It’s a very complicated mathematical formula that has plagued experts for years.
Why do the letters “PH” add to the cost of a condo?
The questions that need asking in this blog post are twofold:
1) What exactly is a penthouse? How is it defined? What features does it have, and what makes it special?
2) Why, and what, if any, extra value should be assigned to a penthouse?
The questions and the answers are intertwined.
I showed a penthouse condo on Sunday, and after marvelling at the size, style, features, finishes, layout, view, and privacy, I said to myself, “Now this feels like a penthouse condo!”
But the fact of the matter is: I rarely get the penthouse “feel” from a penthouse.
Is that because Toronto penthouses have been so watered-down? Or is it because most of them are unspectacular?
I wrote about penthouses last year when I became frustrated with the following:
I don’t want to re-hash an old blog post, but this is the elevator in a Bay Street condo that has 32-storeys.
And SIX of them are penthouses!
As I wrote last year, PH6 is really just 28; PH5 is just 29, and so on, and so on, until you reach a point where you think the “PH” actually has merit.
So what DOES have merit when it comes to a penthouse?
Personally, I think a penthouse has to be on the top level. Isn’t that the point? To be at the very top – the very best! With nobody above you, nobody looking at you, and to have the most unique product in the building!
Having said that, there are scores of buildings in New York City with “Upper” and “Lower” penthouse, and some say that the term “penthouse” itself was defined in the Roaring Twenties in NYC. But to have PH1, PH2, PH3, PH4, and so on is utterly ridiculous, in my honest opinion.
Why stop at PH6 as they did above? Would PH7 have been ridiculous, but PH6 was acceptable? Why not PH10, PH11, and PH12?
A penthouse is supposed to be unique and special, but it no longer is.
A penthouse should be one of maybe two units, on the top floor of a building, that are large, sought-after, and separate themselves from the masses.
But in the case above, where you have PH1 to PH6, you can guarantee that some of those units are $1,000,000, and some of them are $300,000. What’s so special about a 1-bedroom, 1-bathroom condo on PH5? Is there anything attractive about this?
That’s not a rhetorical question, or at least it’s not meant to be. I’d love to hear from some of my readers, if any of them have PH units, and I’d like to know if they assigned any extra value to the PH, or if they feel they’d want more for the unit when they sell.
It reminds me of a discussion I had around this time last year…
I was selling my old condo at 230 King Street – a 1-bedroom on the 2nd floor with a massive terrace.
Another agent in my office was going to be selling his unit, and he had the identical model – 15 floors higher.
His unit had no terrace, which was, in my estimation, the entire draw to the unit. The interior itself was only 600 square feet, but the terrace was 440 square feet, very private, and with 17 trees and loads of flowers and shrubs. It was a backyard, but in a condo.
I told my colleague that I was going to list around $349,000, and he said, “We’ll probably do the same.”
I was utterly confused, since the outdoor space he had amounted to a 6 x 4 foot balcony, but then he said those magical words:
….yeah, but ours is the penthouse…
Right! I forgot!
Your 17th floor unit isn’t just on the 17th floor – it’s on the penthouse level!
Does it say “PH02” on the door?
Does the elevator have a “PH” button or just a “17?”
How much to those two items matter when assessing a penthouse? If it doesn’t say “PH” on the door, and it doesn’t say “PH” in the elevator, then are you even living in the penthouse? The crazy thing is – you know that somewhere, some place, there is a person saying, “I live in the penthouse” even though there are no identifiers – no “PH” in the elevator, on the door, on the mailbox, or on the mail! But by the definition of penthouse, would that person be wrong for assuming that the top floor = penthouse?
As for my colleague, fifteen floors above me, he assumed that the “P” was worth about $10,000, the “H” was worth another $10,000, and when you put them together to phorm phe phletters “PH,” then suddenly you’ve got about $30,000 worth of value.
I think it’s a fair question to ask condo owners, both those with or without a PH – do you value those two letters? Would you pay more for it?
In my professional opinion, I think about 90% of the time, the answer is “no.”
There are cases where the PH is justified.
I have a client looking exclusively at penthouses – but not just those crappy PH5, 1-bedrooms that we alluded to above. He’s looking for a real penthouse unit – something that is not only spectacular, but exclusive, private, and secure.
He’s dodged issues with building-noise all his life, and his dream now is to live at the very top of the building, with nobody above him.
He admitted that he loves the idea of pushing “PH” in the elevator, but in a building with 50 floors, where the top floor has four units and all the rest have fourteen, there truly is something special about the penthouse!
We saw a unit a while back on Charles Street that was a penthouse in every sense of the word. It was about $2.4 Million and was one of the most impressive units I’ve seen this year.
The double front doors are very rare in Toronto, and again – this is something that distinguishes the penthouses from the rest! The unit was 2-storeys with 10-foot ceilings on both floors, completely open concept, and about 2,000 square feet of terrace space on the upper level, with a panoramic view of Toronto that will likely never be obstructed.
It just “felt” like a penthouse unit; I don’t know how else to describe the sensation.
The owner of that condo would be utterly spoiled – just consider things like the massive shower with about ten jets in addition to the rainforest shower head. Or the custom closet organizers that makes you want to marvel at your wares for hours. Or the laundry room that was an actual room, complete with Caesar-stone counters, as if you need those in your laundry room.
You were surrounded by glass windows, which in this building, meant you looked out at nothing but sky.
Living in a condo means living in the sky, as opposed to on the ground, but this was like a whole other stratosphere.
This condo was a “Penthouse” in every imaginable sense of the word.
And having seen it, I have to wonder why anybody would be attracted to that 1-bedroom on PH5.
Consider the idea of a “Winner” for a moment. There can only be one winner, and everybody else, are thus losers. You can have the “First Runner Up,” “Second Runner Up,” and as many as you want! But there is only one winner. There are no “Winner1, Winner2, Winner3” and so on.
If we can have “First Runner Up” and “Second Runner Up,” then what about having “Lower Penthouse 1” and “Lower Penthouse 2,” for example. I still don’t like it, but it’s the lesser of two evils.
The idea of PH1, PH2, PH3, PH4, PH5, and PH6 is insulting. It reduces the unique and special appeal of the PH itself, and insults the intelligence of the people looking to buy on the 28th floor. Because you just know that there are developers in Toronto assigning a few thousand dollars extra to those PH6 condos, when in fact, they’re exactly the same as the units on PH7, which is actually called “Floor 27.”
So does P +H = $$ ?
It does, in pretty much every case. That’s clearly why developers keep pushing the envelope with how many PH levels they can create!
But I wouldn’t pay more to live on the 17th floor in #PH01, than to live in the same unit on the 16th floor – #1601.