February 5, 2018 Real Estate

First, some background for those of you new to Taylor Swift’s real estate holdings on Franklin Street: She owns the 8,300-square-foot penthouse atop 155 Franklin (combined from two units), and last fall, she bought the three-story townhouse next door at 153 Franklin. Now, someone has dramatically overpaid for another apartment at 155 Franklin—and the evidence points toward the musician. It’s far from conclusive, however, and you’re going to have to follow me into the weeds.

“The second-floor front apartment [#2N] sold to an LLC for $9.75 million in an off-market sale,” emailed A. “That’s at least $4 million more than other apartments with the same footprint—and it didn’t have any updated finishes. So could Taylor Swift have bought this apartment as well? And she’s going to bust through the wall of the townhouse? And that will be how she goes from her penthouse to the garage at 153 Franklin? It’s the only thing that I can think of that would explain the super-high price.”

The LLC that bought 153 Franklin is Euro Tribeca LLC, while the LLC that bought #2N at 155 Franklin is 2n 155 Franklin Street LLC. Both have mailing addresses of 111 Eighth Avenue, 13th floor—an intriguing overlap, but that could just be the office for a company that organizes LLCs.

So I ran it by the reader known as James, who has far greater proficiency with city records than I do. “The deed for #2N lists the buyer as Russell C. Moore, but ACRIS has nothing more on him. New York court records don’t show anything, nor does the New York State attorney directory. Google didn’t reveal anything current to me about this name, with or without Taylor Swift.”

The New York Post only discovered Swift’s townhouse purchase because Euro Tribeca LLC “is linked to Jesse P. Schaudies, a lawyer who works for Swift’s management firm and who represented her on past real estate purchases.” Perhaps her team has grown smarter about covering its tracks. Or perhaps this was all a wild goose chase. Still, that $9 million price was just too high….

On his Manhattan Loft Guy blog, Sandy Mattingly has proven he’s an expert with comps. Was there anything in his experience that could explain the purchase of #2N? “Somebody overpaid for #2N, so it is rather intriguing,” he wrote. “The logical problem with your correspondent’s approach (‘It’s the only thing that I can think of that would explain the super high price’), however, is that people with way too much money do things for their own idiosyncratic reasons (and because they can), without regard to whether an outsider would agree about their reason. Frustrating, but it happens all the time. Typically (but not exclusively), a Very Rich Person overpays for a property because they want it badly and have the resources to get anything they want. The owner says, ‘I don’t want to move,’ and the VRP keeps throwing money at the owner until, ‘OK, OK.’ It can be easy to see this dynamic when a next-door neighbor (or upstairs or downstairs neighbor) needs more space. They usually don’t overpay by 50% (#2N sold in 2013 for $5.87 million), but if they can, and if they have to, they might. But that doesn’t seem to be what happened here. (The #2S owners have not hidden behind LLCs before.) If it is Swift who bought #2N, maybe she has more use for space than any human should, and #2N was the only neighbor who would deal with her, and $9.75 million was what was needed to solve her problem. (If so, it is likely that all her 155 neighbors know the story.)”

Alas, the only reader I know of at 155 Franklin has moved away. I was about to back-burner the entire matter when James emailed again….

“Here’s something I read in the deeds that, if it is not mere coincidence, does point to Swift being the ultimate owner of #2N. A notary public (and attorney) in Rockland County, N.Y., named Joy Diviny was the c/o name and address for the Real Property Transfer Report on the 155 Franklin penthouse deeds to Taylor Swift’s LLC. Joy Diviny also notarized the grantee’s signature on the smoke detector compliance affidavit attached to the deeds for both penthouse units to Taylor Swift. Joy Diviny also notarized the grantee’s signature (“Russell C. Moore”) on the smoke detector compliance affidavit attached to the latest #2N deed. It seems a rather odd coincidence that two unrelated buyers in this expensive building would use the same Rockland County notary public on their deeds, doesn’t it?”

It certainly does. My husband pointed out that the building could conceivably require the use of a specific notary, but Diviny doesn’t appear on other recent transactions.

The question, then, is why would Swift buy #2N? Both James and Sandy pooh-poohed the notion of breaking through from 155 to 153. As noted here, 153 Franklin doesn’t have a garage, and even if it did, connecting the two buildings would be a royal pain. “While anything is possible,” wrote James, “the Building Code requires a fire separation between buildings. You cannot have unprotected openings between two buildings below the roof. This theory requires an alteration that is not a clean, as-of-right job. A lot-line door could be protected, and some such doors exist or existed in Tribeca, but the Department of Buildings now might not approve it as it would approve a lot-line window—even if the area of existing lot-line windows is less than (the as-of-right) 10% of the area of the east wall. Regardless of whether such a door were deemed an egress, an easement would be required by the DOB between the building condos, not just individual affected unit owners, and Swift may not have enough shares or cooperative neighbors to get the approval of the 155 condo board. (I doubt the two buildings share a party wall, so the simple option of a party wall easement is likely unavailable.) Any such easement would have to be recorded and thus eventually available on ACRIS.”

Sandy, meanwhile, added this: “No rational board would approve this because they would lose control over who enters their condo. (Anyone in the townhouse could get into #2N, under this hypothetical arrangement.) Maybe they see some benefit (Swift pays everyone in the condo?) and maybe the condo is comfortable that key-locked elevators provide sufficient security in each condo. Not to mention, this is a rather complicated arrangement to put together. Did she just spend $9.75 million on the chance she can get this approved by her neighbors (and the DOB)? Or, maybe she has already gotten the condo paid off. Possible, but it seems to me unlikely. If so, everyone at 155 knows the answer.”

The likeliest answer is probably that Swift simply wanted more space, for whatever reason—staff, guests, offices, a recording studio, who knows. And yet Sandy did throw out another possibility…. “If it is Swift, here’s a wildly speculative notion.” Pause for a second to absorb that. “She did something (renovating the townhouse, perhaps) that really pissed off the #2N owners, who were prepared to sue her. To avoid that, she ‘settled’ with her neighbor by buying the loft. There would be a separate agreement, not filed publicly, and the #2N seller gets favorable tax treatment for the income (long-term capital gain), with a (small) risk of being audited because the price is artificial. If there’s a scenario like this involved, no one not directly involved should ever know (though scuttlebutt at 155 may know). If somebody else in the condo tries to sell soon, any weird Swift arrangements with the condo board would have to be disclosed to a potential buyer, so that may be a way to (eventually) find out if there is any weird deal.”

If anyone out there has more information, inquiring minds want to know—and anonymity is guaranteed. In the meantime, if Swift did buy #2N, here’s a rundown of the total money she has spent on Franklin Street (that we know of): $19.955 million for the 155 Franklin penthouse, $18 million for the 153 Franklin townhouse, and $9.75 million for 155 Franklin #2N. That’s a total of $47.7 million. Then again, Forbes estimates her net worth at $280 million.

UPDATE 2/6: The New York Post says “sources confirmed” that Swift is the buyer, but there’s no venturing a guess as to why (or why she paid so much).