Issue 96 – Straight to the Top: A Guide to Penthouse Sales

Some say it’s lonely at the top, but in the case of penthouse sales, it’s usually quite exquisite there. Owning a penthouse has a certain cachet. The word conjures images of great splendor: sprawling views, open space and literally everything beneath your feet.

According to Curbed, “The city’s official building code defines a penthouse as ‘an enclosed structure on or above the roof of any part of a building,’ which is designed or used for human occupancy.” But when most see the coveted “PH” in an apartment address they immediately think of a mansion in the sky. “Condé Nast built one of the first at 1040 Park Avenue, a duplex that had multiple salons and a ballroom,” Curbed explains.

Investing in one of these gems can offer a top-notch living experience and because they are in a limited supply, they can be a great investment when it comes to resales.

I’ll rundown everything you need to know about investing in a penthouse apartment – the good, the bad and the absolute lovely.

First, the pros, of which there are many. There’s something truly luxurious about having no one living above you – the quiet, the privacy and the open expanse of sky are all wonderful details when owning at the top. Ultimately snagging a top-floor prize offers the commodity of space as cities tend to grow up. Many people think of a penthouse as simply meaning “top floor” but they are also typically associated with an outdoor component. Some even have private swimming pools, gazebos and/or massive gardens with trees flown in to create a verdant oasis among the clouds. Other penthouse amenities can include greenhouses, grilling stations, full kitchens, dining areas and lounges. A private-key elevator is atop the list of truly “you’ve-made-it” features.

While penthouses can be found in most buildings in all areas throughout NYC, the most premium tend to reside in high-end areas and can be comprised of multiple floors.

According to an article in Brickunderground this fall, “Historically, the Upper East Side and the Upper West Side in particular are known for stunning penthouse homes that sometimes do not change hands for decades. Many offer sweeping views of our city’s crown jewel, Central Park.”

As such, with the purchase of many of these coveted spaces, one also gets unfettered access to private outdoor space – which is always a huge selling point. The benefit of buying a penthouse is that you don’t have to leave your apartment to enjoy the outdoors and can do so without having to share it with other residents. It gives apartment living a more private home feel without the purchase price of a townhome, and in most cases, provides you the security of a doorman and full services and amenities, such as an on-site gym. Yet, you get to feel as if you are living in a townhouse in the sky!

There are few drawbacks. Of course, it is wise to do your due diligence prior to purchase. Take care that the roof membrane is sound that there are no inherent latent defects. Make sure that water and drainage is maintained throughout the year and checked consistently. Once you own, repair should be made in real time without delay, to avoid any headaches. Wind and other environmental factors need to be considered and addressed if one has furniture or free-standing foliage that could become dislodged during storms. As it relates to insurance, homeowners’ insurance is pivotal especially when you’re owning more equity via roof or terrace. Penthouses are not for everyone. Those fearing long elevator rides or heights – think: vertigo — may have to factor in the possibility of discomfort.

Also, penthouses don’t usually come cheap. According to Brickunderground, “Penthouses are generally much pricier than the other units in the building given the size and property attributes that make them unlike any other space in the building.” Because they are in limited supply – inventory is currently down 20.8% now — we are finding that penthouses typically garner approximately 30% premium to lower floor units by simple fact that they have the more impressive location of outdoor components — light and view – and are usually boasting the highest end features and finishes. While co-ops tend to be about 10% less pricey than condos, top-floor spaces tend to be the costliest in the building. StreetEasy reports out of the 523 listings in February in NYC, the median of these listings was $3.675M – more than 3x the median for all other listings ($1.005M).

And for those seeking the benefits of top-floor life without the exorbitant price, you can still snag a penthouse in a less luxurious building. Forgo the high-rise skyscraper and head to a more modest building. Even a walkup offers penthouse homes. There’s no question that there’s always a consumer that will be happy to hike up a few flights to have that terrace and light. While I think the ultimate prestige is the ability to open your bedroom door and walk out onto a terrace, forgoing a traipse through a communal area or stairwell to get to the roof, some people don’t care as long as they have access to a private space to call their own.

When it comes to penthouse sales, clearly the sky is the limit and the market has taken notice. At the beginning of the year Mansion Global reported a duplex penthouse in Central Park Tower asking a whopping $149.5 million lead New York City’s Housing market that week. It was one of 19 contracts signed for homes asking $4 million!

In that vein, here’s a prime example which signifies the exact reasons penthouses are so special to the highest degree. Most recently, I sold one on West 27th Street for $17.995 million. This was Isay Weinfeld’s first residential commission in New York City. This four-bedroom, four-bath penthouse spans over approximately 4,500 interior square feet, with an additional 4,500 square feet of exterior space. The duplex featured an outdoor private swimming pool, an indoor atrium and Weinfeld’s signature design: a spiral staircase. My London buyer understood its unique craftmanship and scooped up this trophy. It is exciting to have the ability to procure something truly special that will perform well over time.

While this one is gone, according to Jonathan Miller of Miller Samuel there are currently 401 penthouses listed for sale in Manhattan, roughly 5.4% of all currently active listings. With the spring season promising to be quite busy, now is a great time to make your penthouse fantasies a reality.