct 25, 2011 new to market $719,000
Nov 18 contract  
Feb 10, 2012 sold $700,000

That is a contract within 4 weeks within 97% of the ask. You can’t (shouldn’t) ask more for a marketing campaign. Even if the accomplishment is modest, the loft having last sold on July 12, 2004 for $608,000. That is a mere 15% appreciation in 7+ years, measured from a sale that was almost 4 years before The Peak.

then, now
I can say with a high degree of confidence that nothing material has changed in this loft from 2004 to 2012. You can’t see the listing photos from 2004, but they show the same shelves and lower cabinet in the living room then, as now; the same shelves in the upper office then, as now; and the same shelves and light fixtures in the bedroom then, as now. (The books look new.) Granted there are now before-and-after kitchen or bath photos, but what are the chances?

Everything about this loft and sale is modest. Except the windows, babbled here as “western light pouring through the giant original industrial windows and breathtaking sunsets”; babbled then as “13 foot ceilings... [g]reat light and views, watch the sunset over Grace church from a wall of 10 Foot windows!”. The windows alone might make loft #8E the apartment you’ve been waiting for; if you have the right vision. Or architect.

other sales, other posts
In the course of having a one-sided argument about something else with The Miller and with Vivian Toy of the New York Times (one-sided in the way that a blog post in response to a NY Times article rarely generates a response, in turn), I mentioned 10 other 2010-2011 sales in the building of small lofts in my October 12, 2011, 111 Fourth Avenue combination loft closes after 19 months at 30% off original ask. Looking at the table of 10 sales, I can’t remember where I got the size data for #6F, which sold last August in a private sale to the next door neighbors, but iI did not use the “725 sq ft” that our data-base has for #8F.

I also have no idea how the then-#6F owner and the neighbor in #6G decided on the sale price for #6F, but someone should be very happy that it matches the fully-exposed-to-market value of #8F last month.

My May 23, 2011, 111 Fourth Avenue lofted loft gains 12% since 2007 sale, dealt with one of those sales in more detail. The key take-away for present purposes is loft #6B sold in April 2011 at a 12% premium to a near-Peak prior sale (in October 2007), compared to #8F selling +15% over a much older prior sale.

a mind is a terrible thing to waste
It is good to have seen that #6B post again, because it reminds me of an interesting thing I used to not know, then learned, then forgot: that 111 Fourth Avenue has a name: International Tailoring Company Building. Note to self: try to remember....

© Sandy Mattingly 2012
 

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Jan. 19, 2012 - changing firms + raising price after 7 months does the trick for 67 East 11 Street cast iron loft


no Virginia, there is no rational market (not here, at least)

Fans of the efficient market theory for the Manhattan residential real estate market should be surprised if a loft is offered within $5,000 of its value but takes 7 months to find a contract. Surprise! Not only was the “687 sq ft” mini-loft #301 at 67 West 11 Street (the Cast Iron Building) offered within $5,000 of its value from March 7, 2011 until its contract by October 24, for 4 of those months it was offered below its value.

Go figure:

Nov 18, 2010 new to market $799,000
Mar 7, 2011   $749,000
July 1 off the market  
July 15 change firms $759,000
 Oct 24 contract  
Dec 7 sold $754,000

Even at the beginning of the 11 month pre-contract period, the asking price for loft #301 was within 6% of its (eventually established) market value. That small a gap is bridged every day in the Manhattan residential real estate market, yet this one lingered.

Even fans of the efficient market theory for the Manhattan residential real estate market acknowledge that the theory works more weakly in a thin market, one with relatively little buying activity. Certainly the overall Manhattan market was deep in 2011, with a comparatively high number of sales, but perhaps the market for a mini-loft with a very idiosyncratic floor plan and a single window was a slow segment of a slice of a niche.

my first-ever “A” floor plan
The successful marketing campaign (the one beginning July 15) did not include a floor plan, and I have to wonder if that helped. I wonder if people might have ignored the prior listing because this floor plan was hard to imagine as living space, even though people (one person, at least) appreciated the space when in it enough to buy it. I would have no clue what to call this footprint if it had a single level, but the mezzanine line makes it an almost perfect “A”. You don’t see those every day.

Nor do you see many lofts that taper to less than 6 feet. I can think of a 2008-ish new development in 7th Avenue in the West Village, and maybe some other new developments (Morton Square?), but these tapered lofts have significantly more space than loft #301, which is less than 30 feet long.

a gut feeling about the renovation
Of course the successful marketing campaign bragged about a gut renovation (using the word “gut” twice in the first 10 words of the substantive broker babble). You’d almost want the loft to have been sold in the exact same condition as it was in September 2005, as the 2005-buyer-turned-2011-seller got only an 8% premium on resale, compared to the $695,100 he paid then.

There’s not much room in a renovation budget of $58,900 to “gut” renovate to a “gourmet kitchen with top of the line appliances” and “an ultra modern bath,” and “beautiful hardwood floors”, before you are looking at a decline in market value 2005 to (unimproved) 2011. But I think they are talking about someone else’s gut.

You cannot see the 2005 listing on StreetEasy or anywhere else public, but I can see the floor plan and the photos from that sale. I don’t see an intervening gut. From the floor plans, the only difference is a reconfigured kitchen, withe the refrigerator moving across the entry way into what had been a hall closet, and the closet/pantry being added on that wall under the mezzanine. Bathroom set-up is exactly the same. From the pictures, the kitchen has new stainless steel appliances but the same cabinets as in 2005. Upstairs, the doors to the closets are new.

They might have been able to do all this for about $15,000. So maybe the did pocket as much as  about $45,000 in the resale (without considering other expenses of the transactions).

fun fact from 1996
Our data base reveals that the last sale before 2005 was in December 1996, when the loft sold for $125,000. I can’t see pix of a floor plan from that long ago day, but it makes more sense that the real gut renovation was between 1996 ($125,000) and 2005 ($695,100) than between 2005 and 2011, doesn’t it?


© Sandy Mattingly 2012

 

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Nov. 12, 2011 - Astor Place loft seller takes wee bath since 2005 at 445 Lafayette Street


almost a diversion, for being tardy
This one has been sitting in my To Do pile for a while, but is interesting enough for even a tardy post because it involves A Famous Building that (in this case, at least) has not held its own since the original sale in 2005. This case is the “1,681 sq ft” Manhattan loft #7B at 445 Lafayette Street (aka “Astor Place”, being that it is on Astor Place), purchased from the sponsor for $2,443,800 on November 18, 2005 and sold by that purchaser on July 22 for $2.395mm. (In fact, it leads to all sorts of places and times, as you will see.)

I say “wee bath” in the title, but the bath is actually a wee bit bigger than these numbers show. Because of the vagaries of how prices are recorded in New York City’s ACRIS system, that 2005 recorded purchase price includes the City and State transfer taxes (1.825%) because they were (by common convention in a hot new development market in Manhattan such as this building at that time) paid by the buyer, not the seller. The asking price in 2005 for loft #7B was $2.4mm, and the recorded purchase price is exactly that plus 1.825%.

Why does this matter? Because the NYC and NYS transfer taxes are paid by the seller on resale and not recorded in the purchase price, so the 2005-buyer-who-paid-transfer-taxes sold this Summer for $2.395mm and paid transfer taxes of 1.825% (again!), or $43,709. He netted $2,351,291 before considering other (smaller) transaction costs, so his bubbles-to-bubbles-bath on resale was $92,509, or 3.8%. Still a wee bath; just not as wee.

With only two bedrooms, there is an awful lot of room in this “1,681 sq ft” loft, enhanced by floor-to-ceiling windows. Of course, this is the building that put the sex in curved curtain walls, so there are curved walls in opposite south corners, in the master and in the great room. The money views in this building are on the other side of he building, facing north up the broad crossing of Fourth Avenue and Lafayette Street, and I cannot be sure how far the south views extend from the 7th floor. But one certainly hopes the babble is not being maddeningly precise but inaccurate in suggesting that the “undulating walls of floor to ceiling glass that maximize views of the Manhattan skyline”, if there is not much to ‘maximize’. I have reason to be skeptical.

bigger bath higher up (not much higher, but much bigger)
In wondering whether this guy’s experience of taking a small bath from his sponsor purchase in 2005 was typical, I noted that loft #9B sold last year at $2.375mm (I will trace that deed in a bit). That seller is hard to trace, but (trust me, and i will explain) took a real bath. Enough of a bath that I can conclude that Astor Place has a problem keeping its head above water (at least from the south), and that the 9th floor must have much better southern views than the 7th floor (even if the 7th floor views are “maximized” by the windows).

