Amazing

Nice find. It looks like a combo, with 6A purchased in 2000 for $800K and 6R in 2006 for $2.5M. They’ve been trying to sell it since 2015:

https://streeteasy.com/sale/1150508

$10M ask => $4.5M ask…. Seems more plausible now?

On the whole it's awful.

I would say the current listing price at a +/- 50% discount on price per sq ft compared to other Mercantile units reflects the defects in this unit. The problem is that listing discounts don't cure the $85k per year monthlies. If not for the ridiculous ask in 2016 when the monthlies were 25% lower they might have gotten this sold. Instead, they renovated it, and now seems like they might at best get their purchase price+reno costs back.

On the bright side, at $4.5M it looks like an absolute deal relative to $4M for half the combo a floor below:

https://streeteasy.com/building/chelsea-mercantile/5r

The combo makes it a real tough sell. At $2.25M w/ $3.7K monthlies, you can see someone making the tradeoff between 1500 sq ft w/ windows vs. 2200 sq ft w/o light. At $4.5M w/ $7.5K monthlies, almost everyone would opt for 3000 sq ft w/ windows over 4500 sq ft w/o light.

For the most part I tend to agree with you regarding what one would opt for given the choice; windows over square footage. That said on a price per square foot basis the monthlies are on the low side, combined about $1.73 a square foot.

I've had the type of client that buys a unit like 6A. Someone who needs/wants to be in this location, values space over light, it's a pretty massive home.

Because of the configuration you definitely lose a large percentage of the general 3/4 bed buyer pool. But I think you will find that right fit that looks at the low monthlies, requires all that space for various reasons and is maybe even a little cash heavy.

This will sound like heresy to you, but a buyer that will pay cash and then be able to live in a 4400 square foot home for $7,500 a month, ignoring the opportunity cost. Or somebody that puts 50% down... Sort of achieves the same result.

Just pointing some of the types of buyers I've worked with, not necessarily whether or not I think it's a good idea or judging the space.

We assisted a buyer with a purchase that's sort of matched what I described above. They sold a company and were left without a significant income, put a nice pile of cash. They paid all cash for a loft in Chelsea that had relatively low monthlies and was actually an HDFC home, and was discounted because of this. It just worked for them. I personally told them I wouldn't buy the property, he laid out a pretty good case why it worked for his family.

While individual needs and preferences differ, it is much easier to sell a 1800 sq ft 2br (1 interior) at $2.7mm than a 4br (2 interior) 3600 sq ft at $5.4mm.

And that 5R would be lucky to get $3mm.

No argument from me on that 300.

@Keith.. For that sort of buyer profile wouldn't #PHC or #10X makes more sense.. Low monthlies around 4Kand still a lots of usable space? The fact that this was a combination unit has worked against this listing by increasing the common charges since the split doesn't seem to be based on sq ft but rather evenly among most units!

The reason these other two units wouldn't fit the profile buyer I reference is primarily because unit 6A gives you an extraordinary amount of square feet at a relatively low price per square foot.

The buyer that I'm talking about needs / wants that 4,000 ft, however, couldn't afford to pay $1,700 to 2,000 plus per square foot for it! 6A is trading at just over $1k a square foot.

Great place for a vampire or a very rich person on a tight budget.

Some buildings should never have been converted to residential.

At some point, if you really want useless space, you should buy a townhouse with a sub-cellar. A unit like this picks up a ton of the cost of the entire building. It would be cheaper to hire a property manager for your townhouse and not pay the outrageous commons.

The ability of brokers to lie about things like bedroom count is amazing. In the securities business, if you misrepresented something like this, you'd be banned for life and your firm would risk being closed. It's a shame that realtors have neither a code of ethics nor any enforcement mechanism when they lie. Another reason never to trust a real estate broker.

Indeed.
“A unit like this picks up a ton of the cost of the entire building.”

For brokers, I am surprised that more people don’t complain to the licensing board specially for a condo where the bedroom count is listed in the offering plan. There is indeed an enforcement mechanism.

NYC is unique with these types of 'loft' spaces especially in Soho and Tribeca. Streeteasy and the RLS needs a better way to list such properties, there is a market for such homes, obviously as this is owned by someone and it will sell to someone else. I would not quite equate listing a 4300f2 foot condo along with its floor plan and photos as the same as securities fraud. But I agree at the very least the agents should start the description off with these are non-conforming sleeping/office areas. But ultimately we need an acceptable and transparent way to list these type of homes so that buyers who are interested can find them.

