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Manhattan Loft Guy

Jun. 23, 2010 - 65 West 13 Street "sale" is not a "sale"


less here than meets the eye
You will not find the recent "sale" of the Manhattan loft 65 West 13 Street #9C in the Master List of Manhattan loft sales since November 2008 because I refuse to believe that it is a real sale. This, despite the fact that the loft was offered for sale through PruDE for 3 months in 2009 (asking $1.995mm) and again since February 2010 (asking $1.995mm), and that the sale on June 8 was reported within REBNY. Despite these typical indicia of an arm's length transaction, I don't believe the price reflects The Market and the names of the parties suggest an intra-family transaction. I will explain after a sideways digression.

The last extended Manhattan Loft Guy discussion I see about the challenges of figuring out whether a particular sale is -- or is not -- a real sale, and thus indicative of The Market, was my January 17 post, riddle me this / the naked data point at 35 Wooster Street. As I said there,

I had a WTF? moment when I noticed the December 28 "sale" of the Manhattan loft #4F at 35 Wooster Street, as the clearing price was a most un-lofty $985k for space said to be 2,100 sq ft. The $469/ft price is so low that I immediately doubted that it was a real (arm's length) transaction, especially as there is no listing associated with this "sale". The price seems too low even if the space was a total wreck or completely raw.

By coincidence, I happened to have had a real (face to face!) conversation with long-time Manhattan Loft Guy reader Lofty last week about the difficulties in interpreting raw sales data in Manhattan, including specifically the problems in figuring out if a transaction is a legitimate indication of The Market because it was at arm's length, or if it can't be used as an indication of real value because (for example) it is between two related parties. I had in mind in that conversation the hard-to-interpret resale of a loft at 260 West Broadway (December 2009 clearing price was lower than the March 2005 price) that I addressed in my Welcome Back post of January 4, American Thread loft sells on Groundhog's Day, again.) In that instance, there have been enough other sales in the building that this one stuck at as perhaps not at arm's length, and I speculated about a possible explanation.

50% off


Granted, there's been no sales in this building since

#8D

closed over a year ago, so it can be difficult to make judgements based solely on price. In addition, the #9C

sellers

had proven themselves to be persistent (persistent non-sellers, but persistent nonetheless), as they had tried to sell for 3 months in 2009, as well as for 5 months from 2004 into 2005 (at $1.95mm). It is safe to say from this history of no success, that the sellers had not found the right market price for the loft. Nonetheless, the sale recorded at $999,900 is just too darn low. I am immediately highly doubtful that any seller in an arm's length transaction would take a 50% discount without first dropping the price.



But the clincher in this case is that the buyer has the same last name as the two sellers. Almost certainly the buyer is the adult child or other relative of the sellers. Very likely, the sellers used this loft as a pied-a-

tierre

(they have the same notice address in Florida as sellers as they had as buyers in 2001). Possibly, the sellers got tired of not selling and decided to take some money out by some form of

intra

-family transfer.



send in the clowns (err ... lawyers)


The sellers paid $990,000 when they bought in 2001. They just "sold" at $614/ft, making a "profit" of $9,900. I assume they have excellent tax, gift and estate lawyers to work this all out, as the last sale (#8D in May 2009) was at $1,159/ft.



I just hope that anyone tempted to use this sale as a comp looks a little bit behind the numbers.



© Sandy Mattingly 2010


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May. 30, 2010 - if sold in 2005 and 2008 at same price, how to price a loft for 2010?


too weird to overlook
I am not going to offer too many details about this currently-listed Manhattan loft, so prepare to be frustrated! I think this loft's history is just too weird to not comment on, so nuts to you.

The loft is 2,000+ sq ft and has the kind of plus factors that often can justify premium pricing (such factors can include [but are not necessarily present here] outdoor space, views, amenities, finishes). The plus factors seemed to have worked in 2005, but not in 2008, which is very odd. By work-or-not-work, I mean that the loft traded at almost exactly $1,200/ft both times, but the 2008 clearing price was just a hair lower than the 2005 price.

maybe they don't want to sell?
With such an odd history, the loft could be a tough one to value in the present market. But I don't have much sympathy for the decision a few months after the Fall of the House of Lehman (and the nuclear winter that ensued for Manhattan real estate) to seek a 15+% premium over the 2008 sales price. (Whether that decision was more the owner than the agent, or vice versa, it was still a crummy decision.) So, no surprise that that price did not work in 2009.

When they decided to try again, they changed firms and eventually reduced from that exalted level to only a 6% premium over the 2008 sale price. I have no idea if they really want to sell, but if they do they have wasted many months above that 2008 and 2005 price. I suspect that a return to that $1,200/ft range is what it is going to take, and I will monitor the listing and let you know what happens.

© Sandy Mattingly 2010

 

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Mar. 17, 2010 - 170 Fifth Avenue loft sales are confusing


sound + fury = what? (nothing??)
In this episode, Manhattan Loft Guy chews on a sale price that just bothers him, and concocts a scenario to account for the odd transaction.

For a small building (12 units) and a short history (converted to condo in 1999), the Manhattan loft building 170 Fifth Avenue has had an awful lot of activity in the last five years, with two lofts changing hands in 2009. You'd think (I thought) that with so much data the valuation trends would be clear. You'd be (I was) wrong about that.

