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Manhattan Loft Guy

Sep. 26, 2013 - 28 Laight Street 1-day loft sale looks like a whisper listing

 
can't be real, perhaps it is one of those
We can agree, I assume, that the public record behind the recent sale of the "2,705 sq ft" Manhattan loft #2D at 28 Laight Street in the Cobblestone Lofts cannot reflect an actual public marketing. StreetEasy has it as new to market on July 2 and in contract by July 3 (our listing system agrees) and it is simply not possible for a buyer to learn of a listing on a Tuesday and sign a contract the next day. (Rather, it is simply impossible to believe that a seller would offer a loft on Tuesday to the general public for $x and then take it off the market within 24 hours unless the buyer was willing to pay a significant premium to the asking price, and even in this era of impossibly quick lawyers, it is impossible to believe that an impossibly quick buyer’s attorney would complete due diligence and contract review in that period.) In this (purported) case, the deal was done at exactly the purported asking price.

Nope. Looks to me like one of those ‘whisper listings’ marketed to only a limited number of buyers the New York Times was talking about as recently as this past Sunday. For Your Ears Only was the big story in the Real Estate section, describing as increasingly common in a broader milieu a practice that seemed to have been restricted to the oh-so-tony uptown world in which only the right buyer with the right bank account and the right great grandparents could buy your property anyway (so why advertise to schlubs?).

I read the piece, of course, but was not going to discuss it here. It is (still) a pretty infrequent situation and it is (still) difficult for me to appreciate exactly which sellers this strategy benefits, but it’s a free country! This first example makes half sense to me (it is just not very common), but the rest seems not so … plenty:

Plenty of circumstances arise in which it makes sense to keep a listing out of the limelight, ranging from celebrities who don’t want to read about their property transactions in the tabloids to sellers who would rather not upset tenants prematurely. Some sellers hope to avoid the hassle involved in getting a property in shape to show. Others don’t want a lot of people traipsing through.

The fact that So-and-So’s property is on the market (and, possibly, in the limelight) can be dealt with in other ways than avoiding a public listing. (Take the Oscars off the shelf, the glowing reviews off the wall, and put the family photos away, for starters.) Maybe there are tenants an owner really has to worry about being upset by setting up a regular appointment schedule for public showings, but some tenants will also be upset by having The One Buyer come by 3 or 4 times anyway. (Leases generally specify some terms on which an owner can access the tenant’s space for resale purposes, usually only at the end of the lease; that will govern whether the property is listed or not.)

The theory is that the current market is so deprived of inventory that a “seller” who really did not want “the hassle” of leaving the unit show-ready every darn morning, and especially every Sunday afternoon, can just leave the dishes in the sink and the kids’ rooms a mess for the few times that The Special Buyer comes to visit. I suppose The Special Buyer finds it easy to understand that the apartment is shown ‘lived in’ out of a special accommodation to The Special Buyer, as opposed to regular buyers in a public sale who will (really?) take points off because the apartment has not been made show-ready for them. I suppose. And sellers who “don’t want a lot of people traipsing through” can instruct their agent to make that happen, in lots of ways. (“Showings only Tuesday to Thursday, noon to 2 PM”; or restricting showings to buyers who have been financially vetted by the seller’s agent, for example.)

I get that there are benefits to sellers. An informed seller can do what she wants, of course, but I don’t see that the benefits outweigh the risk that she won’t get the best price, however. It is one thing to whisper to buyers about a commodity apartment, in a large building in which a person familiar with the building will know the unit without seeing it; that deal can be made confidently by a buyer, so long as the buyer has the opportunity to see it to confirm it meets expectations before signing.

But lofts are rarely commodities, even in buildings with 30+ units.

you have to whisper pretty loudly to get 20% in 14 months
In the case of loft #2D, any carping amounts to mere quibbling, given that the folks who just sold on August 29 at $4.58mm had purchased only on June 4, 2012 for $3.8mm. Unless that 2012 purchase was demonstrably a below market value, it certainly appears as though they got a good deal on resale. (It wasn’t: I hit a then-high-for-the-building sale at $1,167/ft in my April 28, 2012, what has changed at Cobblestone Lofts, 28 Laight Street, since 2005?; two months later the recent sellers at $1,693/ft bought #2D at $1,405/ft.)

As recently as December, The Market thought that this footprint in this same condition on (what passes at this northwest Tribeca location as) a much higher floor was worth $4.1mm with a $300,000 parking space. (That buyer could have bought #6D without the parking space for $3.8mm but paid another $300,000 to park downstairs.) So, yes, $4.58mm for #2D on a whisper seems like it ‘cost’ the sellers nothing.

And it seems as though an educated buyer would know from #6D what #2D would look and feel like before even seeing it.

but then, why bother with photos?
I bet that most whisper listings don’t have to get camera ready, but this one was. (After all, there are listing photos, with furnishings different from when #2D was marketed in 2012.) Leading to the conclusion that these folks were prepared to do a full public marketing campaign until someone made their day.

I don’t think that “asking” price of $4.39mm has any credibility, given that the deal must already have been struck at $4.58mm when the inter-tubes first got wind of this, but the $4.58mm is (as noted above) a demonstrably superior result based on #6D in December and the same #2D in June 2012. Maybe they were going to come out at $4.39mm, maybe not. Clearly, the $4.58mm hit their sweet spot.

Could they have gotten more in a truly public sale? Of course it is possible. But it is quite rational for owners at $3.8mm since June 2012 to believe that a quick sale at $4.58mm was ‘worth it’. The listing photos prove they were committed to selling, so this is likely not one scenario scoped out in the Times (the very famous real estate person who sold her condo after being approached by a buyer agent, and who insisted on all her non-price terms, as well).

Nicely played, folks; nicely played.

I look forward to the next sale in the building to put this super value in fully public context.

© Sandy Mattingly 2013

 

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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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