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A neighboring building is interested in our 7,500 sq ft rooftop in SoHo. Right now the roof is just a boring paper, but our neighbor, building a 25 story luxury condo is interested in a long term rental/purchase to make it a private roof terrace for their luxury building. What on earth is it's value as a long term rental or sale?
I don't know, josh. But it sounds like it could get complicated.
The unit owners in the new condo will be using your roof terrace as their own common element.
Their renters and guests will be using it.
You have a doorman to be traffic director of the flow into the building, if so very confusing for him.
Not great for building security.
Who's responsible for maint. and upkeep of roof terrace, your super or the new condo's super?
Who's responsible for damage that affects your building's apartments below roof terrace.
Has this ever been done in Manhattan before, maybe somebody here has heard of it and they can tell you more.
The construction is going to be hell for your building and especially for your top floor apartments.
Have you considered selling roof rights to those in your building? That might be an easier and simpler way to generate some cash flow and also an ongoing revenue stream in terms of additional maintenance/CCs.
I bought roof rights from my building for $100 per square foot. The conditions were such that (1) the roof needed to be reinforced to support the weight of a deck, (2) there was no existing access and creating access required major structural work, and (3) no other unit in the building could've possibly accessed this space except by climbing a 15' ladder, jumping out a scuttle, and then further climbing over a row of air conditioners and mechanicals.
I suspect $100 per square foot will be close to a minimum. If the roof can already support the weight of a terrace, if there's existing access (e.g., a proper internal stairwell), if several units could competitively bid on the space, and if the views are good, I suspect you could get up to $500 per square foot.
Give them a 100 year lease instead.
Your building maintains more control and say this way, and if things go bad your building has a finished roof deck.
The builder of the condo may bite on this as long as the space is being used for a common roof deck for their building and not private space for an individual condo unit.
The noise and inconvenience of the necessary work notwithstanding, I'd be concerned about security issues. How will your 'neighbors' access the roof, exactly? Presumably they'll be tromping up through your lobby and using your elevators. Do you really want the extra traffic and potential security risk of non-residents flooding in and out of your building?
How about noise? How will you regulate the use of the space? What is your recourse if someone decides to blast a radio up there? Or throws a weenie party for 50? As a top floor co-op resident I can assure you I would NEVER go for an arrangement like this. By selling the space to a third party the shareholders of your building lose all control.
If a lease, what is reasonable rental rate per square foot?
The neighbor wants to acquire two things: your air rights and the use of your roof.
(The air rights are needed so you don't sell them to the neighbor on the other side, who could build something cantilevering over your building.)
Air rights are bought and sold all the time, so the process is fairly straightforward.
The process to license the use of your roof would be similar to, say, licensing part of it for cell antennae. Just different in scope.
Your lawyers can work it all out and help you determine what it's all worth and what you can get.
There wouldn't be access through your building, as the condo would have a lounge or gym or something adjacent to your roof on their nth floor.
The contract would probably specify that your access to your roof would be limited by a panic-bar lock, but nothing to stop your leaving it unlocked and using the deck anyway.
no. Their building is taller than ours, so they would have a door from their 11th floor leading out to our roof (which is only 10 floors high).
They would build on top of our roof with a raised decking, so that they wouldn't be stomping our roof, but in fact there would be decking elevated over our roof by several feet. I guess a radio could be loud, but we can put limitations on volume and or add sound proofing.
Also forgot to add--you won't be doing your property value any favors if the entire roof is owned/under long tern rental with the neighboring building. I for one would never buy into a building with a set-up like that. I imagine most buyers would feel the same.
You might want to contact a board member at 302 West 86th Street. I think they did a deal like this with 535 WEA.
bramstar, what if that substantialy lowers your maintenance?
Josh--who would be responsible for maintaining your roof? What happens when you need to replace/repair the roof? Would you need to go through them for 'permission' to do the work? Also keep in mind that there WILL be noise, no matter what sort of decking they install.
And remember that once you do this, you will lose any future potential to build your OWN communal roof deck. That seems a shame.
josh, my firm could probably work out a valuation for you, but you might also want to call one of the big appraisers in town. I would recommend Jon Miller at Miller Samuel, who is highly respected as this stuff goes.
DG Neary Realty
>>bramstar, what if that substantialy lowers your maintenance?<<
Still would not be interested. If I'm buying into a building as a shareholder, I want the corporation to fully control all parts of the building. Renting out ground-floor office space is one thing. Selling/long-term leasing the entire roof seems crazy.
Lower floors might benefit from the decreased maintenance. Upper floors would suffer, especially the top floor. I'm in partial agreement with bramstar in that I would never, ever, ever buy a top-floor apartment in a building that sold or leased the roof space to a neighbor. You're begging for hassle, lawsuits, etc.
In terms of getting shareholders to agree to this, I suspect you'll face a lot of resistance from the upper-floor shareholders.
I totally agree with bramstar. I had the same take when I read the first post. IMHO, the only one to benefit would be the luxury building next door. Josh, You might want to take W81st advice and contact the building on WEA. Their input could be quite informative.
