was rooftop terrace at 105 Fifth Avenue loft as valuable as the interior?

depending on how you cut the numbers, it is
The “1,925 sq ft” Manhattan loft #11D at 105 Fifth Avenue, with its “500 sq ft” private rooftop terrace, just sold for $1.8mm. (November 9 is “just” sold in my book!) Trying to second-guess the market value depends on whether the interior space is somewhat primitive (or, at least more primitive than the 3 lofts in the building that have closed since July 2010), or whether that rooftop space should be worth less than 20% of the interior space.

The loft has windows across nearly the entire 41 foot north wall, with a ‘master bedroom’ that gets light only from a skylight, a den with two exposures, and an upper level bedroom with direct access to the roof deck. (When was the last time you saw a bedroom with a wet bar?) There are 3 reasons I suspect the loft is pretty dated:

• the seller has lived there since at least 1990
• the only quality-based modifier in the babble is “upgraded kitchen”; the rest of the babble modifiers are size, shape or puffery (oversize northern windows, large open living space, separate home office, serene master bedroom, oversize bathroom)
• that over-sized master bath features a large whirlpool tub, which to me dates a loft almost as well (but not quite as old) as glass brick (20+ years old)

The loft celebrated a birthday before The Market bit near an asking price:

first cut
I mentioned that 3 lofts in the building have sold in the last 16 months, all “1,500 sq ft”, and all cleared within a remarkably narrow range (a welcome, if miscellaneous, sign of market rationality, perhaps):

• #8E Feb 11, 2011 $1.35mm $900/ft
• #6C Dec 6, 2010 $1.3mm $866/ft
• #7C July 22 $1.3mm $866/ft

There was a lot of bragging about the condition of #8E, with an overuse of capital letters:

Architecturally Designed …. The Custom Built Kitchen Features Soap Stone Counter Top and Island. Ample cabinets and Storage in Addition to a Wall of Built in Closets … Sub Zero Refrigeration. Miele and Gaggenau Appliances. … Master … Bathroom, Marble Throughout with a Large Soaking Tub.

Ditto #6C, which leads with a heavy modifier:

Magnificent Mint Condition Fifth Avenue Loft …. Enormous ceiling heights, grand proportions and huge windows set this mint condition home apart from anything else on the market. Features include master suite with large dressing room and ensuite bath with his & her sinks, walnut stained floors throughout and stunning architectural details including corinthian columns.

The #7C babble is more restrained, but does date the renovation:

The loft is currently set up as a luxurious one bedroom with one large bath but could easily be altered to house a second full bath and separate home office area. Renovations of the kitchen, bath and floors throughout all took place in 2008 making it ready for immediate occupancy.

Each of these sounds like it is in superior condition to #11D, right?

These 3 sales pretty strongly suggest that renovated interior space in this building is worth about $877/ft, the average of those sales.

second cut
A moderate #11D renovation, focusing on the kitchen and bathrooms could probably be done for under $150,000, which would be about $83/ft. To keep things simple and the numbers round, let’s ballpark the renovation adjustment to bring #11D into the league of the neighbors at $138,600, or $77/ft. The round result is an interior space valuation for #11D of $800/ft, or $1.44mm for the interior.

The $360,000 balance of the purchase price would then be allocable to the private terrace with direct access from the wet bar room (errr … second bedroom). That is $720/ft for “500 sq ft” of private terrace, a rather high result compared to the interior space under the (by now familiar, right??) Miller’s Rubric, but to allocate more to the interior and less to the terrace bumps up against the 3 neighborly sales.

I can live with the working theory that the terrace adds 20% to the value of the loft (and is worth an extraordinary 90%) of the interior on a $/ft basis because this terrace (a) has great utility (direct access form the unit), (b) is a modest 28% of the size of the interior, (c) has a level of light and views not available from the interior (on the main floor, at least), and (again) (d) because the 3 recent sales are such strong evidence of an interior value of $877/ft for space in better condition than #11D.

crossroads of the world!
105 Fifth Avenue does not sit at the crossroads of the world because it sits at the southeast corner of 18th Street and Fifth Avenue. Nope, it sits ATCOTW because the #11D sale involved a Florida seller and an Oregon buyer. You don’t see that every day.

Speaking of crossroads and intersections in Flatiron … can anyone tell me why the building addresses don’t match on this part of Fifth Avenue. 108 Fifth Avenue should be across the street from this building, but sits two blocks away, on the southwest corner of 16th Street and Fifth Avenue. I have always wondered about that….

© Sandy Mattingly 2011