Now you see it (and pay for it), now you don

Following nicely on my post yesterday about the values of Manhattan apartment outdoor space, The Real Deal segues with a piece about vanishing views and view values. Clearly, views matter, and command a premium. Equally – this being a dynamic market in a dynamic city — nearly all views are provisional.
The article talks about a (non)buyer on the seventh floor at 21 East 22 Street with (that day) “city views” and a partial view of Madison Square Park, whose feet got cold when plans were discovered to build a 40-story residence at 20 East 23 Street.
Similarly, some owners at The Century, 25 Central Park West (at 62nd and 63rd Streets) are losing Central Park views with the construction of the full-block 15 CPW, which has a 20 story tower in front of a 43 story tower. This new building will also take some park away from some lower floors at the Mandarin at Time Warner.
Fired! Your view has been Trump’d…
The article also talks about the views lost at 100 UN Plaza (52 stories at First Avenue and 48th Street) when the 90-story Trump World Tower (truly ‘Trump-over-sized’) was finished five years ago just to the south. I don’t know if values at 100 UN Plaza have recovered yet. Owners facing south in 100 UN Plaza (easily half of the units) lost nearly all of their southern views 15 years after the building was built.
What goes around…
Ironically, the article uses the Lincoln Towers buildings (about ten 30-story towers along West End Avenue in the high 60s) as an example of development that can both destroy views and increase real estate values. When the Towers were built in the late 1950s, anyone to the east that used to enjoy Hudson River boats and colorful New Jersey tinted sunsets lost all of that. But – over time – the introduction of so many new residents increased services over time and, thus, property values in the neighborhood.
"The construction of the Lincoln Towers [on the Upper West Side] worked as a positive," Kammerer said. "The expensive limestone buildings enhanced the neighborhood."

When an entire complex of properties like the Lincoln Towers is developed, it elevates the value of neighboring properties, translating into higher property values.

"There is a loss of scenic view but the association to the new units and upgrade in retail services increases the property value," Miller said. "However, more times than not, the view is blocked, but the neighborhood remains unchanged."

Trump’d again!
What’s weird about this example is that it was The Donald’s development over the old rail yards in the West 60s that caused the west-looking Lincoln Towers apartments to lose 95% of their river views, beginning with the first ‘Trump Place” apartments on ‘Riverside Boulevard’ in 1999.
The Lincoln Towers folks undoubtedly looked out over the rail yards for forty years and figured no one could build over that. No one but The Donald, as it turned out.
My sense if that there had been about a ten or fifteen percent differential within Lincoln Towers for apartments with river views, which was eliminated essentially overnight once the Trump Place towers started going up (eight towers in eight years), but that values have gone up, nonetheless. In contrast to the Miller quote above, in this case, the neighborhood improved. ("There is a loss of scenic view but the association to the new units and upgrade in retail services increases the property value," Miller said. "However, more times than not, the view is blocked, but the neighborhood remains unchanged.") Driving prices north.
But the Lincoln Towers folks (and the 100 UN Plaza folks) who lost the views lost the views. I suspect that in most cases they would – if offered such a hypothetical choice –have opted to keep the views and lose the added-Trump-value.
Increasingly valuable, increasingly fragile
Appraiser Mitchell Maxwell Jackson has data suggesting that the value of a “view” has increased dramatically, just as the scope of new development puts more views at risk.
In 1983, apartments without views compared to apartments with views had a 10 percent difference in the price. But in 2005, the same apartments were resold with a 38 percent difference in price, the analysis found.
The differential is undoubtedly greater when “the view” being valued is a great view. Once again Trump provides relevant data, since his buildings are either overlooking park or river (Trump Place at Riverside Boulevard, Trump International Tower at Columbus Circle) or are really tall (Trump Tower, 68 stories on Fifth Avenue at 56 Street), or both (Trump International).
In looking at three Trump condos and comparing “view” apartments to “non-view” apartments in those buildings, Mitchell Maxwell Jackson found:
In 1983, the difference in prices of a two-bedroom apartment with a view was 31 percent. In 1995, the difference was 71 percent, and in 2004, the difference in prices for an apartment with a view was 148 percent.

"The markets now recognize the value of light and views and developers now price much more aggressively for this," Jackson said.

Add 40% to take your breath away
Overall, Jonathan Miller puts “breathtaking views” at a huge premium:
The impact of view on overall property values can vary, with breathtaking views making up 20 to 40 percent of a given apartment’s value, said Jonathan Miller, president of appraisal firm Miller Samuel.
Using protection?
The best (only?) way to understand the risk and life-expectancy of a given view is to hire a zoning attorney to review the parcels in the relevant sight line. Then, take a deep breath and try to guess what the future will bring. What changes in the city might make it possible that the present zoning could change enough to change (destroy) your coveted view? My crystal ball is fuzzy….
Again, take another deep breath: as Miller says "Enjoy the view while it lasts,"
(He notes that “lot line” views can have a particularly short life time, but that is a segue for a different post….)

Bottom line for many lofts – feh?
Classic (original) lofts in original loft areas tended to have more to do with ‘sky’ than ’view’, so their values are not as dependent on views. (Some of the original Soho lofts barely have any light to begin with; many financial district lofts have ‘canyon views’ and light, with a short visual prospect) The newer uber-lofts in condo towers are more dependent on views for value, of course.
Even with the older lofts, there have certainly been instances of new buildings spoiling views and, in some cases, even light.
Residents of the American Thread Company (260 West Broadway) with north views on lower floors are losing nearly all of their northern exposure with the construction of the new boutique hotel on what had been a one-story AT&T garage facility. They had enjoyed the view and light for 25 years.
Residents on the west side of 261 Broadway are losing all of their view and most of their light with the construction of a tower next door (the broker who last year sold one high floor unit that was affected conducted open houses with butcher paper on three or four windows so that everyone understood what would happen – brilliant!). Also a 25 year old view.


© Sandy Mattingly 2006
Tagged with: , , ,

Leave a Reply