The inspiration for this blog post arrived in a really, really strange way.
You know when you hear a word for the very first time, you end up hearing it again like five times in the next three days?
Well in the past two weeks, I’ve had three very strange conversations about square footage, all to do with ways in which the square footage isn’t really square.
Does that make sense?
Yes? No? Probably, once I explain it, but not really?
Yeah, I get it. So let me offer the following three scenarios…
What about cubic footage?
I believe I wrote a lengthy blog post about this maybe five or ten years ago, but the conversation came up again this past week, and it got me thinking.
I was called in to evaluate a unique hard loft, and I mean “hard” in the very truest sense of the term when it comes to lofts. This was a converted industrial space, now residential units, complete with fluted concrete pillars, cinder-block and brick walls, and exposed ductwork in the soaring 14-foot ceilings.
My evaluation was looking units that have sold in this building, and this building only.
Seems like the best way to look at value, right? It’s what I always do, and what I would expect nearly all agents to do.
The seller had other ideas, however.
After I presented my CMA and gave him an approximate value, he pulled out a presentation of his own!
He claimed that comparing his unit to others in the building had “some merit,” but then proceeded to look at comparable sales from neighbouring buildings, and make adjustments based on his soaring ceilings.
Did he have a point? Maybe. But his numbers were Trump-esque.
His ceilings were 14-feet high, and I valued his loft at around $930 per square foot, again, based on comparable sales in that building.
He looked at sales in three buildings in the area, none of which were as comparable as, well, you know – his building, and then made an adjustment for CUBIC FOOTAGE!
His argument was simple: other lofts have nine or ten foot ceilings, and his have fourteen-foot ceilings.
So if those other lofts were selling for $850 per square foot, with 10-foot ceilings, then his loft should be an additional 40% premium because of his 14-foot ceilings.
I know what you’re thinking, and my mind was racing like yours is right now, thinking of all the retorts I had, and which made the most sense.
I told him that high ceilings were a feature, not unlike a terrace, a walk-in closet, a BBQ gas line, an exposed brick wall, etc.
I explained that the reason we look at square footage is because it’s the easiest way to level the playing field. We might add/subtract value from a comparable unit for a feature, ie. if a comparable unit has a 200 square foot terrace, we might subtract $40,000, and then, all other things being equal, divide by the square footage to find a comparable value.
The same would be true for high ceilings.
He continued to argue.
“You’re buying space,” he told me. “And you get more space with fourteen-foot ceilings than you do with ten-foot ceilings.”
I didn’t know if I was going to win the argument, considering we were sitting in his condo, with his high ceilings, so I asked him a very simple question:
“What do you do up there?”
“Up where?” he asked.
I motioned above our heads, and said, “Up there.”
He was a bit stunned, not really insulted, but I would like to think perhaps the reality was dawning on him.
“We price condos based on square footage because that’s useable, functional, livable space. You can’t really live up there in the air above your couch.”
He nodded along, and I assumed he was following, but then he said, “Well if you’re buying vacant land, you might price it based on buildable square footage, according to how many storeys you can get zoning for.”
I suppose I could have followed up with, “Are you building another storey above our heads?” but I wasn’t looking to be condescending, and while often that drives the point home, I wasn’t sure it would help at this point.
If a loft had 16-foot ceilings, you could, in theory, build a platform for additional square footage. You would have to get approval from the Condominium Board, and likely submit architectural and engineer’s drawings, but it’s not impossible.
In some condos, like the Tip Top Lofts, there are platform areas above existing space, ie. storage areas overtop of the bathroom, or in some cases, a ladder leading to a desk and chair on a platform above the bedroom, but in this case, you’d have to be 4-feet tall, or never stand up.
I had a friend who lived in a bachelor unit in the Kensington Lofts and his bed was on a platform on top of the bathroom ceiling. He had to climb a ladder up and down, and it was not a spiral staircase or anything – it was an actual ladder.
When this property went up for sale, do you think we marketed that space as square footage?
That’s not square footage, and to suggest as much would be false advertising (as though there were such a thing in our line of work, but I digress…).
In the case of the evaluation I described above, the owner wasn’t looking to build additional square footage; he was just looking to argue about value, as though if he could win me over, it meant he would win the market over.
To suggest a 40% premium was warranted for air rights was silly, and I told him as much.
I explained that true value exists only in the form of what a buyer would pay, and not how a seller values it, or even what a seller pays. Think of the concept of superadequacies; if you spent $25,000 on a feature in your home that you value, but most buyers don’t, then it doesn’t add $25,000 in true value. Commission a bronze statue of yourself to be cast, and then install it on your front lawn. Do you think whatever you paid for the statue should be added to the value of your house?