I will get to the data below, but loyal Manhattan Loft Guy readers may remember that I visited this building on August 13, 2009, to try to make some sense of the then-recent sale of the 5th floor in light of closed loft sales here from 2007 and 2005 and a contemporaneous failed marketing campaign in 2009, 170 Fifth Avenue closes AT 2007 (maybe).  The on-the-one-hand-on-the-other-hand theme in that post is proof that I did not make a lot of sense out of all those data points, but that post was one of a series comparing 2009 sales to 2005 and other prior sales. As I intro'ed and linked then:

There have been a series of Manhattan Loft Guy posts of late comparing 2009 clearing prices to 2005, or other prior sales. (This July 29 post canvassed quite a few, attack of the Killer Comp (when 2005 pricing does not help), and I have added several since then.) Generally speaking, 2009 has not done very well in this competition, so I was a little surprised to see a recent sale in which 2009 may have held its own against 2007.

(Remember that: I was surprised at the time that the July 2009 sale price held up so well, compared to 2007.)

cue the head-scratches
There's been a more recent sale in the building that has had me scratching my head ever since I came across it in the course of (finally) bringing my Master List of Manhattan Loft Closings up to date about a month ago (February 16, master list of Manhattan loft closings is up to date!). Let's get to the data, then we can all scratch heads together:

Oct 30, 2009 #6 $3,247,500
July 21, 2009 #5 $2,945,000
     
Feb 6, 2007 #3 $2,972,500
     
Sept 8, 2005 #7 $3,200,000
March 14, 2005 #3 $2,800,000
Feb 1, 2005 #2 $2,725,000


comps should be comparable, shouldn't they?

Remember that all lofts in this building were built out new in 1999 as a "luxury" condo conversion (how many 12 unit buildings have even a part-time concierge, or two elevators??) and that all are floor-through lofts; meaning that they all started with a high level of finishes and the same footprint of "2,736 sq ft". Recall also that the 7th floor sold in 2005 at $3.2mm but did not sell from October 2008 to May 2009, despite having been offered at $3.195mm for the last nearly 100 days of that effort.

Not to tax your memory unduly, but you should also keep in mind that the 5th floor sold in July in such a refined condition that the broker-babble was not only extensive but almost giddy ("featured in numerous design magazines and books" will give you the idea).

So how could the 6th floor loft sell -- without being publicly marketed -- at a 10% premium three months after the 5th floor??

Damned if I know.

This sale is one of those noted by StreetEasy as "[n]o listing associated with this closing", so there are no pictures, no floor plan, and no prose by which to assess how it compares to the other beautiful lofts in the building. Having scratched around the Property Shark and the Department of Buildings website in an attempt to get some info, I see no work permits for a 6th floor renovation. (Interesting that the new owners of the 5th floor filed renovation plans soon after closing, though I cannot tell from any documents in the DoB's Virtual Job Folder how extensive a job they did.)

I have to believe that the 6th floor was in pretty much the same condition it had been in when the October seller bought it (for $1,434,000!) in February 2000. If it is in that ten year old original condition, it probably does not compare well to that magazine-featured loft on the 5th floor.

arm's length or within the tribe?
Prior to October 2009, the only clearing price that really stood out over the last five years was the $3.23mm paid for the 7th floor in March 2005, yet The Market was unreceptive to a resale of that loft in that pricey neighborhood for the 8 months before May 2009. As of October 2009, the most recent sale at 170 Fifth Avenue was the July sale of the "featured in numerous design magazines and books" 5th floor at $2.945mm, a trade essentially even to the last prior sale before that one (the 3rd floor in February 2007). You will recall that I was surprised by that.

Let's be blunt: The data show that the October 2009 buyers overpaid for the 6th floor.

Comp theories aside, those buyers could certainly have gotten the 7th floor for less than they paid for the 6th floor, as the 7th floor was publicly offered for sale at $3.195mm from February into May 2009. Chances are, the 7th floor sellers were willing to negotiate off that asking price, and a further 10% final discount would have brought a (hypothetical) deal for #7 into the $2.9mm range around where the last two neighboring lofts traded.

Unless the 6th floor is really really really unique, the opportunity to buy the 7th floor at $3.195mm or less should cap the price that a rational buyer would pay for the 6th floor in a rational market.

So the Department of Redundancy Department asks again: why did these people overpay?

the Oscar for Scenario Spinning goes to ...
I have a theory. My theory is based on some facts and considerable speculation. On one side, the facts are that these buyers are very well-heeled, very well-connected political lobbyists in Washington DC (the story in the Washington Post about the White House release of 6 months of visitor logs says "the powerful husband-and-wife lobbying duo, have met with top White House officials numerous times. [He] made at least four trips; [she] visited three times"). On the other side, the seller is a very high-powered and well-compensated law firm partner (he made the NY Times when he recently changed firms) who personally maxed out his campaign contributions to Hillary Clinton ($2,300), yet also gave $1,000 to the Obama and Edwards campaigns; he earlier contributed $1,000 to Wesley Clark and $2,000 to the DNC in 2004.

To connect the dots, if these people didn't know each other personally, I'd bet that they have good friends or close political connections in common. So I think that someone told the seller that the buyers were interested in having a Manhattan base, and maybe they complained that they had no time to do open houses or otherwise visit apartments. (Maybe they even complained about Manhattan real estate agents, or the relative lack of transparency in our market; but I digress....)

Probably the seller said something like I'd let you have mine but you'd have to make it worth my while. Maybe the buyers said something like your place is just perfect and we'd save so much time and energy not having to search, so we'll give you 10% over the last sale. (That number would be $3,239,500, btw.) Then (maybe, maybe) the seller said deal! but if you want to keep the [something or other] I could let you have it for another $8,000.

That is how (my imagination tells me) The Movers and Shakers make deals! It also accounts for the peculiar (not very round number) trading price of $3,247,500, but that's because I cheated over that last $8,000.