This is a crazy idea. Roofs are about the most expensive thing your building might have to deal with, and poses among the greatest risk of damage if not maintained and repaired promptly. Who will make the decision as to when it is time to tear up that decking in order to replace your roof??? Who will mkae the decision whether to do some half-ass job or doing it right? And, if this is going to be accessible to one unit in the new building, I suspect that your lease counter-party is going to be one unit-owner, not a building.
West81st's 535WEA/302W86 example is very useful. The co-op at 302 sold its air rights to the 535WEA developer in 2008 for more than $5,000,000.
The agreement, which must cover anything conceivable, runs to 128 pages. I didn't read the whole thing, but section II.B. details how the condo can erect roof-deck-ish stuff on 302's roof, and the 302 shareholders get to use it as well.
URL for the agreement is http://a836-acris.nyc.gov/Scripts/DocSearch.dll/Detail?Doc_ID=2008012300317004
Oops, I misread section II.B. The co-op sold its air rights, but retained the right to build a roof deck, trellises, etc., and permit its shareholders to use it.
The condo's owners don't have access to the co-op's roof. There's no way to get onto it except by passing through the 16th-floor condo and its terrace.
302W86 apparently did build a roof deck with their windfall. The current Google Maps aerial view shows it being worked on.
Thanks NWT. I knew there was an air-rights deal that led to a roofdeck, but I whiffed on the details.
Lots of questions: I will do my best to answer.
1. Next door already owns our air-rights. They were sold years ago. We can not touch our roof by the terms of the agreement - not even to make our own roof terrace - and, in fact, they already have the right to cantilever over our roof by a few feet.
2. Our building is not a condo building but is a rental building, a commercial rental. So the tenants on the 6th are office rentals.
3. Maintenance would be the responsibility of next door.
4. Regarding noise, hundreds if not thousands of buildings in NYC have rooftop terraces. I assume that noise issues have been resolved for those situation. So I am not that concern. However, if you do live in a terrace building, is this a concern for top floor units?
5. This roof deck would be a bonus facility for the entire condo building next door. But my tenants will not ave access.
6. Front Porch - We have actually met before. I can give you a call if you wish to talk.
3.) Complicated, josh
You know how you could monetize your roof? Put some solar thermal racks up there. I could get you a name of some solar developers if you're interested.
I know you probably don't want a capital outlay, but these things are often seller-financed, ie the company that sells you the panels will finance the purchase for you, and claim the energy savings over a period of years as part of the collateral.
You could probably generate enough solar energy to power all the common areas of the building, and maybe even the boiler in the basement.
can't put solar panels for two reasons. 1. not allowed to based on air-right sale. 2. not enough sunlight as we are next to bigger towers.
basically it comes down to this. leave this deal alone and keep a roof with nothing on it.
or lease/sell roof space to next door for some amount of $$$ but deal with potential issues mentioned above.
there are zero other options as next door will not sell roof rights back to us.
I'd take option #2, leave well enough alone.
this is a no brainer - sell the roof rights for them to build. you dont have rights to the roof anyway (to build anything), so why not get some cash for it.
First option (leave this deal), but it's a rental building.
Are you an owner?
Nobody using the roof is better than who knows how many people using it (especially at the same time).
Since they will access it through their building.
so what is the roof worth? I have no idea?
Ugh. I bet you're all kicking yourselves over having sold those air rights years ago. Do you really want to let the roof go as well?
The fact that your top-floor tenants are offices and not residential makes things perhaps a bit more palatable, but not by much.
Maintenance being the responsibility of the neighbors is a really BAD idea. They will try to stall as long as possible with roof repairs/replacement because those repairs will cost them but not directly benefit them.
Re noise, yes--there are many buildings with communal roof-top access. BUT these buildings have full control over the activity on their roof decks as the space is used by the building's tenants and NOT folks from a neighboring building. Boards can do things like pass bylaws limiting access after hours, limiting noise, limiting large parties. You will not be able to do that in your case.
Roof deck party at Josh's tonight at midnite!
If they already have the air rights and can cantilever over your roof anyway, I would get something for it. They are going to put something over your roof at some point.
Party runs all night. Free water balloons. Breakfast at dawn.
well they can only cantilever 4 feet. so its not like they can really use our roof. we simply aren't allowed to touch it. same question still - how much is it worth?
Tonight's entertainment will be provided by the clog-dancers recently featured on "America's Got Talent"!
Yowza, yowza, yowza!
I'm not avoiding answering your question, josh. I'm just bad at math.
Does this mean that the streeteasy math/finance experts can't calculate the worth?!
financeguy? jason? inonada?
I agree that nobody using it is better then 'who knows' is using it. But for the right price, I would be ok with 'who knows'.
O.K. so now you just need the right price.
UPDATE: Sea Org party tonight on josh's roof deck to celebrate Tom's divorce from Katie.
I think she passed a note to somebody on the outside and got rescued. The divorce thing is just to put a good face on it.
Is the value of the roof deck more than Suri Cruise is worth?
Hi Josh -- did I meet you a few years ago through Wired?
Anyway, call me and remind me at your convenience.
A big thanks to Ali (Front Porch) who I called and helped me the question.