How much is a terrace worth?

what kind of terrace? wrap? set back? walk-up? is it a ph, or is someone above you?

Someone above. It's an extension of the living room type of terrace.

uptowndude, take a look at these older threads:

http://streeteasy.com/nyc/talk/discussion/16391-value-of-a-terrace
http://streeteasy.com/nyc/talk/discussion/12234-what-is-a-terrace-worth

very roughly, price outdoor sf at 50% of the price of indoor sf.

Thus a 1,000 sq ft. apartment with a 200 sq. ft terrace, in a world where prevailing prices are $800/sq ft., is an $880,000 apartment.

ali r.
DG Neary Realty

Try these older threads for info:
http://streeteasy.com/nyc/talk/discussion/12234-what-is-a-terrace-worth
http://streeteasy.com/nyc/talk/discussion/4459-value-of-a-terrace
http://streeteasy.com/nyc/talk/discussion/10566-outdoor-space

terrace above==leaks

Try this: http://streeteasy.com/nyc/sale/561702-coop-210-west-90th-street-upper-west-side-new-york

at about 1000 sqft plus 578 terrace, it should have sold in 1.3 range, given the building 1000 sqft avg, while we won't know the final number for awhile, 1.7M in a couple of weeks seems a higher premium was placed on the outdoor space. The 50% rule isn't accurate imo.

a couple of other recent UWS notables:

http://streeteasy.com/nyc/sale/500268-condo-215-west-90th-street-upper-west-side-new-york
http://streeteasy.com/nyc/sale/473285-coop-215-west-91st-street-upper-west-side-new-york

I think 50% of interior, or extra 10% for the interior value is a very rough rule of thumb. For a large setback terrace, with views, there can a trophy effect. A dark or cramped space only accessible from the bedroom is not going to valued as much as an entertainment-ready terrace off the living room.

Those are great examples of why "rules of thumb" aren't really rules but rather are starting points. Quality of outdoor space varies so widely from those nasty little dark balconies you can barely fit a folding chair on to the type in the 210 W 90th unit you link to: a massive rooftop "front-yard-in-NYC" terrace. I think that 90th street terrace deserves a premium for its luxurious dimensions, penthouse location, and light. Same for a wrap-around terrace, and even more so for a wrap-around with good depth (not just 3-4 feet). So while a 4 foot wide terrace that slinks along the outside 12 feet of an apartment's study may be worth 50% of interior space, a different formula would be needed for a 12 foot wide truly gracious terrace wrapped around a penthouse's public rooms and accessible from the master bedroom.

Maly, I agree. But it just seems to be all over the map, given the emotional component involved. And this 50% figure constantly gets quoted, for lack of a better methodology.

spin, listing agent on West 90th doesn't claim a sf, but that listing is about 1200 sq. ft in broker-ese, which would have put it at about $1.5mm by the rough rule of thumb --

which I stand by, though this one may have traded for more than building avg. due to PH level and nice kitchen.

ali r.
DG Neary Realty

Indeed KW.

Ali, do you have something more refined than the 50% rule?

Always love the old 80/20 formula, I see it show up in so many things, I'd add the rule of thumb on terraces (setbacks and roof space 50% value of interior space) generally valid 80% of the time and extenuating circumstances that change it 20% of the time.

That being said, have some comments on Spinny's example,nice apartment I might add.
First, I find it's not 1000 sq ft, more like 1100 and as Ali points out, brokerese puts it at at least 1200 sq ft interior.
Add to that, the most recent sale in the building was 7H, 2000 sq ft for $2,350,000, that's $1175 per sq ft, not $1000.
Sometimes a building, or a unit in a building, is worth more or is being overpaid. But I don't see how the formula is proven wrong in this example. Do keep in mind the maintenance in this building is on the low side for outdoor space adding value as well.

Dude, Jonathan Miller uses 25-50% as a guideline for valuing outdoor space as % of interior value, with lots of caveats and much commentary. I added a specific analysis for a specific loft back in May, with a link to The Miller: http://www.realtown.com/sandymattingly/blog/loft-features-outdoor-space/riffing-with-the-miller-on-the-value-of-manhattan-terraces-decks-balconies/

Short story: value is less if terrace is disproportionately large; value is more if very accessible to main interior space; value is greater if view is enhanced. Lots + lots of variables. Lots + lots of room for judgment (disagreement).