Now that I have walked through this very logical solution to a very illogical sales price conundrum, I wouldn't be surprised if the seller hosted a political fund-raiser in his beautiful 6th floor loft that the buyers attended. Maybe they fell in love with it then....

If someone has a better theory (or even some facts) I'd love to hear it.

yes, that building
You may not know this building by name (the Sohmer Piano Building) or by its address, but you know this building if you have ever looked south at the Flatiron Building from a few blocks away, as this is the building at the far corner of Fifth Avenue at 22 Street with the gold dome (copula?). Very distinctive. Iconic in its own way.

a happy building
And now the new neighbors are very welcome, having brought the gift of an inflated comp to each of them. The gift that keeps on giving, indeed!

 

© Sandy Mattingly 2010

 

 

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Aug. 29, 2009 - modesty rewarded, but 'how well?' remains the question


sometimes Manhattan Loft Guy gets it right
I posed a question on July 8 that was answered very quickly: will pricing 25% below 2007 hit The Market in a sweet spot?  The answer came in an update on StreetEasy the very next day: contract signed. It sure is nice to get an answer; better, an answer that supports one's general thesis....

The loft in question has not yet closed (so will remain anonymous), but found a contract in a somewhat thin market within 3 weeks. Nice work, that. I may not be able to identify this loft until a while after it closes, as the stubborn neighbor upstairs ("an upstairs neighbor has been stubborn, and offering another (essentially identical) loft at more than 20% above the new asking price, without generating a contract in the 8 months that has been offered") has still not generated a contract and has not bothered to change the price -- the hallmark of a seller waiting for a listing to expire. If it expires, I will be able to come clean about this building (one of "the roller coaster of brand name loft conversions in nabes that are tres fasconable"); if not, you will remain in the dark.

I reviewed on July 8 the building's listing history since the newly-converted-loft was converted in 2005, which involves considerable up-ing and down-ing. Hence my final comment on July 8 about the soon-to-be-in-contract-but-hardly-on-the-market sellers: "At a minimum, they are ignoring much of the background noise of the intervening roller coaster years. Props to them for that." That ignoring thing can be hard.


© Sandy Mattingly 2009

 


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Jul. 1, 2009 - (too rich, too thin) too stylish to sell (well)?


vanilla (sold) vs. guava with hints of chili (languishing)
I was going to do this post about a recent sale of a Manhattan loft (one of those great price! 3-weeks-to-contract price discussions), possibly followed by an aside about the remaining unit for sale in the same building (if I was willing to keep the whole thing anonymous). But then I looked at the loft still for sale in the building and the two price histories and realized that The Story is more about the one left behind at this point, rather than the one that succeeded. With that convoluted introduction, let's get to the meat of the matter....

There is a lovely (anonymous!) Manhattan loft for sale that is almost a One Bed Wonder (haven't talked about one of those for a while). It is rather large, wonderfully renovated in a manner tres chic moderne, and has had a bit of trouble finding The Market since coming out for sale in January (3 price drops). Interesting (to me, at least) that it was in competition with a neighbor with an identical footprint but different floor plan. Some day this post will mature into a (completed) neighborly competition post (like neighborly competition leads to neighborly mistakes? the laboratory at 24 East 22 Street from November 30), but until this one closes this post will fit the incomplete competition mold, such as April 17, break away to win the neighborly competition / so many lofts, so many dollars ... but no sales (yet) , January 7, are they fooling only each other? / 3 neighbors push, 1 smiles , December 12, more unintended consequences in petri dish of Tribeca neighbors , and December 7, selling the neighbor's loft / unintended consequences in a Tribeca petri dish?.

neighbor vs. neighbor
The neighbor who sold in this building slightly undercut the asking price of this loft, to which this seller responded within two weeks by matching the interloper's asking price. Problem is (for this seller), that that interloper found a contract [about 8%] off that asking price within 3 weeks [updated 7.9 to reflect actual clearing price], while this one did not. Indeed, this one did not find a buyer with an asking price reduced by another $100k; or with an asking price further reduced by $100k. So, this might be a situation such as at 144 West 18 Street, where there seemed to be exactly (and only) one buyer above $1,200/ft so one neighbor got that price while the other neighbor (same apartment, just a bit slower to react in pricing) took another 6 months to clear at $1,050/ft. (June 11, neighborly competition / laggard at 144 West 18 Street closes off 15% since December)

But these two lofts are not very similar (identical footprints notwithstanding), so maybe this is an instance of The Market truly preferring one loft to another.

No disrespect intended to the loft that sold (to the contrary, it sold), but that one has a conventional layout to carve 3 bedrooms (plus additional space) out of a Long-and-Narrow with good light at each end, and is done in entirely neutral tones (white walls, white kitchen, light finish on the hardwood floors, light stone in the bathrooms). It is something of a poster child for being in "sale-able" condition -- using a palette that all buyers could easily envision to base their own lifestyle on if they bought that space. The degree to which this one is neutral is perhaps best appreciated by reference to the other one (The One That Has Not Sold [yet]).

The One That Has Not Sold (yet) gives one entire end of the loft to the master suite and squeezes a (proportionately) tiny guest room into the other end. Like the one that sold, this one has a white ceiling -- but otherwise is a (comparative) riot of color and texture, with many vertical surfaces in dark shades, a dark finish on the floor, and rather dramatic design elements (oh that bathroom!). Plus, there are curves and arcs where the other one had straight lines and right angles. The color, layout and 'design' differences between the two are so dramatic that there are probably few people who would be conflicted in choosing one or the other, assuming rough dollar parity.

back to ice cream preferences
The one that sold is lovely, tasteful, (apparently) high-end, but somewhat ... vanilla. Let's upgrade that to french vanilla, maybe served with that long vanilla bean and a airy wafer cookie. Many, many people like french vanilla ice cream.