The #9B sponsor sale (offered at $2.95mm, per our data-base) matches up in price and deed names to this purchase on October 29, 2005 for $3,003,837 (the ask was $2.95mm, that plus 1.825% = the recorded price). Lofts #7B and #9B have the exact same floor plan in the exact same corner of the building, yet they were priced by the sponsor in 2005 $550,000 apart. What might account for the 23% premium of #9B over #7B? The only thing that makes sense is the view, or rather that #9B has a view and #7B has only “light”. Damn that maddeningly precise but inaccurate broker babble for #7B!

no bath lower
Let’s do one more, with a very different resale experience due to very different timing (luck!). Loft #6B is the last “B” line to sell before the 7th and 9th floor specimens, way back in another world, on June 27, 2007 for $2.71mm (I know that deed is #6B because our data-base links that listing to that sale price on that day). The phenomenon of new development resellers having hugely different results depending on which year they sold is not new, so chalk this up to Exhibit H or L in that series. The 6th floor “B” seller sold for $300,000+ more than either the 7th or 9th floor seller because that seller had the good fortune to sell into The Peak rather than after it.

It should not be a surprise that that #6B seller in June 2007 made a profit instead of taking a bath. Matching up sale dates and asking prices in our data-base, and 2007 deed name to sponsor deed name, confirms that the 2005-#6B-buyer-turned-2007-seller paid $2,392,887 on November 3, 2005, or nearly $400,000 less than it sold for two years later (before expenses, of course).

Note another thing about that 2005 price: it is evidence that the sponsor assessed view-independent values on this part of the “B” line as worth exactly $50,000. If that formula held for the 9th floor, the 9th floor original sale price would have been only $100,000 more than the 7th floor … not $550,000. In other words, the sponsor valued the view from #9B as worth $450,000 more than the “maximized” light in #7B in 2005, and The Market agreed by paying full price for each. Double damn that maddeningly precise but inaccurate broker babble for #7B!

seller has a thing for neighborhood icons
Voyeur alert: I have not discovered (yet!) where the July seller of #7B has gone, but the deed record notice address shows where he came from. To move to loft #7B in the gateway to NYU-ville the East Village in 2005, he sold the “983 sq ft” Manhattan loft #10N at 252 Seventh Avenue (the Chelsea Mercantile) for $1.095mm on April 25, 2005, in a building which was as groundbreaking / neighborhood-making in its day as Astor Place was in 2005.

StreetEasy’s past listings don’t go back that far, of course, but our data-base shows that it took him just 2 months to get a contract for loft #10N, and that this loft has a studio layout: windows on only one wall, with a (dark) “home office” at the other end of the loft, behind the kitchen. (No doubt, everybody who lives in this layout sleeps in the work space.) That marketing did claim that the loft is “drenched with morning sunlight”, but does not claim a view, though it faces Seventh Avenue.

I can’t find the deed record for his original purchase at the Chelsea Merc (I am probably scrolling right past it), but our data-base shows that he purchased #10N in the original offering on October 27, 2000 for $485,000.

paging Patti Lupone
So even if you are inclined towards sympathy for new development buyers who don’t make a huge profit on resale (such as this guy at Astor Place), you may be heartened by his experience of selling a new development buy at the Chelsea Merc for more than twice what he paid for it. Of course, through the magic of leverage, his gain at the Merc was more like 500%, if he put down as much as 20% in 2000.

That’s how one gets one’s foot in the door of Manhattan residential real estate. That $500,000 profit from the Chelsea Merc would have made a lovely down payment on the 2005 purchase at Astor Place for $2,443,800.

© Sandy Mattingly 2011
 

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Oct. 12, 2011 - 111 Fourth Avenue combination loft closes after 19 months at 30% off original ask


can you see a premium for a combined space?
It should not be a surprise if the sellers of the Manhattan loft combination #2HIJ at 111 Fourth Avenue expected to be paid a premium for having put together 3 small lofts in a building full of small lofts. After all, as recounted by VToy in the New York Times last month, the Conventional Wisdom is that 1+1=2.5, meaning that larger combined units are thought to be more valuable than the same units as separate units. (Note to The Miller: remember, my beef with VToy’s point in my September 10, deconstructing NY Times article about combining apartments to increase value, was not that she was wrong about the conventional Wisdom, just about her participation in the Real Estate Industrial Complex in Manhattan by the examples she used to ‘prove’ the CW.)

While it is hard to see that the CW was right in this case, it is painfully clear that the sellers were very wrong about the market value of what they had created. To the tune of taking more than 15 months to find a contract, at a 30% discount from where they had started:

Feb 23, 2010 new to market $2.65mm
April 26   $2.475mm
July 29   $2.25mm
Jan 27, 2011   $2.1mm
April 21   $1.975mm
June 4 contract  
Sept 21 sold $1.85mm

how big, more or less?
Loft dimensions in our data-base for this building are irritatingly variable, but it appears that the #2HIJ combination includes “2,225 sq ft”, with “1,000 sq ft from the “I” line (as with #3-I), “675 sq ft” from the “J” line (as with #6J), and “550 sq ft” from the “H: line (as with #7H). Unless the 3-unit-combo also acquired former hallway space, the recent sale at $1.85mm comes to $831/ft.

Comping this space is complicated by this sobering bit of broker babble:

in its Original old condition and need complete renovation

lots of small space sales
In the time between #2HIJ came to market in April 2010 and when it closed a few weeks ago, 10 lofts sold in the building, at prices per foot ranging from $814/ft to $1,398/ft.

#6F Aug 17, 2011 $700,000 $933/ft private sale
#1A July 7 $580,000 $967/ft renovated
#2N June 10 $662,500 $828/ft private sale
#3L June 1 $566,500 $871/ft no bragging
#8G May 17 $769,003 $1,398/ft renovated
#6B April 7 $750,000 $1,111/ft lofted BR
#3B Mar 3 $550,000 $814/ft no bragging
#3-I Dec 8, 2010 $1.07mm $1,070/ft renovated
#2G June 24 $655,000 $1,191/ft private sale renovated
#3N June 3 $750,000 $937/ft renovated

(Notes: #6F sold to the neighbor in #6G in a private sale; #2N and #2G are other private sales; #6B has an extensive renovation including substantial lofted space; and where no size is given on StreetEasy I used the size of another from that line to calculate $/ft, from StreetEasy or for our data-base; the old #2G listing has a full description)

no science, a bit of art
It is not easy to extrapolate from these sales to assess whether there is an evident combination premium in the need-to-gut #2HIJ at $831/ft.

On the one hand, it is similar in value to #3B but lower than #3L, neither of which claimed a renovation or bragged about the finishes, but in neither case was there a warning of Gut Job Ahead. On the other hand, #2HIJ at $831/ft is well below the small lofts sold with some bragging about renovation, but those values are all over the map.

Assuming a ballpark of $200/ft for a gut renovation of #2HIJ, the adjusted market value of $1,031/ft is higher than #1A ($967/ft) and #3N ($937/ft) but still lower than #8G ($1,398/ft), #6B ($1,111/ft), and #2G ($1,191/ft). Increase that hypothetical renovation investment to $300/ft, and the #2HIJ adjusted market value is still less than #8G and #2G and just a tad higher than #6B, a loft that was sold without any bragging about its finishes.

1+1+1=???
Net-net: if there was any market premium paid for #2HIJ because it is a large combination, I can’t find it. The wide spread in values of the 10 smaller lofts sold suggests that there are things about this building that I don’t know (and have not taken the time to learn, including which measurements are right ... if any), but that spread makes it very difficult to comp out #2HIJ.


Net-net-net: whether these sellers over-valued the loft combo because it is a combo, or whether they just over-valued it, they did over-value it: it took 19 months to close at a 30% discount to first ask. You do hate to see that happen.

