Tuesday, February 21, 2017

The Value of Outdoor Space

Private outdoor space in New York City is a luxury to say the least. Whether you're peering over from your balcony to buzz up the delivery man, sipping the morning coffee on your terrace, watching the sunset from your roof top cabana or grilling "shrimps on the barbie" in the garden with your friends – a balcony, terrace, cabana, or garden space is just about as "outdoorsy" as it gets in NYC. This week we are featuring a look at the value of this precious outdoor space that we love so dearly.  

Q: How do you put a price on outdoor space?
A: Pricing outdoor space is determined by a number of factors. First, one must consider the use of the space, design, size, views, private or shared, and its proximity to the kitchen.  For example, private terraces are obviously priced higher than shared terraces. Being able to walk out to terrace from your bedroom is convenient, but having a balcony or terrace with an entrance from your living room is more desirable for entertaining guests and more valuable. Who wants to have theirs guests traipse through their bedroom to get to the outdoor space. Size clearly matters too, but there is a sense of utility placed on every space.  For example, 500 square feet (SF) is perfect for a table, lounge area and grill area, but perhaps a 1,000 SF is just not necessary. In this case, many buyers may not want to purchase an expensive space like this so the buyer pool is narrow and hence base on supply and demand, the value will typically be less per square foot if the space is too large. 

See below for different multiples to be applied to outdoor space in order to arrive at the fair market value. These multiples are applied to the interior price per square foot of the given building. 

Garden space: ~25%
Outdoor space with views: ~50%
Outdoor space without views: ~33%

Additional characteristics affecting the valuation of outdoor space include but are not limited to direct light, shade, views, layout, planted, noise level, quality, ability to grill, the building itself, location, privacy, etc. All of these factors will help to determine how the multiplier scale of ~25% to ~50% of the interior square footage of the building will be applied. 

What about BBQing in NYC?
Summer in the city is a season for entertaining, enjoying the outdoors, and of course barbecuing! Did you know that propane grills are not allowed in New York City? The NYC Fuel Gas Code states that you can't store standard backyard propane on a balcony, roof deck, backyard, or in a courtyard [1]

In FAQ’s for Those Lucky to Have Outdoor SpaceThe Brick Underground also shares that, “You can use a propane tank that’s smaller than 16.4 ounces in some cases. Remember, you can be slapped with fines of up to $10,000 or more if you don’t comply, although the law is mostly unenforced.”  Fines this serious are simply necessary because the fire department doesn’t have enough manpower or time to check every terrace, therefore if you’re caught violating the law and using propane gas to BBQ you will be fined.

On a brighter note, according to New York City’s Department of Buildings, “Cooking with a charcoal barbecue is legal on a terrace or in a backyard — but not on a balcony or roof. There must be a 10-foot clearance between the grill and the building.” If you get really lucky some buildings like 125 North 10th Street, actually have induvial gas line connections installed, so yes BBQing is legal, safe, and a favorite pass time for residents who own cabanas.

It could be a conversation piece, an additional extension for entertaining, or even your private escape from four walls - it's really not classified as traditional "living space", but regardless it's coveted space and adds value to your property. 



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