The One That Has Not Sold (yet) is lovely, somewhat dazzling (distracting?), definitely high-end art-y and even ... spicy. Let's upgrade this one to hand-turned guava with hints of chili. Some people love this exotic taste; others appreciate the composition but not the flavor (at least not enough to buy it). There are many, many fewer potential buyers for this taste, even without considering price.

The right buyer for The One That Has Not Sold (yet) will love this space and have a life-style suitable for an almost One Bed Wonder, rather than a 3 bedroom-plus layout. Chances are, if one were to try to re-format the space to add bedrooms one would ruin the thing that makes it guava-with-chili.

repeat after me: a thin market is ...
... a dangerous market for sellers. (June 15, price drop can re-set expectations IF low enough) And an especially dangerous market for sellers of 'unique' properties. Plus, a thin market exacerbates the anxiety in pricing any 'unique' properties: there should be buyers out there at $Xmm and dropping the price might not make much of a difference. These sellers have dropped twice since the other one went into contract. It is a very tough call to hold and wait for that buyer (singular) with appropriate (a) money, (b) taste, and (c) lifestyle (family structure). This is one of those Manhattan lofts that might sit on the market a good bit longer and be (relatively) impervious to price drops.

FAS-cin-a-ting, indeed. I will watch this one avidly and hope that it sells so that we can take the wraps of anonymity off this post.
 
 
© Sandy Mattingly 2009

 

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Apr. 17, 2009 - break away to win the neighborly competition / so many lofts, so many dollars ... but no sales (yet)

 

but will ANY win?
I have been having an off-line dialogue since March with Reader SW about a particular high-end Manhattan loft building with multiple units for sale, which prompts a(nother) rumination about neighborly competition. (I have linked to some other neighborly ruminations, below.) As of then, the four-way-neighbor-against-neighbor dynamic was fascinating but static -- I didn't see any of these lofts as being priced in the range to generate a deal (unless at a substantial discount).   In other words, they appeared to be "sellers" who were afraid to break away from the pack, into a zone where buyers troll.
 
first, the (early) history box
 
  Day 1 Day 37 Day 42 Day 45 Day 62
A new at $1,300/ft     drop to $1,225/ft  
B   new at $1,400/ft drop to $1,350/ft    
C       new at $1,275/ft  
D         new at $1,350/ft
 
My immediate thought when that fourth loft hit the market was "these people are more scared of leaving money on the table than they are of not selling at all". (See my March 25 rumination, am I a coward? assessing + bearing risk in a risky world .) The "D" "sellers" are counting on their finishes and specific form of spectacular (more on the loft interiors below) to distinguish them from the other 3 lofts ... "good luck with that" (my second thought when "D" hit). By that time, "C" and "A" (especially) had changed thegame, albeit not dramatically.

But then one player got tired (or for some other reason took a loft off the market, temporarily, it appears) and two additional players took the field.

the updated history box
 
  Day 1 Day 37 Day 42 Day 45 Day 62 Day 68 Day 71 Day 81
A new at $1,300/ft     drop to $1,225/ft        
B   new at $1,400/ft drop to $1,350/ft       off market (temp)  
C       new at $1,275/ft        
D         new at $1,350/ft      
E           new at $1,125/ft    
F               new at $950/ft
 
The "E" sellers really sought to distinguish themselves from their neighbors on price, so they must have been crushed when the "F" neighbors came out to play. "F" has clearly positioned itself as the one that dollar-conscious buyers have to consider first. At a minimum, the "F" sellers have made it difficult for the others to maintain their current asking prices, even with a buyer who is not interested in buying "F".
 
the lofts (ooh-la-la)
Trust me, this building is one of the great condo loft conversions in its prime Manhattan loft neighborhood. Moreover, each one of these lofts has high-endfinishes, though they vary in the quality of the views (one of them, at least, has spectacular views), and they are of similar sizes and configurations. I will not use the u-word, but they each have very different looks -- so much so that I can easily understand some people feeling strongly that they might buy one (at the right price) but would never buy another (at any price).

If this neighborly competition occurred in a cookie-cutter "apartment" building in Manhattan (even a high-end "apartment" building), the outcome would be clear: no one would bid on "B" or "D"; every serious bidder would bid on "F" and probably "E"; while "A" and "C" might get some action.

But the dynamic here is much more intriguing because these lofts vary so much -- though all are high quality. I will be surprised if "F" does not find a buyer relatively soon, as they are clearly serious about selling. I will be surprised if "B" (if it comes back at the same price) or "D" are able to negotiate off their asking prices, except at big discounts; indeed, I will be mildly surprised ifthey get much action at all, as I think the "F" boldness on price makes them appear to be unserious as sellers -- their beautiful lofts notwithstanding.

This plot is thickening, nicely. Thanks to Reader SW for focusing me on this dynamic..

© Sandy Mattingly 2009 

 

 


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Apr. 11, 2009 - the problem of price discovery (hint: you have to pay attention)


if a tree falls in the forest ...
I've been mulling a long-ish post on price discovery for quite a while (not writing it, obviously; just mulling). Pulling together some interesting riffs by other bloggers and news articles and market activity (and market inactivity), all in service of the idea that one of the problems with The (current) Market is that it is so thin that it is hard to know where the right price is for a particular Manhattan loft. In that situation, with actual loft closing information rather scarce, it is critically important that sellers pay attention to prices that do not work. Seems kind of simple, no? (simple as in simpleton, btw)

Perhaps this will be a start of a string that will, together, compose a long-ish post on price discovery ....

