Value of a terrace

Sorry about multiple threads, something off with my computer or the site today.

I PERSONALLY think USABLE outdoor space is a HUGE positive factor. Did you get the emphasis I meant by the CAPS? GOOD! Now, the problem is that MOST OUTDOOR SPACE IN MANHATTAN IS CRAP because the ambient noise is so great that people do not use it, so it has, in practice, zero value. EVEN IN CASES WHERE A BALCONY WOULD BE NICE (i.e., reasonable noise level, some view, or a nice view) THEY ARE OFTEN CRAP because they are a single door that swings open for access, as oppposed to sliding doors or french doors that create a more open feel. So, paying close attention to this, they are usually useless but if they are good, they are worth ,,,not sure how much, it's personal.

newbuyer99, I put some thought into this as I will be renting an apartment next year in NYC. This is just my opinion and how much I personally would be willing to pay as a renter. First, it depends on whether the terrace looked nice and was in decent condition. I was at a friend's apartment this summer who had a terrace that looked like crap and I wouldn't pay a premium at all for it because I would never use it.

However, considering that it is a decent, good looking, useable space I think I would pay around $500 more than if it just had a balcony. However, if where you building is located is on a side street or another semi quiet space I probably would pay $750 more. Hard to beat having some private space outdoors.

Take what I say with a grain of salt though, as I mentioned I am no expert on the NYC real estate market. Just thought I would give you a renters opinion. Hope you have a nice evening.

FWIW, the standard pricing for outdoor space in sales is 50% of interior value per sq/ft. But there is crappy outdoor space and prime outdoor space. A nice set back is better than a balcony. Sunny is better than dark. Wider is better than narrow. Quiet is better than noisy. Private is better than in full view of the world. So those things factor in to whether outdoor space deserves to be valued at more or less than the average 50% value of interior space when buying a place. Don't know if rentals use the same 50% formula.

I agree with kylewest: go with the 50% rule. Seems like the only objective metric possible.

Here are two in the same building:

23A, no balcony, $3825 http://rosenyc.com/Portals/0/PropertyFiles/Floors18-282bdrA.pdf

21 E, balcony, $3795 http://www.ellingtonnyc.com/18_28_e.html

We took the balcony. It's always noisy and windy. I can see the Hudson and almost across 52nd Street to the East River. I go outside seven to ten times a day to get the feel and smell of the air, see the clouds, watch the weather come across from NJ. I want a balcony in any apartment I live in.

I actually agree with cliff702 in that I use a balcony just to "feel" the weather, the type of day, etc. but my experience is most people I know with balconies never use them, as in extremely rarely, and do not go out on them even to check the weather, because of noise, wind, it gets dirty. If one is nice --as defined by Kyle -- i think it makes sense to pay more, but a balcony eight floors above a roaring avenue is useless for most.

I think few people realize how filthy balconies get. Furniture left outside needs to be wiped down before you sit on it and for little balconies on apartment buildings (like the 8x6 things on the 28th floor of an UES building, the furniture needs to be iron or it will blow around in the wind. The wind is another thing most people don't realize about balconies. Once you get a dozen stories or more up, depending upon what is around you, the wind howls A LOT. On a place like 2nd Ave on UES on upper stories, wind almost never stops. It's like Patagonia up there.

kylewest is right. high floor out door space in certain areas can feel like you are in a slip stream. Ever wonder why you never see furniture on those high floor non-set back arrangements? It blows off!!!
I love outdoor space but, it's tricky and the variability is intense. 50% rule is a good place to start and you can wiggle up or down as the view/noise/wind suit you.

50% is the high end.

If it is a small balcony, well, what if you had a small 3x7 room ... aka a closet, you wouldn't count that square feet the same as the square feet of a real bedroom, so why would you count a balcony of that size as regular outdoor square footage and apply 50%?

Also, the 50% rule applies to outdoor space where something isn't right over it, i.e. it is outdoor and open. If you have a balcony with an identical footprint balcony right on top of it 9 feet above, that actually feels very very different.

And then finally, outdoor space decreases in value as you go higher. 3-4 stories up is great, higher and higher loses value as a place you want to spend time.

Thanks, all very helpful. We have a huge terrace (very high up), and do really enjoy it, but I agree with all the negatives - wind, furniture blowing over, things getting dirty, etc. We don't have anything right over the terrace, which is nice, but in the summer air conditioners from the apartments above ours drip onto the terrace, which is not so nice. And it's definitely not high-end.

Using the 50% rule, and figuring out what we pay for the whole apartment values our terrace $800-900. I just don't think it's worth that much to me, though. I think sarahghore is right - you have to discount for how high up we are (huge wind factor) and the fact that it's not high end. Using a more discounted 30-40% rule, I come up with $500-$700 value for the terrace, which is still a bit high, but more like it.

saraghore - "outdoor space decreases in value as ;you go higher. 3-4 stories up is great, higher and higher loses value as a place you want to spend time".

Are you serious? Have you ever been on a setback terrace on top of a 12-25 story building? That's people really pay for.

Though I will say I once looked at an apartment with a setback terrace on the 40th floor of a building, and that was scary high up

I open a window and stick my hand out to "feel" the weather. It's a lot less demanding and expensive than getting a terrace. Try it sometime; it works.

