February 1st 2014
Mann Report Residential
Having built an exclusive database of nearly every residence with private outdoor space in Manhattan, I am constantly tracking the costs of terraces in the city. Through my research, some interesting trends have emerged.
Up until this year, almost all private outdoor space fell into one of two categories – selling at either one quarter or one third the value of an apartment’s interior space. Now however, private space in Manhattan’s high-end new development condominiums has taken on an entirely new structure,with the price per square foot for exterior space achieving the same amount or more as the interior. In some cases, the exterior has become even more valuable than the interior.
Two Downtown luxury condominiums that are commanding high prices are Walker Tower, the luxury residential condominium located in the heart of Chelsea and 10 Madison Square West, featuring condominium residences designed by Alan Wanzenberg. Not only are these successful properties setting new standards for finishes, features and amenities, but they are offering large private outdoor spaces with staggering views.
At Walker Tower for example, a unit on the 10th floor and a unit directly above on the 11th floor are both corner apartments with more than 3,000 square feet of space, similar ceiling heights,and multiple exposures. Both also have a spectacular northern view overlooking the Empire State Building, great kitchens,and a living room and master bedroom with great northern exposures. However, the 11th floor was offered at approximately $12 million, while the 10th floor was closer to $14 million.
So what resulted in the price differential for these two apartments at Walker Tower, despite their many similarities? The 10th floor has more than 1,000 square feet of exterior space, which I calculated to be more than 100 percent of the value of the interior. Finding a terrace in Manhattan of more than 150 square feet is extremely difficult. Most terraces are closer to the size of balconies and are not practical to actually use. With over 1,000 square feet, you can throw a party. It also increases the living and visual space of the apartment. You now have an entirely separate outdoor room to use in the warmer months. Not to mention that from a views and point, the effect of this outdoor area gives the visual illusion of a larger apartment.
Another clear example of this trend can be found at 10 Madison Square West, which is seeing a quick sellout. A 19th floor apartment and another apartment just a few floors up have very similar layouts and are on the exact same corner of the building. Both are three bedrooms with approximately the same square footage, ceiling heights, and north and eastern exposures. However,the 19th floor is being offered for $11.5 million, while a few floors up a comparable apartment will be priced at $15 million to $16 million. What is the main difference? The higher floor apartment has a staggering 787 square feet of exterior space. Allowing for minor differences in the two units including the higher floor and view differences, I have calculated the outdoor space to be worth approximately 70 percent to as much as 100 percent as the interior.
Uptown at 200 East 79th Street, a new construction condominium with signed contracts on all units, the trend shown by Walker Tower and 10 Madison Square West is also being seen. For example, a 16th floor apartment at 200 East 79th Street was offered at $8 million, and just a few floors down, a home in the same line was marketed at just over $7.3 million. Both are large corner apartments with the same exposures and similar views. Because the lower floor apartment has significantly more square feet and higher room count, it would traditionally have a higher price per square foot. However,the main difference that bumps up the price for the higher floor is a 686-square-foot terrace that wraps around the corner living room and extends to the dining room. This terrace is also very wide in addition to being long, so it affords large-scale entertaining and essentially a real outdoor living space. The estimated value of this terrace is more than 100 percent of the value of the interior.
As new luxury condominiums continue to come on to the market in Manhattan, those with large terraces are poised to receive a premium over similar apartments without private outdoor space.