A new Manhattan loft listing in out-of-the-way Tribeca reminded that there had been an interesting loft offered for sale in that same building last year ... I wondered what happened to that one? I noted just now that that one did not sell, after having been offered for about 3 months. So, we learned that that price for that loft ($1,300/ft) did not work,right?

Then I noticed that yet another loft in that building that has been for sale for most of the last 7 months for just over $1,000/ft. So, you'd think we've learned that that price for that loft does not work either (no price change in 7 months is pretty stubborn, no?). But that one is still "on the market" in the sense that it is an active listing, and perhaps in the sense that they will entertain any offers -- though they are unlikely to get many.

if a price fails in The Market, but no one is paying attention ...
That new one? Offered at $7/ft less than the unsuccessful-for-7-months loft (one dollar off per month??).

head-scratching ensues (no hilarity, yet)

As far as I can tell from the prose, pix and plans, the three lofts in question are in comparable condition.

As far as I can tell, The Market has resisted Loft #2 (in our sequence above) at about $1,000/ft. As far as I can tell, there is no reason to think that a $7/ft "discount" on Loft #3 will be any more attractive to The Market. As far as I can tell, the seller (and agent) for Loft #3 learned nothing from the (non)sale of Loft #2, which has lasted 7 months -- so far.  Head scratching ensues ....

 

© Sandy Mattingly 2009

 


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Apr. 2, 2009 - can an address provide enough oomph?


pricing like it's 2008
One of the risks of pricing a Manhattan loft above The Market, of course, is that no one will visit, let alone bid, because there are alternatives that start at lower-prices. (I discussed this most recently, in a cowardly fashion, on March 25, am I a coward? assessing + bearing risk in a risky world .) But what if the building has a strong history? Can a building be enough of a draw to ensure that 'enough' buyers will visit 'anyway'? Can a seller reasonably expect to attract buyers in 2009 by asking 2008 prices because the building has been a draw in the past, leaving (an otherwise risky level of) negotiating room? (When will Manhattan Loft Guy stop with the rhetorical questions and get down to it??)

if it takes a Village, can a building suffice?
Of course I have a building in mind. Lovely Greenwich Village loft conversion; now a very mature coop; a very handsome loft building on a beautiful loft block. A handful of sales in this building last year took just a few weeks to get into contract -- typically at, above or at a very small discount from full asking price --  certainly evidence that The Market loves well-priced lofts in this building, and evidence (perhaps) that The Market simply loves this building.

here's the rub
Each of the handful of 2008 sales went into contract before Lehman.

here's another rub
Each of the handful of 2008 sales sold in the range above $1,000/ft, while two were at or above $1,100/ft.

when the rubbing meets the road

The new-to-market loft is priced just above the price/foot level of any of that 2008 handful. The new-to-market loft is marketed based on space and character (and on the building), rather than on its finishes or renovation; the handful from 2008 liberally tossed mints, named proper proper names, and generally bragged.

From a purely marketing perspective, the new seller is asking a slight premium to 2008 pricing for a unit that is not described as a peer of those that got 2008 pricing (way back in 2008, of course), as if the seller is confident that the building is enough of a plus factor to overcome an aggressive price. From a purely Manhattan Loft Guy perspective, this charming loft in a handsome classic loft building on a beautiful Village block is today's candidate for the too pushy ...? thread. Needless to say, I would be too afraid to rely on the address to attract buyers at this price level, but courage is sometimes rewarded....
 

© Sandy Mattingly 2009  

 

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Mar. 19, 2009 - 50 Walker Street closes well off August ask after being publicly negotiable + serving bourbon


not like yesterday
The full history of the Manhattan loft #6A at 50 Walker Street will reveal just how different this marketing campaign was from the loft addressed yesterday (why be that negotiable in secret? 25 Ann Street closed nearly 25% off ask ), but for now (before the clearing price is known) the difference is sufficiently stark and (in relation to 25 Ann St) sufficiently timely to warrant a post. (Side note to the chasing-a-dream Anon from March 15: this is the kind of timely + relevant info I like to provide, but the trade-off is that it won't be complete until ACRIS is updated with the actual sale price.)

a truly spectacular loft (did a grandparent buy?)
This loft has been one of my favorites since it came to market last August, just weeks before Lehman, when the world was a different place. In fact, I have twice drafted posts about it, but have never finalized them for one reason or another.  (The part of the PruDE listing captured by StreetEasy is here.) The loft is only "1,600 sq ft", set up as a 2 bedroom, but it is (to my loft-y snobby eyes) beautifully finished and there is "1,000 sq ft" of private roof deck. As the broker-babble has it, "old Tribeca meets the 21st Century". I've had it high on my list of classic-lofts-with-outdoor-space, but haven't had one of those buyers while this has been available.

