Smart move?

need to see the floorplan, though off the top, I would say not a smart move.

I guess that would depend on where it is....are we talking the finest block of Fifth Avenue or far east on 96th...UES is a huge area to speculate on....

Stupid question: how can it be a terrace if it's on the first floor?

Maybe this is dollar-cost averaging on RE. Keep adding a little more every few years...

If you could re-write history, the smart move would be to NOT have bought the 2006 alcove studio in the first place.

But given that's already happened - a sunk cost - isn't this just a comparison of the relative value of the two alternatives:

a) the original studio with small terrace
b) the combo with huge terrace

If you think that B is worth at least $385k more than A, then it's a good move. My guess is that creating apartment B does not add $385k of value, so probably not a smart move. Perhaps there is a terrace lover somewhere who would value it that way, but not most buyers. What does the terrace look out onto?

It's only a sunk cost if you can't recoup it. She could sell her studio and recover at least partial value.

inonada, you are correct. The new york times indicated the first studio had a patio. The selling broker called it a garden. I have an aversion to using the term patio, which reminds me of a suburban yard, or worse, the term "patio home" which indicates housing shoehorned onto tiny lots.

eastsideaptsearch, the building is on 77th and 1st

One bedrooms in the building on a high floor are going for less than $600k, and the maintenance on those is a few hundred dollars less. Unless you put major value on the garden and the extra bath, it seems like a complete waste of money. Maybe the buyer is opening a dog kennel?