© Sandy Mattingly 2011

 

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Aug. 3, 2011 - more man-on-dog action as 21 Astor Place loft sells up 3% since Peak


only $50,000, but still
I hit a Bright Shiny Object last weekend, a man-bites-dog story last month, and a sale at 21 Astor Place the month before that. Today’s feature is the sale of the “1,304 sq ft” Manhattan loft #6F at 21 Astor Place on July 1 for $1.9mm, as it is a (weak) trifecta: a Bright Shiny Object for being a statistical outlier; a man-bites-dog item because it sold last June 11, 2008 at $.85mm (all man-bites-dog sales are BSOs at heart); and a 21 Astor Place sale because … well, I am not going to explain that further.

Every number tells a story:

  • Jan 15, 2004 $1.025mm
  • May 13, 2004 $1.365mm
  • June 11, 2008 $1.85mm
  • July 1, 2011 $1.9mm

Treat the early history as deep background: gal buys from sponsor and flips in four months to earn a big tax bill (non-capital gains); married gal times a resale nearly perfectly to earn a 36% return. It was that near-Peak-buyer-turned-2011-seller who did not get the memo, and did not care. Having paid $1.85mm very close to The Peak, she nonetheless offered the loft for sale on November 30 at $1.995mm. Still refusing to read the memo, she held firm there until her April 1 contract at $1.9mm.

why would a buyer do that?
Most buyers have read the memo, so would look askance at an ask with a premium to a June 2008 sale. Especially when the same unit, two floors down but “sun-flooded”, did not sell from December 2009 into September 2010 at $1.75mm and $1.699mm. But this buyer made the deal for #6F.

Sometimes a buyer just have to have what a buyer just has to have, and will over-pay if there is no other way to get the owner to agree to sell.

Do you have a better explanation?

that other BSO
If you have been having short-term memory issues and are curious about that other Bright Shiny Object from last weekend, that was my July 30, why did 263 Ninth Avenue loft resale kick some serious butt?, which told the tale of a resale with a significant premium over a two-years-before-Peak sale, but which is not a trend:

the “2,124 sq ft” Manhattan loft #6C at 263 Ninth Avenue, which sold with a storage room on July 18 for $2.81mm. It sparkles because it was purchased on January 10, 2006 for $2,036,500 (the storage room cost $22,800), for a gain of three quarters of a million bucks, or 36%. That is a lot of sparkle, sparkle that looks even better on reflection.


But this one sale is just one data point. (D’oh!) Trend seekers will have to contend with the fact that the other two Heywood resales in 2011 did not sparkle. At all.


that other 21 AP
You don’t need a short-term memory excuse if you don’t remember my June 11, 21 Astor Place loft sells up 21% in 2 years. That was also a BSO, though I did not call it that; I just could not explain the gain:

Let’s just say that the price is a little difficult to rationalize within other building sales. The “2,042 sq ft” duplex loft “raises the bar for luxurious style and design”, has “an elaborate designer staircase and a one-of-a-kind arched window”, but it did sell in April 2009 at only $3,225,000 (and in March 2004 at $1,756,451).


In contrast to #7F at $1,917/ft (and at $1,579/ft two years ago), the “3,000 sq ft” #9C sold on August 21, 2009 at $3.55mm ($1,183/ft). Granted, that babble is not quite as enthusiastic as that of #7F and the sale suffered from being over-priced in a nuclear winter, but but but …. But #7F also last sold in a bit of a chill. But when #7F was selling at $860/ft in the initial offering in 2004, #9C was selling at $1,018/ft ($3,054,750).


The genius here is not making the “exclusive upgrades” to #7F, as the original buyer did those. The genius here would make old Fred proud: buy low, sell high. (Don't ask me what The Donald might think.)


and that toothy man
In my July 5, man bites dog! 49 East 21 Street loft sells 3.6% above Peak, I hit another recent sale at a small premium to a Peak sale:

But today’s news really is news: the Manhattan loft #4A at 49 East 21 Street recently sold for $1.85mm, after selling on January 24, 2008 (nearly as peak as peak can be) for $1.795mm. A modest gain of 3.6%, but in this sentence gain is a much more important word than modest.


Bright Shiny Objects such as these, will undoubtedly catch my eye in the future (as they are bright and shiny), so you can expect to hear about them until a from-Peak-premium is no longer an outlier and trends toward Trend.

© Sandy Mattingly 2011
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Jun. 11, 2011 - 21 Astor Place loft sells up 21% in 2 years


smarter than he looks?
When the Manhattan loft #7F at 21 Astor Place sold on May 17 for $3,915,000 it made big news not because it found a contract within 6 weeks or had been bought 25 months earlier at $3,225,000, but because of who the seller is (and who his bombastic father-in-law is). It is a rainy (not quite, technically) summer weekend; I will let you figure that part out and will hit this sale briefly, as a wet weekend’s diversion.

was it the brand (without the name) or the exclusive upgrades?
Let’s just say that the price is a little difficult to rationalize within other building sales. The “2,042 sq ft” duplex loft “raises the bar for luxurious style and design”, has “an elaborate designer staircase and a one-of-a-kind arched window”, but it did sell in April 2009 at only $3,225,000 (and in March 2004 at $1,756,451).

In contrast to #7F at $1,917/ft (and at $1,579/ft two years ago), the “3,000 sq ft” #9C sold on August 21, 2009 at $3.55mm ($1,183/ft). Granted, that babble is not quite as enthusiastic as that of #7F and the sale suffered from being over-priced in a nuclear winter, but but but …. But #7F also last sold in a bit of a chill. But when #7F was selling at $860/ft in the initial offering in 2004, #9C was selling at $1,018/ft ($3,054,750).

The genius here is not making the “exclusive upgrades” to #7F, as the original buyer did those. The genius here would make old Fred proud: buy low, sell high. (Don't ask me what The Donald might think.)

Those must be some exclusive upgrades in #7F! At least I hope so, because the celebrity factor caused them to over-pay, that money is gone, and it is not coming back.

© Sandy Mattingly 2011

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May. 31, 2011 - 808 Broadway penthouse loft lost 15% of value since 2007


dramatically different dynamics result in regression
When the duplex Manhattan loft with private roof deck #PH-C at 808 Broadway sold on October 1, 2007 it was the belle of its ball, sparking a bidding war to close at $1,987,000, a 5% premium. Of course, that was very close to The Peak. When it re-sold on May 19 it was a different story, clearing at $1,695,000 after taking nearly 3 months to find that contract off an asking price of $1,795,000. Put this one in the folder marked “The Market is down about 15% since The Peak”.

layout challenges
The “1,400 sq ft” layout obviously counts the two levels of master “bedroom” stacked over the kitchen, taking advantage of what elsewhere in the loft are 14 foot ceilings. The “bedroom” is open to below; otherwise it would not only not have a window but would feel very cramped with 7 foot ceilings. (The kitchen below opens into the 14 foot living area, so avoids that particular problem.)

Consider the privacy challenges posed by this open master “bedroom”, challenges that are much less (well) challenging when that interior room downstairs is used as a nursery than when it is (eventually) inhabited by someone who does not sleep on an infant’s schedule. Now consider the fact that no grown-ups can go to sleep while there are guests on the terrace, because of access to the lovely terrace.

I wonder if the sellers moved out in less than 4 years when (because??) the inhabitant of the “nursery” no longer slept like a baby. They did last longer here than their sellers, however.

and down a hair since 2005
The 2007 sellers who caught The Peak were owners for even a shorter period, having bought in December 2005. (That is this record on StreetEasy, but the square footage numbers are clearly in error.) Those 2007-sellers-and-2005-buyers got the benefit of the frothy market in their short tenure (though they likely just plowed it in to another property under similar frothy conditions), having paid $1,715,000 on December 8, 2005.

Without the distraction of the intervening sale, from December 2005 to May 2011 this penthouse loft was essentially treading water, trading down at a trivial 1.2%.

a bear move?
The notice address for the Penthouse C sellers is a loft just a few blocks south and a little east, which they are apparently renting (listing is here). They traded ownership of “1,400 [rather awkward] sq ft” with a terrace for a real 2-bedroom loft of “1,603 sq ft” (I don’t believe the figure quoted in the rental listing; the floor plan is on an earlier rental listing, here.) Aside from the lifestyle trade to more interior space, much more conventionally laid out, but with the loss of the entertainment value of the terrace, I wonder if these sellers-to-renters are waiting out the sales market.