The loft was featured in a NY Times article on November 14 about a one night 4-stop loft tour with whiskey and bourbon. They served bourbon at 50 Walker Street, the last stop on the tour. Although the reporter liked the loft (it "seemed like a bargain"), one philistine 24-year-old-trader sniffed: “It’s cool, but it’s kind of like a museum,” he said. “It feels like my grandparents’ house.” Dude must have cool grandparents, no?

no secrets
Ii have watched the price history with interest, and not  a little sympathy for the owner and the experienced agents who manged this process:

  • 8/13/2008  to market at $3,195,000
  • 10/08/2008 drop 9% to $2,895,000
  • 11/12/2008 drop 3% to $2,795,000
  • 11/18/2008 drop 4% to $2,695,000
  • 2/05/2009 drop 7% to $2,495,000
  • 2/12/2009 contract

It was updated yesterday as Sold & Closed, ironically at about the same time I posted about the

secret

negotiability of 25 Ann Street #4 which -- I have to believe -- cost that seller some money. Nothing secret about the intentions of the seller at #6A 50 Walker Street ... drop the price to find The Market. Assuming (optimistically) that #6A got the last ask, there is a 22% spread between start and finish (more likely, the spread will be higher when the trading price is available).



1. see the problem 2. fix the problem

This seller recognized the problem (though not its scope) within 60 days, lopping 9% off the original price. This seller waited only another month to drop again by six figures, then tried again almost immediately, to head into the 'holiday season'. This seller then gave the New Year a chance to see if it would bring a new set of buyers and -- when it did not after 35 days of New Year -- dropped the price another $200k.

That

price found The Market.



No buyer that was at all interested in a loft like this could have mistaken this seller as one who would not negotiate -- the owner made four public announcements to that effect. In contrast, 25 Ann Street #4 had one price change and one change in firm over 4+ months before negotiating a deal 23% off the last asking price. My point yesterday was that they'd have done better if they had been more public about their willingness to compromise. Most buyers are likely to have interpreted the refusal to drop that price again as implying that the seller was not very negotiable.



I suspect that the buyer for #6A at 50 Walker Street did not negotiate a deep discount off the last asking price, but time (and ACRIS) will tell....




© Sandy Mattingly 2009  

 

 

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Mar. 14, 2009 - diversion for a Saturday

 

comedy or tragedy? you decide
My eyes almost popped out when I saw an all-agent e-blast about a new price for a Manhattan loft that happened to get through my junk filter. (Note to self: fix filters.) Then I scratched my head, not sure how to react to this sequence of price changes.

I ended up totally unsure how to frame this, but I invite you to consider the likely conversations between agent and seller implied by this history and to decide for yourself if this is farce or drama:

  • new to market in January for $1.75mm
  • 1 week later $1.65mm
  • 2 weeks later $1.595mm
  • 3 weeks later $1.495mm
  • 6 weeks later (another price drop, but I don't want you identifying this loft, so I will keep that detail to myself)

Is this evidence of a preconceived plan, or of a shouting match between seller and agent?? I'd love to hear some comments on this....

 

© Sandy Mattingly 2009

 

 

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Feb. 11, 2009 - (kinda) quick trip to closing, but a long trip off ask at 147 Waverly Place

 

flipping can be stressful, no? (+ exciting)
The story of the marketing and sale of Unit 1E at 147 Waverly Place (a 'successful' flip) is not a long story (except as I tell it), but it packs a punch. But first, a digression (feint?)....
 
This true loft building is one of several along the Sixth Avenue corridor in the Village, and this one is just far enough from the avenue that it is probably nearly placid. The building was (finally) converted to condos in 2008, with the sponsor sales closing from February through November.
 
Based on the prices the sponsor asked for and got, this was a rather successful development, the challenges of the Village street grid notwithstanding. (Hint: the Word of the Day is "heptagonal".) See this piece from The Real Deal from April 2006:
 
A project converting 147 Waverly Place in the West Village to condos had to contend with another unusual structural detail -- a heptagonal, or seven-sided, building. Some of the 20 half- and full-floor condos in the building feature as many as seven exposures, a definite draw for buyers who want views. The potential downside of working with a seven-sided building is that rooms could have unusual shapes, but that was minimized.
***
Because of limited floor space, common hallways were eliminated. Instead, the building was outfitted with two banks of elevators so elevators open to each individual apartment.
 
and a history digression
I have tried to figure out what this building was, pre-conversion, but Google has not been my friend on this one. It is clearly a loft building with a commercial or industrial past, but neither the building website for the marketing, nor the architect's website (BKSK Architects), nor any of the various press mentions I found for the project describe its prior use, with one small exception. Hoping for Christopher Gay, I got Florence Fabricant, covering the theatrical (?) production of Tony and Tina's Wedding, which in the 1980s held the wedding reception of that eating extravaganza at Vinnie's, a second floor restaurant at 147 Waverly Place (if "Vinnie's" is fictional, then Gus's is the restaurant on the ground floor; I think).
 
Other than the Tony & Tina restaurant connection, does anybody know what this building used to be?
 
back to The Story Of The Flip
Unit #1E is basically a very large studio ("975 sq ft" plus a terrace) that sold originally on June 13, 2008 for $895k. (If you are sitting down and have no liquid in your mouth, continue reading ....) The June Buyer started as Wanna-Be-Seller on July 28, 2008 (if you are going to flip, why wait?), asking (I said no liquid in the mouth) $1.995mm, which is not a typo but an asking price more than double the purchase price.
 
But the Wanna-Be-Seller did want to be a seller, so the price dropped to $1.695mm within 7 weeks, to $1.499mm 2 weeks later, to $1.299mm after another 7 weeks, and (finally) to $1.199mm on December 5 -- which generated a prompt accepted offer (December 17) but a slow contract (January 15, 2009). No delay on the closing, though, as that seems to have been February 6 according to the inter-firm data-base. (Clearing price is not yet available.)
 
velocity x magnitude = whiplash 
The speed at which the Wanna-Be-Seller adjusted the asking price for this Manhattan loft is remarkable, as is the magnitude: the $796,000 price reduction was a 40% "discount" off the asking price. Yowza. (How's that for punch?) But they still did the deal in six months.
 