@george I could say the same about lawyers, financial planners and candlestick makers, some are liars, cheats and others not. How many people have been scammed big time by money-managers, stock brokers/financial planners and lawyers etc, Tom Girardi anyone, Madoff etc... People are rotten for whom they are, not what profession they are in.

And it is very easy to file a complaint against a real estate agent via REBNY or the Dept. of State, it takes about 5 minutes to file a formal complaint.

To Keith’s point, How many money managers who invested in sub-prime (while claiming to do full independent due diligence of what they invested in but in reality simply relied on rating agencies) suffered from lawsuit or SEC investigations?

If realtors didn't blatantly lie about square footage, floor area would be a way of searching for large lofts with room for an atelier or whatever you use the interior rooms for. An equivalent of the Loi Carrez would fix this by standardizing measures of usable space (and telling everyone they have less than they were sold -- better to pass the lie to the next buyer).

But that's not the issue here. This is listed by Compass with "bedroom" clearly indicated on the floorplan for rooms that have been deemed unsafe for sleeping due to lack of multiple egress points. Clearly Compass isn't worried about compliance or losing their license for misrepresentations. Complaining to Rebny is like complaining to Bernie Madoff that his Investor Relations team is lying. Again, if other licensed professionals behaved this way, they would be thrown out of a job.

George, How about you file a complaint with the State Licensing board as a test case for this one? I would love to find out what they do.
I am guessing most people don’t file a complaint as it is a “real property” and they can see for themselves and have lawyers to advice them before they sign a contract. Clearly it lets a lot of inefficiency in the system remains as people choose not to complain to the licensing board.

They could solve a lot of problems by calling them bonus rooms.

New York City is just a very 'unique' place. People put up with a lot to live here and always have. Funny things I've seen as a broker: oversized walk-in closets used as a nursery. A large storage area above a closet in an apartment in Tribeca, bedroom for the nanny. This one actually shocked me!

Unique or not, there are very good reasons that bedrooms must meet certain requirements, just as there are specific requirements for ground floor / cellar 'living spaces', as any number of people in Queens discovered too late last month.

I could see the AG's office filings charges of widespread fraud and misrepresentation against any brokerage that has consistently mislabeled 'bedrooms' on their floorplans (despite the disclaimers attached to the floorplans). Given the potential liability, I'm surprised the brokerages aren't doing better self-policing.

As no one seems to actually complain to the authorities.

I have never had any luck complaining to any government authority about anything. Most government agencies in NY State seem about as impotent as a Nevada boxing commissioner. Not much point, just caveat emptor and hope your illegal bedroom doesn't flood or catch fire.

Good luck with this

I'm assuming the investment bankers and other professionals you reference being de-licensed for bad behavior would come via a government agency?

I had a friend who got caught up in a dispute with a rental property. Somebody filed a complaint against the owner with the department of State, and it was pursued very aggressively and thoroughly. They sent a field agent out to interview him, and then he had to appear before some sort of judge.

My own personal experience with government regulators, if that's what you call the AG's office. I was interviewed by the New York City attorney general's office. I think someone had filed a complaint about brokerage companies having fixed commissions or something. I was very impressed with the attorneys that interviewed me on two occasions for at least an hour each time. They took this extremely seriously. The second time was to make sure none of the larger firms or other agents were interfering with my business practice, since they felt it was one that was very beneficial to consumers. And recognized that it was disruptive to the traditional models. I still have the attorneys direct number and I was instructed to call him if I ran into any problematic behavior.

Keith
TBG

So I just received a call from a seller wanting to list a 2/2 condo. After looking at the floor plan I see that the second 'bedroom' is a 10x13 interior room with no closet, HVAC or window.

@george are you setting me up : )

In case anyone's curious we will be listing this as a one bedroom. Although the agent that last sold it listed it as a two bedroom two bath with notes in the listing description.

Let me guess. In one of the FIDI buildings?

No, East Village. Also has a 500 ft private terrace, up one flight.

6A is in contract. So there is indeed a buyer looking for a lot of space at good price.

They found that right buyer that I was talking about. Definitely doesn't surprise me.

For the record: The bedrooms without windows are not unlawful living/sleeping quarters because of a “lack of multiple egress points” as was stated earlier. Windows on floors above the first/ground floor are not considered a means of egress in the lawful sense, whether or not a fire engine’s ladder can reach them. The rooms are unfit for living/sleeping because they lack operable windows of the necessary size and with sufficient distance from property and building lines. The habitability issue with interior rooms is light and air - not means of egress.

The point at which two means of egress are required in a fireproof multiple dwelling such as this one is at the front/entry door of the apartment.

$4.4mm.
https://streeteasy.com/closing/10905090