105 Mercer TH

105 Mercer is a 25x19 floorplate x 4 floors = 1900 gross square feet. On a commercial street with Belgian block. Few interior historic details. Somewhat odd layout with only a single true bedroom.

Nearest comps would seem to be these:

249 Waverly Pl: https://streeteasy.com/sale/1375497

Sold during covid for $3.9M. 2800 gross square feet or $1393/ft plus roofdeck. Similar floorplate but 2 feet wider (which makes a huge difference) and has windows in the rear (also makes a big difference). A+ location at Waverly & Bank across from Waverly Inn, very quiet street, townhouse block, good historic details. Higher taxes by $12,000/yr. To me this feels like a better house in basically every regard, unless one strongly prefers SoHo to Waverly & Bank.

138 Beekman Pl: https://streeteasy.com/sale/1348110

Modern house in a historic district. Sold pre-covid for $3.075M. 18 x 25.5 floorplate * 4 floors (one of which is a garage) + roofdeck = 1843 gross sq ft or $1668/ft. Mirror house next door (at 136) is having trouble selling. Lower taxes. On a quiet Belgian block street. High flood risk.

57 Sullivan St: https://streeteasy.com/sale/1344856

Similarly historic house, closest to SoHo. Sold pre-covid for $5.2M, 3864 gross square feet including a back yard (which I think is quite valuable), or $1345/ft. Exposed to 6th Ave traffic. Excellent restoration, functional layout. >20 feet wide. Very low taxes (less than $1000).

If I consider that the comps are trading around $1300-1500/ft (mostly pre-covid), that would put 105 Mercer at $2.4-$2.8M minus a covid adjustment. It’s listed at $4.4m. What am I missing? Is there really such a SoHo premium, even compared to one of the best locations in the West Village?

Nice graffiti. I wonder if it's worth buying simply for the Rezoning play.

What is real square footage of 57 Sullivan ex basement? But let us include the garden 260 sq ft.

All the comps except Beekman have below grade space. 57 Sullivan has an English basement and the garden. For 249 Waverly and 105 Mercer I counted the basements as full square footage not half. It still wouldn't make much difference.

If I wanted to be generous, I could comp it to 41 Barrow, which is a jewel of a townhouse with original floors, townhouse block, functional layout, small outdoor space, 3 actual bedrooms. Downsides are no roof deck and traffic from 7th Ave. Traded precovid at $1960/ft, which puts 105 Mercer at $3.7m. Still that feels very generous since Barrow's square footage is superior in pretty much every way. So it puts 105 Mercer maybe around low 3's on a good day.

https://streeteasy.com/building/41-barrow-street-new_york

Personally I don’t like small foot print townhouses. Usable space is very small due to stairs and exterior walls. More that 3 floors ex garden is too many without elevator.

I think you have to make some subtraction for not even having rear windows.

Although there is enough experience to put a dollar number on it (at least that I know of) that huge Citibike rack directly out from would be a big negative for me.

Sorry - Isn't enough.

Small footprint townhouses with no back windows, no garden, and Boris Bike racks out front can and should trade at a discount. But there is a market amongst people who want to be downtown and not in a shared ownership situation. I just don't see how or why this one is worth anything more than its 2008 price. All I can surmise is that people so strongly prefer SoHo to the W Village, which I just can't wrap my head around.

Just like with 57 Sullivan, a property that we showed a couple of times, which was initially priced significantly higher. Sellers can test the market, if they can afford to. In my experience, a buyer that wants to be in the West Village is not going to want to be in SoHo and vice versa.

This looks like a "make me move" price. With low taxes the owner is probably prepared to carry it indefinitely and see what happens with the Soho/Noho zoning chatter.

I like townhomes (spend much of my NYC tenure in them) but I'm accustomed to wider layouts. It's a nonlinear thing -- some interior fixtures can be squeezed to feel natural, but stairs don't shrink proportionately.

Agree that Waverly is in a whole different tier of desirability. If not for the flip gamble, this one would be lucky to fetch half as much.

@George nice analysis.