The other attempted flip here was both much larger and more modest, yet unsuccessful (the listing expired without a sale). That one was bought for $5.85mm in July and immediately put on the market at $7.25mm, then $6.95mm, then $6.495mm. No deal, and off the market as of a couple of weeks ago.
 
© Sandy Mattingly 2009 
 
 
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Jan. 28, 2009 - out of range, out of mind ... setting records or delaying sale?


pay the price if they don't pay attention
The risk in pricing a Manhattan loft above where anything in a building has sold is that potential buyers will be turned off by the price before considering the plus factors you tout to justify a record price. In this market, that is a risky approach -- anything that shrinks your potential buyer pool will make a sale take more time, or not occur at all.

Nothing controversial about that paragraph is there? Depends on where the rubber meets the road, I guess.

pricier than Whole Foods
This hard rubber is meeting the road somewhere in the Greater Whole Foods Meets Trader Joe's area sometimes known as Union Square. There's a lovely Manhattan loft new to market this month with much bragging: proper proper names, classy materials, thoughtful details; all in all a myriad of ways that this loft exceeds in quality (byimplication, at least) anything that has ever sold in the building. The risk they run is that this thing is priced about $250/ft higher than anything else that I see that has sold in the building -- and those sales were in much better than estate condition.

not a Filene's Basement price
This hard rubber also meets the road near where Chelsea and Flatiron intersect, or overlap. There's another lovely loft newly for sale in that area that was purchased in 2005 under $1,100/ft but is nowoffered nearly $400/ft higher. Yes, 2009 is not 2005 ( doesn't that cut both ways!), but $400 should have paid for a deluxe plus ultra renovation. I am not sure that even very good marketing will draw enough eyeballs into this space.

I wonder how many people will even go visit these lofts to be dazzled into paying a large premium over building norms. Looks like two candidates for the too pushy ...? thread to add to the Manhattan Loft Guy watchlist.

 

© Sandy Mattingly 2009  

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Dec. 1, 2008 - to Chelsea to push the too pushy ...? thread


pushy, pushy, pushy (or not)
This week's Chelsea candidate for the Manhattan loft Goldilocks question (we started this thread on November 14 with two in 2 new Tribeca lofts too pushy or just pushy enough?? and have been reheating it like last week's stuffing ever since) was fully renovated since it closed three years ago around (if the square footage number is right; I have my doubts) ... (wait for it) ... $350/ft. (Yes, that first digit is a three.)  It is new to market last week, above twice that.

My guess is that this one is on the "too pushy" side rather than the "not pushy enough" side, particularly as it remains ideal for someone allergic to sunlight. It took a long time to sell last time, so be patient. The Market will decide. I will report.
 

© Sandy Mattingly 2008  

 

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Jul. 31, 2008 - lux diversion / Time Warner or 165 Charles as better "investment"?

not much gain for Portman
Braden Keil's Gimme Shelter grab bag in today's NY Post (hat tip to Curbed for pointing it out) mentions two celebrity Manhattan real estate transactions that caught me eye, though neither involves a real loft. The first 'news' is that Natalie Portman is selling her "convertible three bedroom, three bath apartment" (with "2,500 sq ft") at 165 Charles Street on the market for $6.55mm, but what startled me is that she reportedly paid $5.7mm in 2005. Assuming (big assumption) that she gets full ask now, her net-net gain calculation starts at $850k -- before melting away. Her transaction costs on that sale will be (in round numbers and at a minimum) 5% broker commission (they are offering 2.5% to a buyer agent) and transfer fees to NYC and NYS of 1.825%, or nearly $450k. Assuming she paid transfer taxes on her way in in 2005, that's another 1.825% on that $5.7mm purchase, or another $100k.

So, $550k of her $850k 'gain' is eaten up by round number big ticket transaction costs, whether she paid cash or secured a mortgage and assuming she gets 100% of her asking price on the way out. At least she won't have to worry too much about capital gains taxes....

Costas does well
The contrast to Bob Costas experience at the Time Warner Center (reported in the same column) is remarkable. Costas has already closed on his sale of a 61st floor 3-bedroom for $8.5mm. Like Portman, he bought his unit in 2005, but he paid 'only' $4.95mm, so his net-net gain calculation starts at $3.55mm (four times Portman's if she can sell at 100% of ask) and doesn't melt away much. He will be pleased to pay his significant capital gains, I am sure.

representative values?
I have no idea if these two transactions (actually, one transaction and one marketing effort) are representative of values in their respective buildings. But the 3-year-appreciation contrast is stark: less than a 15% gain for the Stars Wars gal if she gets her ask at 165 Charles Street, vs. 70% for the Sports Guy at the Time Warner Center.

Not that you should look at your home as an investment or anything....

 

© Sandy Mattingly 2008


 

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Jun. 26, 2008 - head-scratching over $650/ft and outdoor space


opportunity? we got opportunity
For the first time in months, I am going to comment on another firm's Manhattan loft listing today -- without identifying it in deference to my resolution in end of an era for Manhattan Loft Guy / a new day dawns? from April 9 -- because it seems to me to be a great opportunity for a loft buyer at about $650/ft. The loft is in a building that has always represented value to me; it is duplexed but with a real 2 bedroom 2 bath layout; it has outdoor space that looks pretty usable ("free" under the $650/ft pricing of interior space); and the price has come down about 25% from its original asking price.

issues? we got issues
Of course there are some deficits, which is why The Market has let it hang. Some people just don't like duplexes. Some folks don't like the block this building is on. This unit has a rather large monthly expense ratio (roughly $2.00/ft). Can't tell if it in need of a remodel or upgrading, but it could be 'move-in'.

