How Much Is NYC Outdoor Space Worth?
Originally seen on yoreevo.com
It’s one of the most common questions we get from NYC apartment buyers - how much is outdoor space worth?
The answer is an unsatisfying “it depends,” but if you want to know what it depends on, we’ve got you covered!
What Types of NYC Outdoor Space Are There?
When we’re talking about outdoor space, we mean private outdoor space, usually connected to the apartment (but not always).
Many buildings have shared outdoor space like a common roof deck or courtyard. Those are nice but not going to be a material driver of an apartment’s value. There are four main types of private outdoor space you’ll find when browsing NYC apartment listings.
Balcony
The most common form of outdoor space you’ll find in NYC is a balcony. These protrude out from the building and therefore are limited in size.
You’ll usually find these in buildings constructed in the second half of the 1900s and they’ll be 50-75 square feet.
A much smaller type of balcony is a “Julliet balcony.” If you’re familiar with the play, you’ll understand why - it can fit one standing person and that’s about it.
Terrace
A terrace is basically a balcony that sits on top of another apartment. You get these when a building tapers off as it gets taller. Since it’s not protruding out of the building, a terrace isn’t limited in size. The building can taper off quickly, leaving a lot of space to be used as terraces.
An added benefit of a terrace is there isn’t another terrace above it so its owner gets to enjoy open skies and views.
Private Backyard
You will pretty much only find private backyards in Brooklyn where a townhouse has been cut up into a few condo units and each floor is its own apartment. Manhattan townhouses don’t get chopped up too often which means you’ll need to buy the entire townhouse to get the backyard in which case, good for you!
In Brooklyn townhouses, the backyard usually comes with the garden floor + basement apartment. It makes sense logistically but is also a tradeoff with the negatives that come with the bottom two levels, namely light, privacy and pest concerns.
While we understand why buyers would have all three concerns, the only one we’ve found to be material is light. There’s no getting around it - you’re not getting much light on the garden level and especially the basement, but you can go in the backyard and get all the light you want!
Private Roof
The last common type of NYC outdoor space is a private roof. Most commonly these spaces are attached to top floor units via a staircase inside the unit but not always.
Some newer buildings will offer private “cabanas” on the roof for purchase so the owner of a studio apartment on the second floor can also have their own private roof space.
As you can imagine, private roof space that is not connected to the apartment is not as desirable since you have to go up and down via the building’s common areas with food, drinks or to use the bathroom.
How Has The Value of NYC Outdoor Space Changed?
The value of NYC outdoor space increased with COVID. Having more space to stretch out - both inside and outside - has become a priority for buyers and renters alike.
This was a large part of the reason why Brooklyn took off immediately after lockdown restrictions were lifted - outdoor space is much more prevalent in Brooklyn and it’s actually affordable.
We’ll get to the details below but normally outdoor space is valued as a percentage of the interior space. It’s very much an art versus a science but whatever the percentage someone wanted to use in their analysis pre-COVID, it’s now higher and there’s no reason to think it will go back down.
How To Value NYC Outdoor Space
The overarching theme when valuing NYC outdoor space is usability. There are tons of apartments with private outdoor spaces that are either unusable or, at best, of very little value.
The most obvious example of low value outdoor space is a Julliet balcony. Unless you want to put one lawn chair out there and drink your morning coffee (but you’ll have to hold it because there won’t be room for a table too), all you’re going to do with it is put a plant or two out there.
On the other end of the spectrum would be a reasonably sized terrace with expansive southern facing views, gas, water and electricity and a jacuzzi (if that’s your thing).
The most common metric you’ll hear is outdoor space is worth 50% of indoor space but obviously you’d pay more per square foot for that amazing terrace than you would for a Julliet balcony. Again, it comes back to usability.
We’re going to ascribe some ballpark numbers for each type of outdoor space but if you’re actually considering an offer, you should email (info@gumasplusteam.com) for a more detailed analysis of the property!
Balconies - In general, balconies are the lowest value outdoor space. The larger a balcony, the more valuable it is because you’ll actually have space to put out some furniture and enjoy it but balconies are usually limited in size because they protrude out from the building. We could even make the argument that some smaller balconies have negative value because you’re probably not going to use it and the balcony above blocks light from coming into your apartment. Most have value though and we’d say balconies are worth 20-25% of indoor space.