Personally, I think outdoor space is one thing that *some* percentage of buyers will over-pay for, especially if it is a scarce plus-factor in a neighborhood, building, or price category.

I like 80/20 and low maint. better than fluffing up the interior dimensions to make the 50% rule work. I'm not even sure the bldg square footage is that relevant given the vast differences in construction of non penthouse (1915) and penthouse (80's, I think.) I'm more wondering what makes outdoor space 60% or even 70% of interior.

Thanks SM, I check it out.

Rule of thumb @ bubble, last bid plus 10% up till liar loan was maxed out. Such simpler times.

Spin, it's tough to go beyond "rough rules" in one Internet post -- the finer gradations of valuation are an art, and that's part of why Jon Miller has a job, and why SMattingly and I have jobs.

However, the last thing Sandy said especially resonates: terraces are worth a LOT to SOME people. So a lot of predicting the trade depends on whether the seller in question has the time to hold out to find that terrace-valuing buyer.

On that note, we have a terrace-y 2-BR rental coming up in Chelsea in January -- duplex on a seminary block.

ali r.
DG Neary Realty

That's what I was going for, and that's why throwing around 50% all the time is misleading for those looking at a walkup with a ladder to a tar roof, or for those looking for an outdoor tiki bar adjacent the kitchen with an unobstructed view of Hoboken. Can we then say that, generally, without praying to voodoo dolls and dancing with chicken feet dipped in water buffalo blood, that the first example is 20% if you're lucky, and the second is 80%?

We can say that IF the target building is the only terrace on the market in whatever submarket (e.g. "UWS ca. $2mm"). On-market comps are going to weigh more heavily in a sale like this, previously-sold comps less so.

ali r.
DG Neary Realty

Spin1 -- Your tar beach example is probably worth less than 20% of interior space on $/ft basis, due to awkward access + condition of roof. I doubt *any* but the smallest + best-est terrace can be valued as high as 80% (i.e., justified by comps).

The highest provable value I can recall is what I dubbed a million dollar penthouse terrace at 110 West 25 Street, which came out to something less than 67% of interior value. 2006 and 2005 same-building sales comped the interior at about $1,100/ft; the penthouse with 1,500 sq ft terrace sold in April 2010 $1.1mm higher. (Implied terrace value is lower if you think 2006 comp is too low for an April 2010 sale, so you see why I say "something less than 67%".)

I walked through the comps in http://www.realtown.com/SandyMattingly/blog/loft-neighborhoods-chelsea/terrace-sells-for-about-1mm-at-110-west-25-street

I think there is a misunderstanding of my 80/20....it was strictly for how often the 50% of interior $ per foot likely works for and applies to the outdoor space(setbacks and roof).....80% of time.

"better than fluffing up the interior dimensions to make the 50% rule work"
But your $1000 average for your 90th st example(which is not the average of the last 6 months in the building) is based on the previous units being fluffed but you won't fluff this one...not fair.
1200 sq ft plus 578 outdoor (or 289 interior) = 1489. 1489 times $1100 (a more appropriate average) is $1,637,000, less than a commission's difference. Rule of thumb here getsere you to the neighborhood on this one.

"Tar beach" or unfinished roof with just flashing is still worth 25% of interior space if deckable.

Monthly costs have to come in play too, but after you've determine the value for average monthly costs.
If units you are looking at like this one average $2600 per month, but this one is $2100 per month, how's that affect your offer? What's the $500 per month cost you?...or save you in this instant. THat's $6000 per year, how much is that worth mortgaging? Assuming 5% interest, it's like mortgaging $120,000 on the high side, or if want to look at the low side and assume your only staying max 7 years, it's $42,000. Many ways to skin a cat.

Interesting thread, as we're in talks to acquire roof rights and build a deck. Realistic cost of doing so would be about $100k-$125k for 250 square feet of roof space. By formula, it doesn't seem like we'd get much or any return.

But our total cost of 800 s.f. apartment + all roof deck costs would still be under $1mm. And in three years of looking in and around Chelsea, we didn't see anything in our neighborhood that met that criteria. We're moving forward, knowing that even if we don't get a return, we'll use the space daily for six months out of the year for however long we live here.