Even if they are paying the full ask for the rental ($8,995/mo), their direct cash housing costs are probably lower than at The Renwick, where their maintenance was $2,917/mo. I can’t find any record of a mortgage from the former penthouse (probably because city records seem to have a lot of trouble with condop information, and The Renwick is a true condop, rather than because they did not have a mortgage), but I would expect that they were paying at least $6,000/mo on a mortgage for what they paid $1,987,000 in October 2007.

While speculating about this stuff is interesting, there’s not enough factual fodder to make it very interesting. So I will stop. (You’re welcome!)

© Sandy Mattingly 2011

 

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May. 24, 2011 - dream renovation adds 50% to 39 East 12 Street loft


if you build it …
The petite Manhattan loft #307 at 39 East 12 Street (University Mews) traded four years ago as a build-your-dream loft for $850,000 then again (dream realized!) on May 10 at $1.25mm. I suspect that the dream cost less than $400,000 to build (the space is only “1,000 sq ft”), just as I suspect that the $850,000 sale in May 2007 was an on-the-way-to-Peak price. At least, for the sake of the renovator-turned-seller, I certainly hope that the renovation cost much less than $400,000, as he got to enjoy it for less than 4 years.

loft porn, of the best kind
Feast your eyes on the listing pix (definitely get the larger photos by clicking the “+”), as there is little doubt that the broker babble is true: “[h]igh-end finishes cover every inch of this space”. I generally am not a fan of raised platform areas (though I get it that they create different spatial relations), but I see nothing to quibble with in the design or execution. (Well, just one: that bathroom is too much foreverevreverever for me, but clearly high-end.)

The walnut cabinets and “pod bedroom” are lovely, and the pod is a great solution here that provides privacy for the bed while providing the maximum sense of space with the high ceilings and light from the windows. This pod does not seem like a gimmick, unlike in a 2007 new development we could name.

Net-net: simply stunning. The marketing campaign was quick and to the point: to market to January 13, in contract at the full ask by February 17. Given recent sales in the same line, asking $1.25mm showed confidence that The Market would appreciate the quality of the dream renovation, and The Market did not disappoint.

adjusting for condition (and size??)
The most recent loft sale in the building would definitely need a size adjustment for comp purposes. The “700 sq ft” Manhattan loft #303 sold on April 21 for $667,000, after another brag-worthy renovation (“thoughtfully crafted with the finest materials”). By using the high ceiling to add a sleeping loft “bedroom”, #303 has a similar functionality to #307, in high (but different) style, at a very different price point. Again, I am curious about renovation costs, as that one also sold un-renovated in 2007 (at $598,000).

Our data base has #407 at “950 sq ft” and #607 at “1,100 sq ft”, though they were both marketed as “900 sq ft”, but I can’t see any differences in size between those two or #307 (supposedly, “1,000 sq ft”). Loft #407 sold on September 23 at $965,000; #607 on August 5 at $1.1mm. Obviously, they were in different condition. #407 boasted of new floors and renovated kitchen and bath, but not in terms that would approach mint-y-ness (“delicate blend of industrial loft and rustic home”); #607 was much more enthusiastically babbled, on a par with the detail and enthusiasm as with #307.

The Market noted the different conditions of #407 and #607, valuing them $135,000 apart. Later, The Market found #307 to be of even higher quality than #607 (or, at least, generated a buyer who would match the higher price for #307).

Those clearing prices (assuming all three “x07” lofts are the same size; here using 900 sq ft):

May 10 #307 $1,389/ft
April 21 #303 $953/ft
Sept 23 #407 $1,072/ft
Aug 5 #607 $1,222/ft

Based on the listing descriptions and photos, #407 was not quite as well dressed as #303, while #607 is of higher quality, and #307 at the top of the heap. The “x07” loft clearing prices line up appropriately. Arguably, the architectural renovation of #307 was 14% more valuable than the architectural renovation of #607. That was a very valuable renovation.

about that raised platform I (generally) don’t like
Recall my comment about the #307 design, specifically the raised dining platform. Here is why that works in this footprint: even #607 with a high-end renovation and a conventional layout ends up with a main room visible on entry that is about 45 feet long but only 12 feet wide (i.e., a bowling alley effect). In contrast, that first walnut built-in and raised platform in #307 break up the space and the view, so that by the time you see the (broader set of) windows, the room proportions are much more comfortable.

A nice solution, indeed. Well played, architect (and seller).

pet peeve about agent price changes
Avert your eyes to avoid a rant.... I have moaned before about agents who change the asking price after a deal is reached so that the listing history shows a full price deal, or a smaller discount than reality imposed. Of course, I still have no direct information about whether these changes are by ‘mistake’ or not, but note that both #407 and #607 show price changes a day or two after the closings, reducing the asking prices to exactly the closing prices. Sloppy work? Coincidences? A cynic would wonder why the inter-firm data-base permits a post-contract asking price change, let alone a post-closing change.

© Sandy Mattingly 2011

 

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May. 23, 2011 - 111 Fourth Avenue lofted loft gains 12% since 2007 sale


if you build it (up), they will come
Offhand, I can’t recall a more bullish Manhattan loft resale than that of  #6B at 111 Fourth Avenue, which closed on April 7 at $750,000 after having been purchased on October 27, 2007 at $670,000. If you, too, have one of those special “apps”, you, too, figured out that is a 12% gain from pretty darn close to The Peak. And, yes, the loft was in the same condition (fully built out, with a then-newly-renovated bathroom) in 2007 as now.

vertical living in a tall box
Typical of lofts at 111 Fourth Avenue, #6B has a relatively small footprint but with ceiling heights that offer ways to build space by moving up. In this case, there is an office and bedroom added on top of the kitchen and lower bedroom. People of average height fit up there, though with ceilings 6’ 2” they may flinch a lot. Downstairs, giants can roam (or, people who can fit under 6’ 6” ceilings), though they may feel more comfortable in the “double height” living room. (The living room is taller than it is wide.)

The layout is not ideal for a lot of people, but it is an extremely efficient and cost-effective way to get a room for a kid or two, and an adult sleep loft up on top. If the room dimensions are credible, the footprint is only 20 x 25 feet, yet there must be a sense of space in that living room, with the big windows. (No view, however, as you will see if you look closely at the living room picture.)

comping is, of course, hard
Props to the seller and agent (no offense, but I’ve never heard of ROOM Real Estate) for playing a quick game of bingo with The Market, coming out on December 2 and getting that full price deal by January 25, in an environment that might have posed some challenges.

When #6B came out, #3B was awaiting closing at only $550,000. That one has taller ceilings (16 feet) but a loft that is not as big as in #6B. It appears in much more primitive condition, but there’s a huge gap between #3B at $550,000 on March 3, and #6B at $750,000 on April 7. (That “app” can measure it for you.)

While #6B was out, #7B also came out for a short period, asking $695,000 from January 10 to February 22. That one claimed 14 foot ceilings, but was not as efficiently built out crammed to the gills as #6B, with only one sleep area.

Net-net, in comparison to its neighbors and to the froth of 4Q07, #6B is an impressive sale at $750,000.

today is a good day
… because I learned that 111 Fourth Avenue has a name: International Tailoring Company Building. I did not know that.

© Sandy Mattingly 2011
 

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May. 22, 2011 - 48 East 13 Street mint loft goes for $866/ft


is the (missing) 2nd bathroom so valuable?
I am having some trouble with the last two sales in the Manhattan loft building at 48 East 13 Street. The “2,250 sq ft” #9B sold on October 27 for $2.85mm, but the “1,500 sq ft” #4A only got $1.3mm on April 8. (Scratches head.) Both were marketed more on bones than finishes, with an “open chef’s kitchen” in each. Ceilings are said to be 12 feet on the 4th floor, 13 feet on the 9th floor. The smaller loft has 2 bedrooms, and a challenging layout for anyone interested in a third; the 9th floor has much greater flexibility, with 3 bedrooms plus a ‘bedroom / office’. One sold for $1,267/ft, the other for $866/ft. WTF??

Lest you think #4A is deficient in condition, it was babbled as “in mint condition”. Lest you think that it is permanently damaged for having only one bathroom, the prior listing claimed that “second bathroom can be installed easily”. WTF??

