Jul. 10, 2006 - “I may not use it, but I really want it” / what Manhattan terraces and balconies are worth
Who wants a terrace? (hint: everyone)
The Times is right:
“The funny thing about private outdoor space in the city is that some people who have it use it, others don't, but most people seem to want it regardless and are willing to pay extra for it.”
“Everybody” wants it, yes, except for some families with small children and those of us afraid of heights (both of whom shy away from balconies). And nearly everyone who wants it is willing to pay for it.
But who uses it depends, in large part, on whether the outdoor space is a terrace (on top of a building setback) or a balcony (literally extending from the building exterior wall), on what floor they are on, and on whether there is a lot of vehicle traffic nearby.
Terraces are generally larger than balconies (often by a large degree), and generally feel more secure. Because they are only where the building has setbacks, there tend to be fewer of them than balconies, which can hang off a building in as many columns as a developer wants.
Expensive storage space
My personal observation is that if you could look across at a line of balconies, you are very likely to see many indications that they are used rarely, if at all. You will often see bicycles, dead plants, dirty plastic patio furniture, and rusty barbecue grills or hibachis. You will see more live plants, and more clean furniture, and fewer ‘storage’ items on higher floors, and on balconies that are (relatively) protected from traffic noise and soot.
The data that most surprised me in the Times article was to how common outdoor space is, although commentator and smart guy Jonathan Miller is quoted with data showing they are trading less often than they had been.
One in ten coops or condos has outdoor space? Really??
Only 10.9 percent of all residential sales in Manhattan last year included units with some type of private outdoor space, down from 14.4 percent in 2000 and 18.3 percent in 1995, according to the appraisal company Miller Samuel. "The drop suggests that the properties with outdoor space — more likely large space like terraces and gardens — have a longer holding period and do not turn over as often," said Jonathan J. Miller, the company's president.
Big value, no surprise there
Commentator (smart guy) Miller provided the first hard data I have seen about values, though the data is hidden behind the “typical” label.
Just how much of a premium buyers can expect to pay for a patch for earth (or concrete) will vary greatly. Typically, apartments with private outdoor space get an extra 25 to 50 cents on the dollar per square foot, Mr. Miller said. (So at $1,000 a square foot, the average price of all Manhattan apartments right now, a 400-square-foot terrace could add as much as $200,000 to the price tag.)
I do not believe that there is “typical” outdoor space, but the range given (25 to 50 cents per dollar per square foot) is wide enough to include a wide range of spaces.
The Times provided one concrete example, a building I have not seen.
At the Atelier, a high-rise going up on West 42nd Street, a one-bedroom with a terrace starts at around $820,000, versus $770,000 for one without a terrace; a two-bedroom with a terrace starts at $1.305 million, versus $1.145 million without, according to Elad Dror, residential director for the Moinian Group, which is developing the 46-story, 478-unit condominium.
© Sandy Mattingly 2006
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