My initial thoughts are that the value here lies in the potential ability to redevelop this site in the future (reminds me of a call option). Because the current layout is poor, the renovation looks superficial, and the property appears to need a LOT of work. I have no idea what would be allowed.

As a buyer, could I spend an extra $1-2 million to completely redevelop this property, adding floors and dramatically improving the layout? Could I spend $50 million to build a larger building?

Because in its current state the $4.4 million looks overpriced especially because I would probably need to spend $$ just to maintain its current 1-2 bedroom, subterranean kitchen layout. Let's say I could re-develop the site, everything becomes much more compelling.

Location is very appealing. Those classic views are killer, and I am sure there is great appeal for owning a townhouse in this location.

You can't spend $50 million to build a larger building here because the elevator shaft and code-compliant stairwells would take up all the usable space.

You make your money by selling to a developer in a package deal with 101/103 Mercer once rezoning happens. Until then, you wonder why the current owner doesn't just do that himself.

This is landmarked, so you can't change the look from the street - no added floors. Would rezoning change the landmark designation? (I doubt it.) Seems the only value-added play would be merging the floors behind the façade.

Otherwise I guess they're hoping to find the one buyer out there who loves SoHo and nothing else, loves townhouses and nothing else, and will overpay for it. Feels like a small intersection of the Venn Diagram, but they only need one person.

To Kevin's point, I note that ALL the comps I gave had big price reductions before selling. Waverly sold for $1.1M less than its last selling price and $2.1M less than original ask.

George, Still lusting for those townhouses? Or just entertainment?

Entertainment at this point, though I'd give $2 million for this place. Otherwise I blew my real estate load in Nowhere. I would not buy in NYC until after we know whether the next mayor will be competent. (There is always the wild card of Sleepy Joe reestablishing the SALT but not the AMT and giving a massive financial bailout to NYC - both of which I'd say are reasonably likely at this point.)

I think we'll be the last generation to use the term "carriage return" :)

Ha. I have not used that word for 30 years but know what that is. George uses some old English words.

I feel that at a minimum George studied in London. I have a few years on George and not even my generation uses “carriage return.” Maybe “return” once in awhile, but the addition of “carriage” strikes me as markedly British.

I also like how Keith is still Kevin in George’s mind.

I studied abroad in the UK, where I knew one Kevin Burkhardt.

As for old Britishisms, there are many that I use regularly, including: merchant banker (a wanker), Belindas, pear-shaped, bloody, queue, trouble and strife, chuffed, knackered, chav, toff, cheeky, craking, can't be arsed, arse over t!ts, tosser... I'll try to use more here.

And aside from all this...
I've information vegetable, animal, and mineral,
I know the kings of England, and I quote the fights historical,
From Marathon to Waterloo, in order categorical;
I'm very well acquainted too with matters mathematical,
I understand equations, both the simple and quadratical,
About binomial theorem I'm teeming with a lot o' news---
With many cheerful facts about the square of the hypotenuse.

Hopefully those cheerful facts will make up for constantly calling Keith Kevin.

The cheerful and bucolic life

When the enterprising burglar's not a-burgling
When the cutthroat isn't occupied in crime
He loves to hear the little brook a-gurgling
And listen to the merry village chime

For anyone who is not a Gilbert and Sullivan fan, picture George singing: https://www.youtube.com/watch?v=Z2OcbeGqbpU

I could more picture this:
https://youtu.be/TW_Ukl71OH4

I suspect I would be on George's list; nevertheless, I have a soft spot for him because he reminds me of home. There is something primal there. One of my oldest friends who laments my departure from that world once was reminiscing about how great the "old days" of his father's and grandfather's generation were. I told him they were not so great for women, and he said, "Yes, especially women like you. I am pretty sure you would have been burned at the stake."

Speaking of townhouses we got a nice mention in brownstoner:

https://www.brownstoner.com/real-estate-market/brooklyn-open-houses-prospect-lefferts-gardens-bed-stuy-cobble-hill-park-slope-historic-districts-103020/

Looks haunted.

It is Halloween