Developers have realized that mechanical space – once considered a necessary evil – can significantly raise the value of buildings when placed strategically.
By increasing the height of mechanical floors – which house the building’s heating, cooling, electrical, ventilation and other systems – and placing them at the bottom of the building, developers are able to build more residential units at higher elevations, which command a premium price.
Vornado Realty Trust deployed the tactic at its 950-foot-tall luxury tower at 220 Central Park South. A full six of the building’s lower floors are given over to mechanical uses, with ceiling heights between 18 to 24 feet. In total, the gambit allowed Vornado to add 100 feet to the tower, Crain’s reported.
Bauhouse Group’s Joseph Beninati, which is looking to build an 80-story condominium tower at 3 Sutton Place, told Crain’s he planned to build 24-foot mechanical floors.
“Higher floors are more valuable,” Beninati said. “It’s a bedrock rule of real estate.”
That’s double the height of most of the building’s residential floors. The trick will add 100 feet or more to the tower’s total height, Beninati estimated to Crain’s. The firm is moving ahead with construction on the project, though it’s reportedly yet to secure financing for it.
“In general, a floor premium, controlling for other factors such as view, is 0.5% to 2%,” Corcoran Sunshine’s vice president of research Ryan Schleis told Crain’s.