a $2 million view on Madison Square? comping at 15 East 26 Street

how much would you pay?
[UPDATE 2.4.11: I looked at this post again for purposes of another ‘view’ post and was embarrassed to see that I never spell-checked this. What a mess! I have made the many corrections (26!!), this time without indicating where there’s been any editing. Embarrassing, indeed.]
A colleague recently canvassed other agents with the question, "what is a spectacular view worth?", to which many people responded with opinions but few with data. Personally, I offered the opinion that some people will willingly overpay for a view, though I also provided some data (see below). Then I came across two of the recent new development sales of Manhattan lofts added to the Master List at 15 East 26 Street (Fifteen Madison Square North). Some people will overpay by a lot  for a view. I have some data.

as clean a comparison as you are ever going to get
The two units are on the same floor, are essentially equal in size ("2,380 sq ft" vs. "2,390 sq ft", with the "smaller" one being a 2 bedroom / home office / 3 baths vs. 3 bedrooms / 3.5 baths), appear to have identical finishes, and have essentially the same common charges and taxes. The "larger" one has a "full spectrum of sweeping city views", facing north, though with only 3 windows giving that north view; the developer priced this loft at $3.6mm.

The developer bet that someone would overpay by a lot for a view: the "smaller" one started at $6.15mm (later was "reduced" to $5.9mm), for no other apparent reason than the view. With only 5 windows, these windows are all large and south-facing, giving "sweeping southern views over Madison Square Park" from both bedrooms and the living room.

The clearing prices (can’t you feel the tension mounting?) are contemporaneous: buyers signed a contract on the smaller one on January 5; for the larger one on November 26. In other words, you might never find a pair of sales in which The View is so obviously the only difference. As it happened, the developer got nowhere near the asking price on either unit, but was right about the value of the view. Somebody paid $4.73mm for the view in #14A; somebody else paid $2.69mm for the same amount of space and (only) "sweeping city views" in #14F.

Everyone will still have opinions about what a view may be worth, but in this instance this view over Madison Square Park was worth $2,014,000. Indeed, while I believe that few people would estimate a view premium on this scale, facts are facts.

Look at it another way: the #14A buyers paid a 75% premium over #14F for the view.

I suspect that this spread is out of guidelines for any appraiser, as I have been told that direct river or park views can add "10+%" in value; I don’t know how much range an appraiser would put on that "+".

other data pair from Tribeca
The other pair of same building sales that shows a premium for a view is not anywhere as clean an example as with 15 East 26 Street #14A and #14F, as those two lofts vary so much in size. Nonetheless, in the case of 38 Warren Street (Keystone Building) #8A sold in January 2008 at $1,282/ft while #3C sold in February 2008 at $1,016/ft. Given that these are two very different lofts (#8A is "1,248 sq ft" while #3C is "2,815 sq ft") it is hard to say that the 26% price/ft premium for the smaller loft was entirely due to the view. But it is some data. Not as good as the 15 East 26 Street pair, clearly.

Fifteen Madison Square North is my new poster child for the value of a view. I just don’t think it will become my benchmark, as I doubt that I would be very quick to apply a 75% premium, despite this evidence.

© Sandy Mattingly 2010