June 30th 2014
For years, New Yorkers seemed blasé about private outdoor space. Maybe it was because they didn’t want to breathe smog or because they could just hold off till Friday when they visited their country homes. But as the city is cleaner and greener, the desire to hang outside in the city has surged, which has turned terraces into the latest must-have apartment accessory, brokers say.
“People want to spend more time [in the city], especially families, but they also want to walk outside and not be surrounded by lots of other people,” says Rebecca Edwardson, an agent with Warburg Realty who specializes in terrace units.
Today, apartments with terraces make up 10 percent of listings, an increase of 5 percent from a decade ago; once the province of penthouses but now on lower floors, these terrace units are found in many new condos. But prospective buyers shouldn’t confuse terraces with balconies, Edwardson says, which measure less than 100 square feet, are arrayed in cookie-cutter rows, and often in shadows; terraces are larger, artfully designed, and open to the sky.
To get a piece of the great outdoors, expect to pay an additional terrace factor—usually figured by multiplying the apartment’s interior square footage rate by 50 percent of the terrace’s size—says Elizabeth Omedes, an agent with Mercedes/Berk, a boutique brokerage (783 Madison Ave., Third Fl., 212-452-3070). “You can’t use it year-round, so you can’t really value it like space that’s used all the time.” (Other brokers freely admit that since not all terraces are created equal in style or exposure to the sun, pricing is less than scientific and relies more on instinct.)
Omedes followed that formula with a two-bedroom at 15 Central Park West, where terraces are found in about 20 of 200 units. In May, that listing, which had about 2,000 square feet of indoor space and a 360-square-foot terrace on the second floor, was priced at about $10 million. At the same time, a similar unit in the building with slightly more room inside but without a terrace was listed at about $9.5 million.
Homeowners who want terraces can also expect to shell out more for insurance; they may be treading on somebody else’s roof after all. Building common charges will also likely be higher.
While terraces may still be discounted relative to dining rooms, the distinction may be blurring. Brokers point out that some of the prices achieved by Walker Tower, an enormously successful 47-unit condo in Chelsea where more than half the homes have terraces, suggest that the outside and the inside were valued the same. The same is true for 150 Charles Street, a 91-unit condo where more than 40 percent of the homes have terraces ranging from 200 to 2,000 square feet.
Initially, condos with terraces at the building, which sold out in a lightning-quick three weeks (at an average price of nearly $4,000 a square foot according to media reports), had a terrace factor of 50 to 60 percent, says Darren Sukenik, a Douglas Elliman broker who marketed the property (90 Hudson St., 212-727-6111). “But I wouldn’t be surprised if the outdoor space goes for as much as the indoor space in resales,” he says. Indeed, Sukenik credits the building’s popularity to the terraces, which were not delivered as concrete slabs but landscaped and are managed and maintained by the building itself. “Green thumb included,” says Sukenik.
In a sense, it’s a no-brainer for developers to add terraces, which do not count toward the amount of housing one is allowed to construct on a site. Terraces can also allow developers to monetize the awkward spaces created by strict zoning laws, says Ryan Nelson, senior vice president of development at Sherwood Equities.
Its 500 West 21st Street, which is under construction at 10th Avenue by the High Line park, had to set back some floors so they didn’t overwhelm the elevated walkway. But the outdoor areas created by those setbacks will sprout terraces, which will be found in more than half its 32 units, totaling 5,500 square feet, Nelson says. “Terraces are a great way to differentiate yourself from competitors,” he adds.
Not all developers are sunny on the terrace trend; they barely factor in at Midtown condos like One57, the super-luxury 90-story skyscraper on West 57th Street, and 432 Park Avenue, a 96-story behemoth nearby; such windy, lofty heights discourage sitting outside, brokers say, and besides, at that altitude, views are driving values anyway.
But at smaller projects, like 215 Sullivan Street, where 13 of 25 units have private outdoor spaces, extra greenery makes a huge difference, according to its marketers, who point out that about 75 percent of the units sold in three months. And that is before nine mature tulip trees, stretching eight stories high, are planted in the fall.
“People equate an outdoor lifestyle with mental and physical well-being,” says Stephen Eich, who will manage the project for Edmund Hollander Landscape Architect Design, adding that “apartments of this size are not a novelty, but outdoor spaces are.”