PMG - Lived on the 15th floor and stuck hand and head out. Not satisfactory.

Moved up to 23rd floor with the terrace. Now when I stick my hand and head out, my coffee and the NYTimes come with me.

But seriously, I did feel trapped without outdoor space and the declining rental prices allowed us a 2/2 with balcony for about the same price as our previous 1/1 with den, no balcony.

I would happily pay 50% for outdoor space.

While I agree that a little balcony high up, will get dirty and be windy, etc., there will be many days when it's pure pleasure, whether with a coffee and newspaper, or just having the door open.

A better solution is more outdoor space. This thread largely ignores the best outdoor space, which is rooftop space.

As someone who has is not only frightened by heights ever since witnessing a friend fall 4 stories (he survived -barely) but has been known to sleepwalk, there are a few of us who view a terrace as a liability. I imagine nervous parents of adventurous toddlers might also be in this group. Therefore,
I am disappointerd when I see a great apartment that I would have taken in a heartbeat if it didn't
have a terrace. Yes, I could block access to it, but why pay for this amenity within the rent?

All outdoor space is not created equal, but for the most part, balconies or any type of overhangs, 1/3 of the value of what your valuing the apartment's interior sq ft, setbacks and roof decks 1/2 of the value of the apartment's interior sq ft. roof decks are a judgement call, based on the views and condition. I won't pay 1/2 for a roof that is raw (just flashing),closer to 1/3.

rvargas
Rooftops are a double edge sword, roof repairs are costly and frequent.

I love terrace space and think another important factor in coming up with a valuation is what rooms in your apartment have views of your terrace with all the greenery and flowers (much more valuable when all or most of the major rooms face it).
Additionally it is more valuable when you have access to the terrace via the more prominent rooms, IE like from the dining room to the BBQ / outdoor eating area and or master bedroom to private lounging area, rather than having to access or get the view from say the 3rd bedroom.

Furthermore with the amazing pre war architecture in NY I highly value and would put a higher dollar value on beautiful architectural brick and stone work with hand made wrought iron around the perimeter of the terrace, rather than some generic modern iron railing.
Exposure is also important as most people and plants prefer south and west if you can get a corner, so you can get possibly sunsets as well.

from a prior thread on sales (quoting myself):

"There is NO formula for what outdoor space is worth. Let me give you an example to show why:

Take two apartments in the same building, next door to each other. Lets say were were talking about some building on CPW facing the park and we're on the 15th floor. Each terrace is a nice 15 foot by 15 foot setback with full park views. So in each case we have 225 square feet of terrace of the same exact "quality" (in other words, I'm trying to avoid the argument of comparing 225 square feet of outdoor space at the bottom of a light well to 225 square feet of penthouse terrace).

The first terrace is attached to a 500 square foot studio. The second terrace is attached to a 2,000 square foot Classic 6. Without the terrace, let's say the studio is worth ?$750,000? and the Classic 6 is worth ?$3 million?. With the terrace, the studio is worth ?$1.1 million? and the Classic 6 is worth ?$4 million?

Obviously I'm pulling these numbers out of thin air, but I don't think anyone can argue against the logic involved: the exact same terrace attached to 2 different apartments can vary a HUGE amount. The reason is the terrace is something that can never be bought itself: it only acts as an enhancement TO AN APARTMENT. As such, it affects a percentage of the apartment's worth more than it stands alone on it's own $PSF basis."

_________________________

David Goldsmith
DG Neary Realty Ltd.

Good to see you back, 30yrs.

I have a ground floor apt with a garden/deck/patio. It is 600 sq ft with wood deck floor and bamboo fencing. It is located in the back of the building and closed off to everything which provides a strange quiet feeling in the city. There 3 story buildings across the way so it does get light even though it is north facing.

I absolutely love having that much outdoor space. Tables, chairs, planters, grill etc. Even when I don't go outside, i just open the door from the living room and the apt feels that much bigger. I don't know how much value it adds but it is certainly the main reason I bought my apt.

30yrs
Your point is fair,especially when dealing with a small apartment that has a much bigger proportion of outdoor space to interior.
As well when considering having outdoor space along central park. You've probably picked the most influencial scenario for outdoor space.

Though a buyer will be looking at minimum interior sq ft requirements first, and dealing with the outdoor space secondary.

Sticking with the example you gave,my valuing the interior sq ft at 1500 per sq ft, I would value the studio at (500 sq ft plus 112.5 sq ft (1/2 a foot of interior space))612.5 times 1500 = $918,750
classic six (2000 sq ft plus 112.5 sq ft) 2112.5 times 1500 = $3,168,750

It may be a flawed valuation system for central park apartments,but I think valid on say... 6th avenue and 20th st.

I think if you looked at the sales history of 300 West 23rd Street (pretty close to your target spot), you would find similar results to my CPW example.

____________________

David Goldsmith
DG Neary Realty

bob420 that sounds like a nice place. One key issue to how nice for me would be if it was not too noisy -- a massive air processor right next door can just ruin sitting out back, but if there isn't one or several close, then it can be great. Density in Manhattan often ruins outdoor space. If the stars line up, it can be great.