I don’t think I can conjure a rationale for a 46% premium for the larger loft on a $/ft basis, but there may be a layout-based reason for some (small!) difference in value.

riddle me this history, if you can
Perhaps the #4A sellers were seduced by the success of #9B:

June 11, 2010 #9B   new to market $3.15mm
July 27 #9B   contract  
Oct 6   #4A new to market $1.595mm
Oct 27 #9B   sold $2.85mm
Nov 10   #4A   $1.495mm
Dec 8   #4A hiatus  
Dec 16   #4A change firms $1.395mm
Feb 14, 2011   #4A contract  
April 8   #4A sold $1.3mm

If so, that seduction was premised on a real sale. A real sale of a larger loft on a higher floor, but a real sale nonetheless. The #4A sellers allowed an adjustment for the difference in floor height, asking $1,063/ft in early October instead of the $1,267/ft that #9B had already been in contract for for 10 weeks by then.

The Market did not think that adjustment was enough, obviously.

a blocking issue?
As I said, the layout of #4A may be sufficiently light-challenged in real life to account for some of the spread between #9B and #4A, but I can’t see a 46% difference. Note that #9B has three exposures and 17 windows on the top floor, and note the building photo featured in the #4A listing: the long east exposure on the top floor (with 7 windows) is open. The #4A floor plan, in contrast, has only east and west windows, on a floor that has buildings directly abutting both east and west, at least at the north face of the building.


Presumably, #4A is set back from the north face of the building, as the windows are not directly bocked in the photos. However, the windows are curiously high off the floor in the living room and dining area photos (just clearing the rooftop next door?). Is that a ventilation duct right outside the dining room window?

Whatever the reason (scratches head), The Market valued these two lofts extremely differently. Go figure.

© Sandy Mattingly 2011

 

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May. 16, 2011 - 28 East 4 Street loft closes up 9% over 2006, at 5% discount to ask


what took so long?
Can we agree (just between us) that a Manhattan loft that sells at a 5% discount from first listing price has been priced right? Can we also agree that a Manhattan loft that has not sold or reduced its price in 4 months is probably over-priced?

I had to insert that weasely “probably” because the Manhattan loft #5W at 28 East 4 Street closed on April 29 at $1.8mm off an asking price of $1.895mm but it took that (obviously right!) asking price from September 30 to the February 14 contract to work its magic. Weird set of circumstances, as I’d be tempted to call those sellers “stubborn” for holding to the original asking price so long, and the market “thin” for taking that long to hit the right price.

I don’t know anything about these sellers, of course, but I do not consider the recent sales volume as indicative of a thin market. Weird.

The fact that the recent sale was at a 9% premium to the prior sale on March 20, 2006 at $1.65mm is not weird. To the contrary, that spread going back 5 years seems within a normal range of 2006-to-2011 resales. (Manhattan Loft Guy note to self: check that supposition … some day.)

no change in plan, just palette, but no huge profit, either
What do you think of the brown walls in the living room? They look pretty dramatic to me, and I had to closely parse the before-and-after (2006 vs. 2010) photos to see that the loft is in essentially the same condition in the recent sale as it had been when these sellers bought it 5 years ago. Floor plan is exactly the same; some light fixtures have been switched, but the formerly blonde-on-blonde mix of light finish on the floors, light neutrals on the walls throughout (from 2006) was changed (only in the living room?) from neutral walls to brown. Make that: brown!

I am surprised at how much I prefer the ‘pop’ of the brown to the former (classic) color scheme. Not that this simple change generated a huge return (as seems to be the case with the penthouse-with-fresh-paint that I hit on May 13, 43 West 21 Street penthouse loft dresses up (a little) to close up (a lot: $1.1 million) since 2007), but it does look nice.

© Sandy Mattingly 2011
 

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May. 8, 2011 - The Market corrects a Cast Iron loft over-correction, as 67 East 11 Street loft sells above (reduced) ask


Aphorisms ‘R Us
Stop me if you have heard this before: if a seller sets a price that is ‘too low’ The Market has an opportunity to fix that price. When the little (“710 sq ft”) Manhattan loft #411 at 67 East 11 Street (the Cast Iron Building) sold on April 14 at $651,680, that principle was demonstrated (again):

Oct 20, 2010 new to market $710,000
Nov 5    $630,000
Nov 30 contract  
April 14, 2011 sold $651,680

How is that for a compressed time-frame? A significant price drop two weeks after coming to market, followed by a contract within 4 weeks at a modest premium to the then-ask. The seller gave it a shot at $1,000/ft but realized The Market would not offer that (adjusting for outdoor space, nothing in this building sells at that level). Biting the bullet by 11% tastes a little better when The Market deems that an over-correction.

You have to go back almost a year to find a public sale at 67 East 11 Street that did not involve outdoor space:

    closed at interior sq ft exterior sq ft
Mar 17, 2011 #711 $760,000 “750” “350”
Jan 11 #704 $705,000 "750" “300”
Nov 8, 2010 #702 $995,000 “1,150” 300+
June 10 #409 $575,311 “683” 0
April 29 #502 $725,000 “1,000” 0
April 13 #524 $515,000 “650” 0
Feb 5 #210 $610,000 “713” 0

do your own darn math
I am not goign [oops, or to proofread, apparently] going to bother to do much math here, either to calculate the precise $/ft of these sales or to try to make an adjustment for the outdoor space on the 3 top-floor sales, as it is obvious (to me, at least) that the $918/ft achieved for #411 four weeks ago is a higher $/ft value for interior space than any public sale in the Cast Iron Building going back through 2010.

to repeat (again!)
Seller wanted more. Seller did not get more. Seller over-corrected. Market fixed that.

It is nice when it works.

Poster Children ‘R Us
If #411 is a Manhattan Loft Guy poster child for The Market Corrects Low Prices (Sometimes), it is the second poster child here recently. I hit that #711 sale on April 14 as a poster child with the caption “into (and out of) The Peak” (market changes, personified by 67 East 11 Street loft sale). I also used that #704 sale to bash Old Media in a post on April 3 when it (finally!) showed up in a New York Times feature.

© Sandy Mattingly 2011

 

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May. 3, 2011 - how much were those roof terraces worth when 211 East 2nd Street loft sold?


probably $400,000 (but let’s see the math)
When the Manhattan loft on the top of 211 East 2nd Street sold on March 15 at $2,122,500 (the last 6th floor / penthouse listing is here, but the prior one with surviving pictures is here) the premium factors included “360 degree views of the city and ... two spacious terraces for a total of 1,640 square feet”. Of course I wonder how much of that market value is due to the two terraces, and how much is due to the “1,860 sq ft” interior.

way high for way east
The building is a former carriage house at the far corner of Avenue B. To say it was a successful development is an understatement: three units sold in January 2008 (#4 and #2 as resales, #5 as a sponsor sale) at an average of $1,168/ft; the highest being the 5th floor sponsor sale at $1,283/ft. That Peak history is a rich platform from which to consider how to allocate the penthouse market value on March 15 between interior and exterior space. (I choose to ignore the September 2009 sale of the small unit on the 3rd floor as a nuclear winter price of $747/ft.)

In contrast to 11 foot ceilings on the lower floors, the duplex penthouse claims only 9 foot ceilings (not as dramatic a difference as at 99 Reade Street [see my April 30, 99 Reade Street and the value of low-ceilinged lofts in Manhattan], but probably a significant difference). On the other hand, the 6th floor has (somewhat) better views than the lower floors … and those terraces on two levels. Let’s play with the numbers a bit (oh boy!):

average, post-Peaked
You could make an argument for using the average of the three January 2008 sales as your baseline for comping in the building, or simply use the 5th floor as the closest-to-the-6th-floor unit. I prefer the average of $1,168/ft for the 3 sales, as there is a significant spread between the 5th and 4th floor units ($1,280/ft vs. $1,111/ft), but your mileage may vary. And I prefer to take a 20% haircut for a Peak-to-now adjustment, but you might go as high as 30%. Using 80% of the average Peak value, the “1,860 sq ft” of interior space for the penthouse should be worth about $1.74mm, or $934/ft.

the remainder is outside
That baseline would leave nearly $400,000 in value attributable to the two terraces that total “1,640 sq ft”, or just under $250/ft. What makes me happy about that result (after the pushing and pulling to get there) is that it is right around 25% of the value of the interior space on a per-foot basis. From riffing with The Miller on the value of outdoor space, that 25% is a comfortable result, taking into account that this space is disproportionately large compared to the indoor space (a negative for value) yet is directly accessible from the interior in both levels. Again, your mileage may vary as you apply some of The Miller’s rubrics from that May 6, 2010 post, but 25% has a nice round number appeal to it.

fun fact (that you will have to dig for)
One of the lofts below is owned by a multi-platform celeb, but will have to do some clicking to find out who. Avenue B at Second Street must be more chic than I realize.