When looking at 14-foot ceilings in a loft space and comparing to a similar unit with 10-foot ceilings, I would recommend a lump-sum adjustment. This was a 2-bed, 2-bath unit, just under 900 square feet, so I might be inclined to suggest the ceilings add $30,000 – $40,000 in actual value as a feature. The truth is, many buyers won’t care. Many buyers see this as less efficiency for heating in the winter months, and an additional cost.
What about triangular footage?
No, really, I’m serious.
Picture a wall in a room, and think back to…….in whichever grade they taught us geometry, and identify the angle.
It’s 90-degrees, right?
All walls are 90-degrees, we know this. This is nothing new.
So when we look at square footage, save for the 1/2-inch baseboards sticking out from the wall, we’re basically looking at the square footage as though it’s all functional, because the walls are at a 90-degree angle.
But what if the walls weren’t?
What if the walls were at a 70-degree angle? Or a 45-degree angle?
I’m not making this up just as an experiment or anything, this is a real conversation I had with a client recently about lofts in converted spaces that have gorgeous original architecture, but often skim functional square footage as a result.
Have a look at this:
Notice the space where the flat-screen TV is?
Notice all the space, from left to right, under the first perpendicular timber column?
Notice how zero of that space is functional?
How in the world would you address price-per-square-foot in a unit like this?
I know, you’re looking at the beautiful stained-glass, and the rare, sought-after timber beams, and thinking that this is a true first-world-problem, and simply an embarrassment of riches.
I’m not denying that this loft is unique, but I am telling you that, having been in this space and many like it, the rooms often lack function.
There’s a reason why the TV is on the floor, right? There’s a reason why it’s under the slanted-ceiling?
That’s complete dead-space, and it’s because of the angle of the wall. The pillar doesn’t help either, but that’s a whole other topic. As a result, the couch is pushed to one side of the room, the TV is on the floor, and there’s a ton of wasted square footage.
So how do you account for this space?
You don’t. On paper, that is. I can almost guarantee that this property was sold from the developer based on square footage, and the existing owner is doing the same. If this unit is, for argument’s sake, 900 square feet, they will undoubtedly market it as such. But where that TV is, say up to the first pillar, is not functional space. In my opinion, the space doesn’t become functional until you’re standing halfway between the two black pillars. So call it five feet from the wall, times twenty-five feet across the length of the condo, and suddenly you’re losing 125 square feeet of actual square footage.
Surely this has to be taken into consideration in the eyes of a buyer, no?
Would you make an offer, at the prevailing “price per square foot” in the building, for this unit? Or would you make an adjustment?
What about angular space?
Any fans of The Simpsons in the house?
I haven’t watched this show in at least fifteen years, maybe more. But we all remember the “Fallout Boy” episode, where Millhouse gets chosen to play Fallout Boy in the movie. Remember when they finally wrap the “Jiminy Jillikers” scene, and the producer pipes up and says, “We have to get it from different angles!”
Well, that’s what I always think of when I enter condos with really angular floor plans.
And on occasion, I’ll test my clients to see if they were Simpsons fans when they were younger.
Case in point, this awful layout:
Okay, where do we start?
Perhaps at the front of the condo.
So the den has no real issues here, with a perfect 45-degree right angle on the left side, except that because the kitchen is tilted on an axis, it basically flows right into the den.
So you don’t really have a den. You have a kitchen-den, with a weird layout.
The living room offers a similar situation. If you stand in front of the bathroom, at a slight angle, the room looks square. Except that it’s not, and you’re going to feel it, as the angled kitchen, and square den, confuse the hell out of your eyes. Trust me – I’ve sat on the couch in this layout before many times, and it’s like a fun house.
Most people end up placing their TV on that 120-degree angle wall in the southeast corner of the room, and then tilting their couch on an angle.
Goddam angles. It’s all about ANGLES!
The smaller bedroom only has one corner that’s a right-angle, and the others are all out of whack. Add in that brutal pillar, and you create a dead space in the corner, which also blocks out most of the natural light in the room.
The master bedroom has no odd angles, but does have a pillar – the third such pillar thus far in the condo.
And lastly, the “office,” which for some reason is accessed through the master bedroom, gives us one more angled wall, one more pillar, and a room that 99% of people end up using as a closet.
If I were marketing this property, I would probably play on the fact that with all the angles, you end up with multiple exposures, most notably: southeast, northwest, south-south-west, north-north-east, south-north-west-west, Kanye-north-west, south-west-airlines, north-jupiter-pluto, and fifty-four-forty. Hey, if you got it, flaunt it!
Any other square footage oddities that you’d like to share?
I’m all ears…