Whatever ... I have always liked the building. (This is not a fringe neighborhood, I promise.) You simply will not find many (any?) Manhattan lofts at this price-per-foot point, let alone with "free" outdoor space.


© Sandy Mattingly 2008

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Apr. 7, 2008 - past the point of pain at 32 West 18 Street w new price drop


I have removed the content of this blog post, as it comments about the current listing of another agent. For information about why, check out end of an era for Manhattan Loft Guy / a new day dawns? from April 9.

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Apr. 3, 2008 - ... 3 (more) french hens ... 2 (more) price drops (477 Broome + 28 West 38 St)



I have removed the content of this blog post, as it comments about the current listing of another agent. For information about why, check out end of an era for Manhattan Loft Guy / a new day dawns? from April 9.



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Mar. 19, 2008 - drip drip / price drops at 124 Hudson + 684 Broadway to and from $3.05mm


I have removed the content of this blog post, as it comments about the current listing of another agent. For information about why, check out end of an era for Manhattan Loft Guy / a new day dawns? from April 9.
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Feb. 16, 2008 - price drops at 684 Broadway, 49 Warren, 249 Church

I have removed the content of this blog post, as it comments about the current listing of another agent. For information about why, check out end of an era for Manhattan Loft Guy / a new day dawns? from April 9.

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Dec. 4, 2007 - raise, drop (rinse), repeat / loft pricing theory, explored



what's the point of throwing 2 cents in, or out?
I have been ruminating for weeks about the theories of changing a listing price, ever since I noticed that one very successful downtown agent has a habit of frequent small price changes.

I will identify the Manhattan loft listing below, but here's the pattern on a listing showing a price drop yesterday:


Sept 24 = "initial price"
Price increase
Price drop
Oct 9
$1,000 ("correction")
Oct 16
$1,000 ("correction")
Oct 23
$1,000
Oct 29
$1,000
Nov 19
$1,000
Nov 26
$1,000
Dec 3
$1,000


easier than playing with 135 Hudson
Two weeks ago I blogged predicting next price drop at 135 Hudson Street, implying that there is another $50,000 price drop likely to be needed for that loft to find a buyer.

As I have suggested before the conversations about price adjustments between agent and seller can be very difficult. Each situation depends on the specific facts, of course (how many people have visited, any bids, etc), but everything becomes more clear as retrospect gets longer and longer. The slow death of small increments is a painful process, which can be hard to recognize in the emotion of selling -- until it is too late.

I talked about "death by small increments" on September 26 last year (puzzling price policy / slow death near Union Square)…

But the next price change for the "$1,000 yoyo" is much easier to predict than for
135 Hudson Street #6F. Dollars to donuts, the price will rise by exactly $1,000 next Monday, or the Monday after that.

motivating buyers, but in what direction?
When I talked about death-by-small-increments (above) I was thinking about the seller (and agent) being motivated to drop the price meaningfully motivate buyers to think now is the right price, while running the foot-shooting risk that buyers will instead conclude if I just wait, the seller will drop again (and again).

Insofar as it went, I still think my analysis is correct - that anyone interested in #6F at 135 Hudson Street may well think that the seller will drop another $50,000 off the price if they don't sell in a couple of weeks. Instead of (now) waiting, that same buyer might have bid earlier (and higher) if the first price drop had been $150,000.

(Of course this is hypothetical, but my experience tells me I am right; one of the nice things about having a blog is you get to make your own assumptions. Heh-heh)

not motivating, but attracting
I hope we can all agree that it does not matter what the initial price of the "$1,000 yoyo" is for purposes of these discussions. $1k is a per se trivial price change, one that is not going to change anyone's motivation to buy whether the change is an increase or decrease.

(In fact, the "$1,000 yoyo" is a terrific exemplar for my analysis because the initial asking price was $8,250,000. $1,000 is per se trivial. The "$1,000 yoyo" is Penthouse AB at 120 West 29 Street, by the way, but the same agent has done the same thing at slightly different levels [at plus-or-minus $4,000, $4,000 and $5,000] at three other listings this week.)

lazy agents might notice?
Changing the price of a listing incrementally increases the chances that it will be noticed by an agent who had not noticed it before, which I thought was a stupid reason for making these serial trivial changes.

But maybe that is not the intent.

With the increasing use of websites like StreetEasy or Trulia by buyers, buyers who pay attention to listings with price changes are much more likely to notice the listing for Penthouse AB at 129 West 20 Street with the cheap yoyo pattern than they would if the price had stayed at $8.25mm for three months.

I am not saying that the $8mm buyer will be more likely to bid a yoyo, but s/he might. I may have to re-think this specific scenario.

So long as the yoyo works in both directions, there may be enough value in it to justify keeping two sets of marketing materials (are we in a plus $1k week or a minus $1k week??). But if the price dropped $1,000 a week each and every week, week after week, I personally would suggest waiting for that $8.25mm price to come down. In a year or two you might have a deal....

by the way
I think I have to identify the listing to make a credible point here, but I am not suggesting this agent is doing anything wrong, and I generally try not to appear to criticize another agent. It is - to me - an interesting topic. So interesting, in fact, that had I written this post when I first noticed the yoyo pattern, I had not yet realized that this technique may be valid for the StreetEasy crowd; I thought (and continue to think) it is a waste of time for the lazy-agent crowd.


© Sandy Mattingly 2007


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

Recent Posts

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