The landmark townhouse at 262 West 139th Street really tested the Strivers Row Historic District's selling cache last year. The middle class stronghold on the block designed by famous architects McKim, Mead and White definitely had a certain appeal in the fickle Harlem brownstone market but how high could one of the properties go for? It all started out in 2005 when the two family brownstone was bought for the the selling price of $850K. Fast forward two and a half years to August 2007 and one of the most classically designed and up to date townhouses appears on the market for a whopping $4.2 million asking price. Six months later, the price would be reduced to $3.95 million in early 2009 and by the middle of that same year the house would have its final price set at $2.25 million. So how much did it finally bring in? The public record has the property selling 15% under asking price at $1.85 million as of this past December. Not quite the rags to riches story the investor probably expected but seeing that they placed a good $400K or so into the property, walking away with 600K isn't the worst scenario in today's market. Read more about Strivers Row in our past post: LINK. House Photo by Ulysses
How do you get a renovation cost of $400K? I don't know the original condition, but I've been through that house and would be surprised if they spent less than $800K and wouldn't be surprised if they spent well over $1M. That place was gutted, reconfigured and everything was of the highest quality. And then add to that the carrying cost of all that money for that length of time (I'd guess about $200K), and the $111K they had to pay the broker to sell the place and the owners lost a decent amount of money.
ReplyDeleteWe're in contract on a townhouse shell in Central Harlem and will be spending considerably more than $400K on the renovation. I can say pretty conclusively you don't get a renovation like 262 W 139 with $400K.
Much as I adore Harlem, $4.2 million was a greedy dream. $2.25 million would have been a nice price.
ReplyDeleteYou can get a townhouse on the Upper West Side, far Upper East Side or East Village for $4 million.
ReplyDeleteAs far as renovation costs go it is very hard to estimate, and like all things New York, the same end product can cost 1x 2x or even 3x depending on various factors, like if you are in the business and know how this is done versus new to this and at the mercy of contractor quotes. So it is hard to put a definitive number on the actual construction costs but safe to say that one home owner could easily spend a seven figure number and another a fraction of that with the same end result.
ReplyDeleteIs this Brett Wright's place?
ReplyDeleteWe went to Striver's Row for the first time recently. Couldn't believe there was anything so interesting in Manhattan. There is a private street behind every house and the architecture is amazing. The house seems like a steal to me. If I had the money I'd have bought it in a minute. The nearby City College campus is a real treasure with it's neo-gothic buildings. It's a must see.
ReplyDeleteStrikes with me that this was more a kin to a "short sale" if anything and I highly doubt the developer profited one penny, could have easily lost money when the smoke clears. I've come across a number of "Mom & Pop" developers in Harlem that jumped on the band wagon a tad late, buying in late '05 & into '06, spending 12 - 18 months renovating...however by the time the renovated Bstone/townhouse hit the market, the market was gone along with the financial fuel that created the run up. Asking $4M hints to the delusion of the developer and how their business model was relying on the continuation of low bar irresponsible lending to all those with a pulse by the mortgage markets. Unfortunately for the developer the "Greater Fool Theory" is a construct of the past, dying in '07 in Harlem.
ReplyDeleteMom & Pop developers have their payments to the bank to make too....and cannot wait out a market that might take 10+ years to return (and that might prove too ambitious). Many have turned their renovated Bstones & Thouses into Corporate Housing (Rental) and not to all out rentals as a strategy to avoid getting into long term commitment as a landlord to potentially long term tenants. This a means to generate cash and make payments yet not settle into the model of long term commitment as a landlord. Others, like the one in this blog entry above, simply see they were late to the party, have their payments to make too, fold their tent and get out, hopefully still with their shirt, but no profit. Considering time, fees, lost opportunity being tied up with this situation above? This was a money loser all the way....
If anything this is more about over renovating. This townhouse looks better than anything on the upper east side or the west village but spending hundreds of thousands on the best doesn't always translate at the end.
ReplyDelete1. Houses on the South side of the street are not McKim,Mead and White, they are Bruce Price and Clarence Luce.
ReplyDelete2. No this is not Brett Wrights house, his was a modest renovation completed many years ago.
3. The only mistake the developer made was falling in love with the project, pouring in his heart and soul.
4, The brokers kept chasing the market instead of getting in front of it.
5. The buyer ended up being a snake lawyer, he and his broker played every game in the book to ware the seller down until they had no choice but to sell for such a low price.
In life they say what goes around comes around, today buyers and brokers are doing and saying unthinkable things to get buildings, but the bad karma will get them in the end, I think the world has gone mad over money.
Looks great ,but I hear you can hear the new owner sneeze- yuck! My family has lived in our Harlem townhouse original plaster walls,detail for generations- they built them right years ago, we don't hear our neighbors business. 262 renovation cost over $800,000, if you want to pay that to live in a plaster board box that will slowly fall apart over time, this contractor is willing to take your money. We watch people come into the area and rip the heart and guts out of these brownstones-what is their relationship with the historic value of our past,none.
ReplyDelete