© Sandy Mattingly 2011

 

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Apr. 14, 2011 - market changes, personified by 67 East 11 Street loft sale


a warm welcome for another poster child, please!
When the Manhattan loft #711 at 67 East 11 Street (the Cast Iron Building) sold on March 17 for $760,000 to earned Manhattan Loft Guy poster child status, with a caption “into (and out of) The Peak.” The loft has sold twice before, each time in very different market conditions than the present, and very different conditions from each other:

  • Sept 10, 2004 $645,000
  • Nov 20, 2006 $875,000
  • Mar 17, 2011 $760,000

The ranges are similar to the poles for resales of the loft I profiled on April 9 in 60 Thomas sells +21%, but that’s above 2004 purchase, which only had 2004 and 2011 sales, netting that 2004-buyer-turned-2011-seller a 21% gain. This 2006-buyer-turned-2011-seller at the Cast Iron Building lost 13%, but the loft itself (if you can think in those terms) was up 18% from 2004 to 2011.

a true duplex, not lofted
Unlike some units in this building that take advantage of tall ceilings to market a lofted sleeping area as a “bedroom”, #711 has a real bedroom, up a real flight of stairs. Indeed, the bedroom is on the roof, creating (along with a private roof deck) a true penthouse.

I tend to doubt that the contract was signed within a week of the closing, so it is hard to say quite how quickly the #711 marketing campaign worked. It started on October 16 at $799,000, so the bargaining could not have been too difficult to close at a 5% discount 5 months later in a coop.

Loft #711 is probably larger than a similar “penthouse” loft that sold on January 11 at $705,000 (#704 has significantly lower maintenance, smaller room dimensions, and smaller outdoor space), so these two recent top floor duplexes are probably very similar in price-per-foot values. Perhaps this pair is yet another hint of an occasionally efficient market (as in my April 11 post, 80 Chambers Street loft takes a year to go from $3.5mm to $2.75mm in an efficient (gasp!) micro-market).

Another Manhattan Loft Guy poster child is crowned!

© Sandy Mattingly 2011
 

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Apr. 6, 2011 - why did Carl Fischer loft re-sell at 62 Cooper Square for +21% over 2008?


do my questions suggest I am getting dumber?
I can’t say that I really enjoy taking note of things that happen in the Manhattan real estate market that I don’t understand, but they do interest me. I hit one such interesting (weird) thing yesterday, wondering, first, how a guitar player got a designer to over-pay for a loft by changing its skin, and second, whether that guitar player over-paid in the not-very-long-ago first place. That was my April 5, 79 East 2 Street lost sells +57% in 19 months with same floor plan, different skin, of course.

I had already put aside the sale of the Manhattan loft #9C at 62 Cooper Square (Carl Fischer Building) as worthy a post sometime soon, when I went back to that sale today to add it to the list of data points in an update of yesterday’s post. My primary interest in the Carl Fischer loft is that it sold on March 10 at a premium of 21.3% over its prior sale on September 16, 2008 (the day after Lehman filed for bankruptcy, and just 2 quarters past The Peak). It is also the 4th highest dollar-per-foot recorded for a downtown loft so far in 2011 (as suggested in yestereday's post), just beating out the Coldplay guy's loft that sold to a hotshot designer.

It turns out that there is one simple, if partial, explanation for a significant Peak-to-now gain, taken directly from the broker babble:

It was recently renovated and is finished with mahogany wood wall panels, kitchen cabinetry and storage. It has a custom Gourmet kitchen, beautifully finished master bath and powder room.

from white box to renovated, 2008 to 2011, at +21%
When this “1,452 sq ft” loft sold when Lehman fell in 2008, it had been doing something unusual: (in retrospect) flying against the strongest and deepest residential real estate market Manhattan had ever seen. It came to market at $2.6mm in April 2007, dropped twice (ending at $2.2mm), and went into contract on April 28, 2008 at $1.9mm.

Look at that again: it came out in 2007 (a year in which 35% more coops and condos were sold in Manhattan than any other year, before or since) but was well over-priced; it took two price drops totalling 15% and then a negotiated discount of another 14% to get that contract within weeks of The Peak for closings. (For some reason, it took 5 months to close, but with an April 2008 contract, it was really, really, really close to The Peak.)

That Peak price of $1,308/ft for #9C is hard to assess within the Carl Fischer building because there were no other sales in this small (26-unit) building between the “3,073 sq ft” #6B on March 30, 2007 at $4.6mm ($1,496/ft) and the October 7, 2009 sale of “2,548 sq ft” #5A at $3.125mm ($1,226/ft). Both of those lofts were in prime shape, with renovations of the no-detail-overlooked+high-end-finishes variety, but to me $1,308/ft for #9C without any interior walls seems like a pretty strong price, even at Peak.

either that was some renovation, or ...
From that Peak sale of $1.9mm the recent renovation generated a sale of $2.305mm. Comparing then-and-now pictures of the two listings, it appears that a hardwood floor replaced that shiny (stone?) flooring, the old kitchen and bath wall became 2 larger baths along the wall with the kitchen extending from them into the space, and then the place was otherwise simply built out. Not built out simply, as the build-out looks quite luxurious, but the rest of the renovation was adding lighting and custom storage and the like.

Might it have been a $400,000 renovation (at $275/ft)? Maybe, but that would take the cost+renovation just up to the current value, without adjustment for different market conditions, Peak and now. If the 2008 buyer-turned-renovator added $400,000 in 2008 value by renovating, that value should still be subject to some adjustment for Peak-then to off-now.

If the renovation both cost and was worth a whole lot more than $400,000, the gap between 2008 purchase price of $1.9mm and 2011 purchase price of $2.305mm begins to narrow. But only begins to narrow. If a relatively extravagant renovation budget of $600,000 ($413/ft) was both used and justified, that would imply a fall-from-peak only under 10%. If The Market is efficient, or rational.

This dithering with numbers is a long (inelegant) way of saying I have a great deal of trouble accounting for the recent sale price of $2.305mm. Perhaps the renovation was a true game-changer, one that added enough value to change the category for relevant comps. But it is still a 1-bedroom layout; at “1,452 sq ft” a large 1-bedroom, but still just a 1-bedroom.

confusion reigns in my brains, again
For the second day in a row, I cannot account for the clearing price of this loft. At $1,587/ft, it dwarfs the 2008 sale (if 21.3% does not feel like a dwarf to you, remember that the first leg was put down at The Peak). At $1,587/ft in 2011, it beats even the $1,496/ft of #6B a year before The Peak (in March 2007), with its museum-featured, “flawless”, “perfect marriage of urban cool and industrial chic” renovation.

The more I know about recent Manhattan loft sales, the more questions I have. Sigh.

© Sandy Mattingly 2011

 

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Apr. 5, 2011 - 79 East 2 Street loft sells +57% in 19 months with same floor plan, different skin


selling design to a designer, dearly
The Manhattan loft on the 3rd floor at 79 East 2 Street got a lot of press last week because of the celebrity buyer and celebrity seller, as well as because of the spread the seller got between buying this “2,681 sq ft” loft in July 2009 and selling within 2 years. It is very difficult to get good loft comps in this part of the East Village, so any loft that sells twice in two years almost has only itself to look at. In this case, it proved to be a poor comp for itself, in the sense that the 2009 sale cannot rationally support the 2011 sale.

The irony (to Manhattan Loft Guy, at least) is that the loft that sold for $2.65mm on July 16, 2009 has the exact same floor plan as when it re-sold on March 14 for $4.15mm, though it has been dressed up a bit differently, and that a designer paid a premium because a guitar player dressed it up.

