Ask Curbed: What's My Roof Worth?

1.

A RE agent told me to determine the relative values of apartments in a building by starting with square footage and then making adjustments. 10% more for higher ceilings on the parlor floor, 10% less for lower ceilings in the garden unit, for garden access add 50% of the garden square footage, etc. Maybe it would make sense to value the roof at 50% of the square footage too (though presumably the buyer would have to pay to build a deck, so maybe it should be a lower percentage).
Hope that helps.

2.

If the new owner intends just to build a deck or temporary structure on the space, it would suggest a lower value than if they intended to build living space. This is because permanent construction would eat into any FAR that the building might have left over, lessening the amount of air rights available for use or sale.
You'd want value the space at the highest and best use, that most likely being sale of development of the unused FAR. However if there is little or no liklihood of that use taking place, there may be an interest for the building to value the rights to the roof below 'market' to realize the income.

3.

How about the good ol' DCF method? To value the roof easement, you could determine how much it adds to the apartment's market rental value.
Comb lists of past transactions to see how much of a rent premium a roof deck would command, and value the projected additional cashflow to arrive at a price.

4.

I recently had the roof above my coop appraised by a professional firm (MMJ). Their calculations took into consideration: it's a Hell's Kitchen coop; a brownstone walk-up; I intend to license the space (not have shares issued) with a transferable 99-year lease; and it's currently undeveloped (needing modifications to accommodate a deck and a "live load", thus incurring construction & engineering costs).

They determined that similar walkup space in the neighborhood was worth $600/sq ft. They valued the outdoor roof space at 25% of that figure. Thus, they recommended that a 500 sq ft roof deck was worth a licensing fee of $75,000. This allowed for hard & soft construction costs of $100/sq ft. They also gave me a figure of 30% for any enclosed heated space. BTW, air rights are not affected if the space is licensed.

My coop thinks it's a little low, and we're still negotiating. Hope that helps.

5.

I am the president of my co-op and we need more capital for our reserves (we don't want to increase our maintenance fees). I'm thinking about selling roof rights to the top floor tenants (The roof is currently unused).

My question is - what are the steps to do this and who do I contact to help investigate and understand the logistics of such an offering?

6.

Hi Randy, I know it's been a while, but did you find anything else out about offering the roof rights to the top floor tenants? Our building may be interested in doing the same thing.