The roof rights would also allow us to add a skylight and change our den into a legal or bordeline-legal second bedroom (have an architect looking into this) so there may be some value there, too.

egress

Lad, there is a property very like that at 420 West 23rd St, #2C (small converted 2-BR, with large outside 350-sf-terrace, though not roof deck) and I sold it this past spring -- for sellers I met on SE, of course.

ali r.
DG Neary Realty

Ali, we saw that place. The CCs + taxes were frightening (over $2,000, no?), and based on the condition of the common areas and some other apartments in the building, we had feeling that the building was not very well maintained. We noticed several seemingly active leaks in the building. Then there was the issue of street noise, plus the idea that every cigarette butt/piece of trash from the set-back apartments above would land on the terrace.... Great place, though, and nice, natural-looking 2BR conversion. If the monthlies had been more like $1,500, we'd have considered it despite the other limitations.

The high maintenance for the small size put off 99% of the people who saw it -- 20 years ago, that building was the "it" building in Chelsea, with white-glove service to match, and now many of the people who want the white-glove "it" building want the newest one, even if it costs twice as much.

but that's a cautionary tale for you, no? If you develop the roof over your small 2-BR, of course you won't have a setback problem, but you will have to maintain it -- and skylights do tend to leak. Think of yourself as buying additional space you'll enjoy, but realize it will raise your monthly costs, and that in turn won't be so easy to resell.

That said, I've heard from the other agent that our buyer loves his terrace.

ali r.
DG Neary Realty

Check this out http://streeteasy.com/nyc/sale/533295-coop-103-east-84th-street-upper-east-side-new-york

This seller must be delusional. The top floor in the building was obviously where the maids' quarters were (judging by past PH sales in the building)and this "combined" apartment is almost unlivable.

How much value is added to this strange apartment by the terrace?

The fact that the 210 West 90th PH sold so quickly is astonishing. Very small, weird apt (entrance from the outside, no real second bedroom, gothic useless skylight) with high maint. and no privacy and NO VIEWS. Just tells me that in the city most people, rightly or not, really value some greenery outside a window and a morning coffee outside.

Commoner, that's faulty logic. What it should tell you is that for some people, outside space is greatly valued. It says nothing about most people in the city.

ph41
about 7 weeks ago
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210 West 90th street (Astor Court) PH5-
On the plus side: very well done renovation in move in condtion, terrace (more a patio feel) is absolutely charming, very quiet and private with lovely plantings.
On minus side - rooms are fairly small (especially living room area), there are interior steps in the apartment (into the closet in the master bedroom, for example), no "prewar" charm as the penthouses were built on the roof of the building by the sponsor in 1987, and only 2 closets. Also, after you take the elevator to the PH floor, you go OUTSIDE to a walkway to get to the apartment - charming, in good weather, not so charming in rain or snow.

Not sure if it's even 1150 sf - price seems high, but I do think it could get $1,400,000 to $1,500 ,000 only because of move-in condition and charm of terrace

you decide

maly — you're right. I shouldn't generalize. It's just when a friend with a humongous set-back terrace has a dinner party, all guests swoon and faint and get really romantic and stay forever. Some other people value a fireplace, or a walk-in closet. You are right.

lad, will your maintenance go up after the roof is yours and buildable?

ali r.
totally on the money for handy rule of thumb.

I guess someone thinks this terrace is worth several million dollars.
http://streeteasy.com/nyc/sale/563991-condo-302-west-12th-street-west-village-new-york

We're in a no-amenity walk-up, so maintenance will go up only about $150/month if we buy the roof rights.

Quirky apartments like 210 W 90th PH may only appeal to a subset of buyers, but they may have very strong appeal within that subset. (The location is wrong and I couldn't afford the price, but I completely love the place.)

103 E 84th is cool, but not livable. And with the maintenance, I question whether the apartment is even worth $675k, much less $2.675k. It's a one bedroom, IMO, and not even a large one.

How much will it cost you to build it out? With or without plumbing?

About 302 West 12th Street: I don't get it. $5.5M! Probably some celebrity flavor added. The location is good but come on.

And it's not a Sotheby's listing! Im shocked.

thanks falco