roof deck added at least $518,760 to penthouse loft at 16 Hudson Street

as penthouse week continues…
Finally a penthouse loft sale with enough building comps to attempt to estimate the premium paid for private outdoor space! The Manhattan loft #6E at16 Hudson Street sold pretty quickly on August 31: came to market on April 1 at $2.55mm, dropped to $2.299mm on May 13, contract by June 23, and that August 31 closing at the last asking price. The last four sales in the building were around The Peak, yet give some reasonable basis for assessing how much of the value in #6E should be allocated to the “well manicured approx. 1,300 sq. ft completely private, rose garden terrace with brick, ivy covered garden wall”.

Using the average of only the last two sales, without adjusting for condition or for the fact that these sales were in March and September 2008, that rose garden added $518,760 to the value of #6E. I suspect that the condition of #6E is not quite the equal of the lofts sold in 2008 and, of course, I would conservatively figure a 10% reduction for market conditions, 2008 to now. That new math would re-allocate more of the current value of #6E to the roof deck: $697,400.

my worksheet (extra credit?)

• #4B Sept 16, 2008 $1,775,000 “1,500 sq ft” $1,183/ft
• #3A Mar 5, 2008 $2,109,750 “1,860 sq ft” $1,134/ft

• 2008 total of “3,360 sq ft” for $3,884,750, or $1,156/ft

• #6E “1,540 sq ft” (interior) = $1,780,240 before adjustment
• “1,300 sq ft” roof deck = $518,760, $399/ft (34% of interior $/ft)

• with 10% adjustment for 2008 market conditions, $1,040 = $1,601,600
• “1,300 sq ft” roof deck = $697,400, $536/ft (51% of interior $/ft)

The condition of #3A was said to be “renovated”, with “open cook’s kitchen with top of line appliances, custom millwork and built-ins throughout, 2 renovated full baths”, yet it cleared in March 2008 (at The Peak) $49/ft lower than #4B 6 months later, with not much bragging about #4B. (#4B was later gut renovated, but The Market did not think that the renovation added anywhere near $550,000 in value.) Let’s say that ‘condition’ is not a significant factor in this interior space comp analysis.

For you people who think more data is better, I considered adding the two 2007 loft sales at 16 Hudson Street to the mix to comp the interior value. That would raise the problem of making additional adjustments for different market conditions in mid-2007, but the way the numbers work it really does not matter. Adding #3C (September 18, 2007 at $2,087,500 for “2,000 sq ft”) and #5E (June 27, 2007 at $1,875,000 for “1,500 sq ft”) barely moves the needle:

• 2007-08 total of 6,860 sq ft for $7,847,250, or $1,144/ft

taking The Miller back to the roof
The minimum value of the roof deck is $518,760, with a reasonable approach implying a value as high as $697,400, as we saw above. That is either 34% of the interior space on a $/ft basis, or 51%. How do those numbers stack up under The Miller’s rubric for valuing outdoor space (which we’ve used nearly every day this week)? There are some negatives to consider here, with the general approach that outdoor space has 25% to 50% of the value of the interior.

The deck is actually ‘too big’ (“1,300 sq ft” compared to the interior at “1,540 sq ft”), so you’d expect that to be a negative. (The Miller would, too, as he said “if the terrace is greater than 50% of the interior space, the ppsf contribution falls off considerably for the additional space over the 50% threshold”.) Personally, I would also ding the theoretical value because access to the roof is not direct from the living space, what The Miller calls “association” value (the only purpose to the upper level space in the loft is to be a bulkhead for the stairs.)

I would add premium value to this roof deck for two things: one of which The Miller did not specifically address, the other of which he suggested is not typically a consideration. I think that The Market just valued this roof deck at 51% of the interior space, despite the negatives above, because there are relatively few roof decks in Tribeca (scarcity should increase value, right?) and because the view from the roof is not only spectacular (“views of the landmark Woolworth Building, new Frank Gehry Building, Municipal Building & more”) but not available from the interior space (the not very large window face north and east).

unless it is the new traffic pattern
I have always loved this building, which truly has one of the great locations in Tribeca: just east of Duane Park, just north of Bogardus Triangle, with those two parks keeping this building from getting dwarfed by nearby buildings. The location is recently improved, with cars no longer being able to turn up Hudson Street from Chambers Street. I suspect that street traffic around this building is down by a significant degree (50%??).

I have not hit this very handsome building in a few years:

• September 6, 2007, 3A seeks to top 3C at 16 Hudson
• November 29, 2007, 16 Hudson contract / 3A beats 3C?
• February 21, 2008, new at 16 Hudson / once more into the breach (but higher)

© Sandy Mattingly 2011