Disconnected Roof Space - Next up comes private roof space that isn’t connected to the apartment. Roof space is great but having to go through the building’s stairwell or elevator every time you want to use the bathroom or bring out a new dish isn’t. If the building has a common area off the roof with its own bathroom, it’s a little better but there usually isn’t. Disconnected roof space is worth 30-35% of indoor space.
Backyards - Backyards are huge which is great for overall value but because they’re so large, their relative value to the indoor space actually decreases. Think of it this way - if you had the choice between a normal backyard and another twice the size, would you pay twice as much for the latter? Probably not. The incremental value goes down as the space gets larger.
That being said, it’s actually pretty hard to strip out the value of backyards because they’re almost always packaged with garden floor + basement apartments so any value ascribed to the backyard is arbitrary. For that reason, rather than thinking about the value of a backyard, it’s better to compare a specific listing to nearby garden + basement + backyard comps to see what the entire package has been going for.
Connected Roof Space - The second most valuable type of NYC outdoor space is connected roof space. This is usually accessed by a staircase in the apartment. Since it’s connected to an apartment, these tend to be larger than disconnected roof spaces - only the top floor apartments are eligible to own all of the roof.
The main drawback of connected roof space is you still need to go up a staircase - not ideal when you’re juggling plates of food, multiple cups or a heavy cooler. Also, especially in Manhattan, just because you’re on top of your building doesn’t mean you’re on top of the world. Nearby buildings might still tower over you and block the sun.
But you’re still on the roof and will at least get some sun so connected roof space is worth 40% of outdoor space.
Terraces - The holy grail of NYC outdoor space is a terrace. With the apartment and terrace on the same floor, it’s much more usable and therefore valuable. Big bonus points if the terrace is off the kitchen or living room. This makes going in for refills convenient and allows for indoor / outdoor living.
Terraces also tend to be a reasonable size - enough to fit a table, chairs and some plants.
There's a big caveat regarding wraparound terraces, though, which are common on the Upper East Side. A wraparound terrace is a ~3 foot wide strip around the apartment. It's not very usable so it’s not very valuable. No table, no chairs, no value (or at least not much). You can fit plants and that’s about it.
But most terraces check every box for the outdoor loving NYC buyer and therefore are worth the most. Ballpark we’d say terraces are worth 50% of interior space but there are some truly special terraces that can be worth much more.
What Else To Consider When Valuing NYC Outdoor Space
Everything we’ve discussed is very general advice and there are some other things you should keep in mind when figuring out how much NYC outdoor space is worth.
How big is the outdoor space relative to the apartment? We once saw a studio apartment that somehow came with the entire roof. It’s hard to imagine how you could use that entire roof, even if you tried. It was a ton of outdoor space and pretty cool but if someone paid the 40% we mention above, they’d be paying more for the roof than the apartment.
How big is the outdoor space relative to your ideal size? Once you can fit a table, some chairs and some plants, you have to start wondering what you’ll do with the extra space. If you love throwing parties, yeah, maybe, but even then if you pay too much, it’ll be more expensive than renting out an event space. Take the wow-factor out of the equation and think about your day to day life before pulling the trigger.
Can you find a similar unit in the building that sold without outdoor space? For example, if you’re buying apartment #20A which comes with private roof space and #19A sold a few months ago without it, you can see how much they’re asking for the roof. Then compare those two options - if both were on the market, which would you buy?
Can you find a private cabana sale in the building? In condos, cabanas are often deeded separately meaning if you buy an apartment that includes a cabana, you’re actually buying two pieces of property. Sometimes a cabana will be sold from one owner in the building to another and the price will be recorded in the building’s transaction history, just like an apartment. You have to take these transactions with a grain of salt because they were not marketed publicly but if you can find two or three that sold around the same price, that’s a good indication of their going value. This trick also works for parking spaces if you happen to be interested in those.
And finally, at the end of the day, how much less would you pay for the apartment if it didn’t have the outdoor space? That’s all that really matters. If you’re not a big fan of outdoor space and it's not valuable to you, you probably shouldn’t be buying it.
This is all very general advice so if you’re considering an apartment with outdoor space and want our opinion on its value, email us at info@gumasplusteam.com or call us at 917.601.3585. Our business allows us to see tons of properties so we can let you know just how special that outdoor space is or identify any potential concerns.