The loft was in beautiful condition when purchased by the bass player not quite two years ago, but that was a very different market. Stop me if you’ve heard this before … the whole post-Lehman nuclear winter was still in force in the overall market when the 3rd floor came to market on May 6, 2009 at $3.1mm, and a quick drop to $2.999mm helped generate a contract by June 15 at $2.65mm. Not many lofts were selling that quickly in the second quarter, or even at all.

Because it is hard to get comps on large beautiful lofts in the East Village, it is hard to put that sale in context other than to say that many lofts throughout Manhattan that sold in early 2009 did not match the $988/ft garnered by this one, and that most took far longer than 39 days to find a contract. (Of course, you can check the Master List of Manhattan Lofts Sold Since November 2008 for details on downtown loft closings around this time.) At that time, most of the brick walls were sheet-rocked and the chef’s kitchen featured a 6-burner commercial Garland cook-top with double oven. When re-sold last month, the brick had largely been exposed and the chef can now work with a 6-burner professional Wolf cook-top with double oven, with new cabinetry and possibly a new “farmhouse” kitchen sink. It is hard to say from the pix and babble, but there may be new wide-plank flooring (certainly, the floor finishes have been changed, at least).

If other things were “renovated” since 2009, it is hard to tell from comparing the pix and descriptions and there is no discernible difference in the two floor plans. In between sales, the skin was new (brick exposed throughout, floor colors changed. kitchen cabinetry replaced), but the structure stayed the same. Yet the ‘new’ space was valued at $4.15mm, or $1,548/ft. In a no-frills 4-unit condominium converted in 1997 in a non-prime loft neighborhood. That is a 57% appreciation in under two years.

hard to comp out this price anywhere
Again, you can check Master List of Manhattan Lofts Sold Since November 2008 for details, but the only downtown lofts I see that have sold this year above the 3rd floor’s $1,548/ft are in newer high-amenity buildings and/or are in prime neighborhoods (as opposed to being across the street from the explosive cemetery, or on the next bock down from the Angels). None exhibited the velocity of change in sale from 2009 to 2011 that the 3rd floor experienced.

  • 99 Jane Street #4C (up 7.5% since July 2007)
  • 7 Hubert Street #4A [Hubert] (down 10% since September 2004)
  • 542 LaGuardia Place #5B (up 66%, but since 2003)
  • 101 Warren Street #1510 (down 2.3% since November 2008)
  • 62 Cooper Square #9C [Carl Fischer] (up 31% since 2008) (added April 6, when I corrected the size)

Loft fans (or music fans) would say the sale of the 3rd floor at 79 East 2nd Street is extraordinary. I bet an appraiser would say it is unjustifiable.

the feet grew
In both sets of broker babble, the 3rd floor is listed as “3,000 sq ft” (well, in the last one it was “nearly 3,000 sq ft”). I don’t know where those numbers come from. The StreetEasy closing records both say “2,681 sq ft” (March 14, 2011 here, July 16, 2009 here), as does Property Shark. No surprise that this number is also the number used for “square footage” in Schedule C of the condo declaration (captured from ACRIS at page 21 of 54 here). Sigh.

the chatter
Curbed and The Observer both hit this sale on March 31, the day the deed was filed; the next day it got re-circulated on NearSay. All of these hits mentioned the celebrities on both sides, and the scale of the resale gain.

© Sandy Mattingly 2011
 

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Dec. 29, 2010 - 2005 white box loft conversion 835 Broadway sells with walls +50%


well, not quite 50% and not necessarily 835 Broadway
The Manhattan loft #2W at 835 Broadway is part of the 2005 condominium-from-rental loft conversion in “The 835 Broadway Condominium”, but for some reason agents market lofts there under an alternate address, 60 East 13 Street. Does “East 13 Street” have greater cachet than “Broadway”? Not to my Manhattan Loft Guy ears ….

When #2W was sold by the sponsor in May 2005 it was marketed as a luxury white box: beautiful stainless+granite kitchen, one bath, one laundry room and no other walls. The Condo Declaration and the listings claim “1,875 sq ft” in a classic Long-and-Narrow array: kitchen on one long side, laundry and bath opposite (with another stack available), with 3 windows in front and 4 in the rear and 2 valuable windows on the kitchen side, suitable for adding real bedrooms. In those heady days, the sponsor asked $1.3mm and the original buyer must have been on the hook for some sponsor closing costs (transfer taxes, most likely, as that is a 1.825% premium to the ask), with the recorded price of $1,323,725.

That original buyer put in the second (master) bath and a wet bar, and did enough carpentry for 3 bedrooms, creating the floor plan that was just sold (December 16; deed filed today!) for $1.975mm. That $650k spread is a gain of 49.2% for the anal among you, on a build-out budget that was probably closer to $100k than $200k. Nicely traded, no?

everything is relative, isn’t it?
Not as nicely traded as they wished, or (kinda, sorta) as their 4th floor neighbors got when they flipped out (so to speak) in July 2007.

The #2W sellers wanted to sell in April 2009 (yes, during the nuclear winter), then asking $2.495mm. They faced the 2009 headwinds until October last year, finally pulling off the market while asking $2.35mm. This loft is not one of those that can prove how much better the 2010 market has been than the chilly 2009 market (unlike in my December 21, ground floor loft at 7 Worth St proves how bad 2009 was), as it was simply over-priced then, and was over-priced when it came back to market on June 18, again at $2.35mm. The price drop to $2.195mm eventually did it, resulting in the $1.975mm contract sometime between the last open house (November 9) and the December 16 closing. That is $1,053/ft for what is claimed to be a deluxe build-out.

#2W is the second unit to flip in this seven-unit condo; the first was #4W, which re-sold (as I mentioned) in July 2007 with a very similar 3 bedroom + 2 bath floor plan, but which is a more typical Long-and-Narrow, with 2 bedrooms sharing the rear wall of windows and the 3rd bedroom behind the kitchen. The 2nd floor enjoys high ceilings (14 feet) but not nearly as high as the 4th floor (the top floor in the west side of this condo), which range from 15 to 19 feet, with two large skylights. The ‘extra’ height plus the top-floor skylights were a big premium in both the original offering and in the resale.

#4W sold for $1,663,057 in June 2005, a 25.6% premium over #2W originally. When it resold in July 2007 it took only 3 weeks to find a contract and enjoyed a bidding war (clearing price was $2.45mm, ask was $2.35mm; that is $1,306/ft). That resale spread between #4W in July 2007 and #2W two weeks ago was only 24.05%. Given the radically different markets for the two resales, it is surprising that the gap between the two resales is not larger.

looking back into a crystal ball: 2 hypotheses
I, for one, take this as evidence that the sponsor set the 4th premium too high in 2005. Since #4W did sell for $1,663,057 in June 2005 (i.e., the sponsor found a willing buyer at that price), it seems to me that this proves that the sponsor under-sold #2W in May 2005, getting only $1,323,725.

The contrary view would be that all this Gap Analysis proves only that the July 2007 market for this corner of Broadway at 13th Street was essentially the same as the current market. At least for a developer who was smart (or lucky) enough to get all units sold 2 to 3 quarters before The Peak.

Anyone else care to weigh in with an opinion on the market metaphysics: what does it all mean??

© Sandy Mattingly 2010

 

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Nov. 7, 2010 - another loft in New York Times, another inexpensive renovation, with 400 shoes


more shores shoes in basement storage!
Wasn’t it just the other day that I wondered whether the New York Times, in fact, disproportionately represented Manhattan lofts in living/design pieces, or whether I just happened to notice the instances in which it does due to being ... well ... Manhattan Loft Guy? (You say “yes” here; it was my November 4, that bento box loft in Noho also provides a Quote Of The Day, about a piece in the On Location feature in the Thursday Home & Garden section.)

Today’s example of Times love-of-lofts (confirmation bias at work??), from the Sunday Habitats feature in the real estate section, The Sanctuary of the 400 Shoes, provides yet another confirmation that one can do a lovely loft renovation in Manhattan for less than you’d think. That bento box of “1,300 sq ft” was under $200/ft; this shoe-closet-plus-”900 sq ft”-loft was about half that.

how much work did they do?
The attention of Constance Rosenblum and her Times editor were elsewhere, but it certainly seems as though there was a substantial renovation here, if not a full gut job. The accompanying slideshow shows what they have, but we have to make some educated guesses about what they started with, based on those slides and this general description:

When the couple discovered the place ... it was considerably less pristine. The oak floors were uneven, dotted with holes and speckled with ink, a reminder of the building’s days as a printing factory. The steps to the loft were so narrow, negotiating them took considerable guts.

