March 25th 2014
The New York Times
After a seemingly endless winter, the first hints of spring have teased us with a day or two of temperatures over 60 degrees. That fleeting glimpse of warmth sent many New Yorkers flying out of doors to enjoy the sunshine. For my part, I sipped my morning coffee at home last week and stared wistfully out the window at a neighbor’s balcony.
In our concrete jungle, there is a hefty dollar value attached to having your own garden oasis — even the smallest of shrubberies carries a price tag. And with so many residents suffering from a vitamin D deficiency these days, brokers are promoting listings that can claim specks of green, even if they’re barely large enough to hold a bonsai.
Yet there are some listings for which the warmer weather was made.
Downtown, the average price of a luxury condominium with a terrace is $8.3 million; that compares with just $6 million for those without terraces, according to Vanderbilt Appraisal. And developers are doing whatever they can to take advantage of that pricing edge.
The building at 56 Leonard Street in TriBeCa, for example, is a series of stacked boxes designed to allow nearly every unit an outdoor space. In the West Village, the developer of 150 Charles Street created several setbacks that feature enviable terraces. And at Walker Tower, the Chelsea conversion where prices have broken several downtown records, a unit that has a terrace is selling for a premium of more than 40 percent over comparable apartments without outdoor space, according to Vanderbilt.
The demand for outdoor space has grown so strong that in some instances, prices have exceeded the industry rule of thumb, which places outdoor space at 20 percent to 50 percent of the price of the interior square footage. Some terraces are trading for as much per square foot as the interior space, or even more.
Rebecca I. Edwardson, an associate broker at Warburg Realty, created a database of several thousand apartment listings with terraces and rooftop gardens precisely because putting a price on outdoor space can be such a tricky endeavor.
“There are so many variables, most brokers don’t know how to price outdoor space,” she said. “They go into an apartment and say it feels like $5 million, but they don’t have any data to back that up.”
According to her research, up until last year, these spaces sold for roughly one-quarter to one-third the value of the interior space. An apartment priced at $1,000 a square foot, for example, would have a terrace valued at $250 to $330 a square foot. She has found, however, that among the new luxury condominiums going up across Manhattan at a quick clip, the price for outside space can rival the price of the interior space. At the recently completed 200 East 79th Street, for example, Ms. Edwardson estimated the value of a nearly 700-square-foot terrace at more than 100 percent of the value of the interior of its high-floor apartment. (For co-ops, she found that terraces remain priced at one-quarter to one-third the value of the interior space.)
One major reason for these price increases, Ms. Edwardson said, is that “a terrace buyer is an uncompromising buyer,” willing to pay more for what he or she wants. Many of them are foreigner buyers who see New York as a bargain, compared with cities in Europe and Asia.
Ms. Edwardson was recently involved in the sale of a terrace property over which there was a fierce bidding war. The eventual winner was a foreign buyer who bid 30 percent more than comparable units were selling for. “I asked him why he bid so high,” she recalled, “and he said, the way he was looking at his finances — he is worth over $100 million — was that Europe was less of a safe place than New York and America, so he was shifting his assets here. And for him, to pay a little bit more in New York was actually a good bet, compared to what he would be paying in London or Hong Kong.”
But not all outdoor space is equal. Like so much in this city, there is a hierarchy to heed. On the lowest rung of the ladder is the balcony, typically a cantilevered concrete slab that hangs off the side of a building like a jutting lip; it is used more for bike storage than sunbathing. On the highest is the terrace, usually tucked in a building setback so it opens to the sky, and large enough to host a summer barbecue.
Among terraces, the most sought after are directly accessible from the living room and have both helicopter views and privacy from the peering eyes of neighbors. Shape is also an issue. Wraparound types that stretch across more than one side of a building and offer multiple exposures are considered prime, followed by the square shapes that perfectly suit a dining table. And finally, there are the rectangular slivers that can barely hold potted peonies.
Then there are other kinds of outdoor space: the rooftop garden is loved by some, although it is considered a notch below the terrace because of the inconvenience of having to walk up steps, while maisonettes offer ground-floor gardens that can be large but are often too dark, shadowed by the tall buildings that surround them.
Although some buyers may have bottomless pockets when it comes to outdoor space, you can’t help but wonder, is it really worth it? When I was having that morning coffee last week, staring at the building across from me stacked with balconies, I noticed that several of them looked rather abandoned. In fact, the balcony nearest my window has spent the winter filled to the brim with an enormous pile of garbage bags stuffed with what appear to be clothes, along with a rather sad painting that has been warped by the deluge of snow.
Like so many symbols of wealth, it may be more in the having than in the using. At developments like 215 Sullivan Street, a Greenwich Village condominium built on the site of a preschool run by the Children’s Aid Society, owners don’t even have to care for their outdoor space. “Imagine having your own lushly landscaped backyard and you don’t even have to worry about the gardening work!” materials pitching the building read.
The developer of 215 Sullivan Street hired Edmund Hollander, a well-known landscape designer, to create the outdoor spaces — roughly 60 percent of the units come with terraces or gardens — and spent “in the millions of dollars” to plant 25-foot adult trees and create lush floral arrangements that will be maintained by the building. “When a buyer comes to look at the unit, and they see that you have spent the time to finish it, it appeals,” said Raymond E. Chalme, the chief executive of Broad Street Development, the developer, “and when you are looking for $3,000 a foot, that is important.”
With many of these new condominiums reaching skyward to unfathomable heights, there is also the question of whether you would really want to sit on a terrace 50 stories above the pavement. Recently while I was touring a penthouse in a 50-plus-story tower, I was too frightened even to approach the windows, let alone step onto the spacious terrace. With no point of reference outside except for the clouds, it gave the impression of being suspended in midair.
Yet Rupert Murdoch, the billionaire chairman of the News Corporation, recently paid more than $57 million for the top four floors at One Madison, the new sliver of a tower on Madison Square Park. It is unclear whether he will actually ever live in the home and make use of its wraparound terrace, but it is crystal-clear that a mere mortal like me is not the target for such properties.