***

Over a period of seven months, and after an outlay of about $100,000, the couple created a sleek, mostly open space filled with lively works of art and examples of Italian design

The kitchen is almost certainly completely new (in the same location as before, most likely). There are no photos of the bathroom, or any mention in the text, but what are the chances that this oh-so-chic-and-tidy couple with a Jetsons kitchen would not have put in a similar bathroom?

Let’s assume they did little structural work. Apart from replacing the narrow stairs to the lofted (low ceiling-ed) office / guest room, they probably had to add that featured shoe closet in the (tiny!) bedroom. And we have no idea if they had to upgrade any plumbing or electrical, or put in fancy stuff like in-wall sound or upgraded windows.

Tom Keller, call your editor
They say the loft is “900-square-foot” and that they “bought [it] for $840,000 in spring 2008 — ‘the peak of the market,’ [as one of the couple] noted gloomily”. Our data-base shows the llft is “840 sq ft”, but let’s take them at their word about the size. That means their renovation of “about $100,000” cost them about $110/ft. (About $120/ft if our data-base is correct about the size.) But I am not going to take their word for the purchase price or date, though the Times did, without checking public records.

They should not be “gloomy” about having bought at the top of the market, because they didn't. I guess memory plays tricks even on 37 year old minds, because city records have their deed as dated March 14, 2007, a good year before “the peak of the market”.

paging the Walt Disney children’s chorus
Yes, friends, it is a small loft world after all. I came ThisClose to linking to their March 2007 purchase when I was recently in the building, my October 26 what is your loft worth after a major FIRE? 12 East 12 Street loft goes for more than you’d think. (The Times already identified their building, though without the address, by naming the well-known restaurant there.) Their loft purchase in 2007 is the most recent in six figures in this building to the fire-gutted #7NE sale that I talked about in that Oct 26 post.

I ended up not linking to their sale then because of uncertainty about the size: while our data-base has it as 840 sq ft, Property Shark has it at “1,724 sq ft”. With the NY Times article and slideshow today, it is obvious that the lower figure is at least in the ballpark; my best guess is that this was probably originally a larger condo unit that got broken up at some point since it was converted to condos in 1984, but the city measurements have not caught up to that change.

no need for gloom
As I mentioned, this oh-so-chic-and-tidy couple bought in March 2007, so they did not pay a Peak price. Based just on general market trends, their current value is likely to be more or less what they paid for it. Depending on the actual size of that burned out loft upstairs, it might be worth a good bit more.

City records (per Property Shark) show that fire-gutted unit (#7NE) as “1,200 sq ft” but our data-base shows “900 sq ft”. #7NE sold on September 24 as a total gut job, after having sold (pre-fire) at The Peak in April 2008 for $999,000. I’d say that #7NE is more likely to be “900 sq ft” than “1,200 sq ft” based on these prices. (If #7NE is really one-third larger than this couple’s loft, then they really did over-pay a year before The Peak.) The thrust of my October 26 post was that the post-fire buyer got a pretty good deal; if so, this oh-so-chic-and-tidy couple should have no fears about holding their place in The Market after having paid $840,000 and invested in a $100k renovation, compared to someone paying $800k for a “900 sq ft” total gut 6 weeks ago.

Not least because they seem to have created a home they both love; indeed, “an ideal refuge”. So, to the oh-so-chic-and-tidy couple: congratulations on your upcoming wedding and enjoy your loft!

© Sandy Mattingly 2010

 

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Oct. 26, 2010 - what is your loft worth after a major FIRE? 12 East 12 Street loft goes for more than you'd think


20% off peak pricing??
The Manhattan loft 12 East 12 Street #7NE sold on April 8, 2008, almost exactly at The Peak of the overall Manhattan real estate market, and then again on September 24. Conventional wisdom might be that the very recent sale would be about 15% off peak pricing, which looks roughly predictive of the actual sale prices:

April 8, 2008 $999,000
September 24, 2010 $800,000

But here’s the kicker: between 2008 and 2010 this loft was totally destroyed by a fire, and just sold in that condition. Based strictly on overall market trends, there is almost no discount for this loft having been destroyed by fire. That’s weird.

not damaged, but destroyed
The loft was not marketed as being in need of repair; rather, it was “in need of a total gut renovation due to a fire” when it was offered for $850,000 on April 22.

Another bit of conventional wisdom is that in the current market and with prevailing bank lending limitations, two kinds of listings have sufficiently reduced markets that fewer qualified buyers mean longer marketing time and less competition (i.e., lower prices): (1) lofts needing gut renovations (generally to be paid for in cash), and (2) purchases that can’t be financed. This loft? Check (you already know it is a gut job). And check (“Cash buyers only!”).

Notwithstanding two significant market deficits, this burnt offering found a contract within 6 weeks (June 14) at a mere $50,000 discount from the $850,00 asking price (a reasonable 6%) ... fairly flying off the shelf. That’s also weird.

© Sandy Mattingly 2010

 

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Sep. 2, 2010 - nice loft, great deck, but not so near work


if this is "near" so is Penn Station
It is always nice to see a beautiful Manhattan loft featured in the media, and this more-foodie-than-lofty item from The Observer does feature a beautiful loft. The loft in question is the Penthouse at 238 East 4th Street, which was sold last week (August 24) for $3,027,373. At "2,700 sq ft" with a "1,200 sq ft" terrace with Empire State and Chrysler Building views and "the highest caliber of finishes" ("magazine ready"!), that seems like a good deal for a loft that is (per The Observer) "near the storied Village eatery" One If By Land, Two If By Sea (on Barrow Street in the West Village) owned by the new buyer. (Unless it is not near the restaurant.)

remembering things in the past?
The Market did not take long to warm up to this listing, though it did take a few trips to the barber: they started at $3.75mm in March, but were flexible enough to drop twice in April ($3.4mm and $3.195mm), then held steady until the contract on July 22 at that funny purchase price ($3,027,373; someone's lucky numbers??).

The story line for The Observer is the celebrity buyers and bold-faced-name sellers:

One if by Land, Two if by Sea owner Oscar Proust purchased some land of his own near the storied Village eatery. Mr. Proust and wife, Colleen Goujjane, snagged an East Village penthouse duplex at 238 East 4th Street for $3 million. The couple bought the three-bedroom condo from Niche Media editor and Hip Hollywood Homes author Sue Hostetler and husband, Jon V. Diamond, a media executive and co-founder of the Whitney Museum's New Media Committee. The apartment was listed by Corcoran's Julie Pham and Sarah Thompson. Mr. Proust bought the famous West Village restaurant 10 years ago, and refurbished both decor and menu adding Picholine chef Craig Hopson and re-antiquing the esthetic, replacing rugs with wide-plank wood floors and adding antique chandeliers. Perhaps he'll do the same for his new home which boasts, "the largest ipe-and-concrete decked terrace you've ever seen in the East Village with sweeping Empire and Chrysler building views."

east meets west, eventually
I bet that someone at The Observer missed the "E" in the penthouse's address, as 238 EAST 4 Street is hardly "near the storied Village eatery". That penthouse is almost at Avenue B.

Using the restaurant website's Google Maps Directions feature (which can give you directions by foot, bless them) the penthouse is 1.2 miles from the restaurant. That's about the same distance from the restaurant as Penn Station, or Madison Square Garden.

Indeed, Soho and nearly all of Tribeca is within that walking distance.

it is not the commute
A lovely loft, and a great roof deck. Just not very near the guy's restaurant.

Indeed, unless there is a same-family situation hidden behind a purchasing LLC in City records, that was absolutely not The Point of the purchase. It appears that he is moving to Avenue B from just around the corner from his restaurant.

StreetEasy show that he and his wife just sold the townhouse at 123 Washington Place, a mere 361 feet from OIBLTIBS, on June 10 to a LLC for $4.8mm. If that is an arm's length transaction, the clearing price is a long way from their attempts to sell at The Peak (March to July 2008), at $9.995mm and $8.995mm. But you will need a Manhattan Townhouse Guy / Gal to tell you that story.

© Sandy Mattingly 2010

 

 

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

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