Vavoom! up building value by design
Dear condo owners, co-op shareholders and building managers, let’s talk about the value of investing in a well-designed interior renovation/upgrade of the lobby, halls and common spaces of your co-op/condo building.
A building’s common areas—its lobby, hallways and other shared or amenity spaces —provide first impressions to visitors and prospective buyers. And for building residents, attractive, useful and well-maintained common areas make for more gracious livability. But co-op board members understandably need to evaluate not just how to pay for it, but also the payoff that results.
When board members and co-op/condo managers begin to think about an upgrade or renovation for these all important areas, they should not lose sight of the dramatic boost in building value and resident equity that a common-area makeover can provide.
Consider an analogy: Any co-op or condo has “curb appeal,” just like any single-family home in the suburbs. A prospective buyer’s sense of value is absolutely influenced by aesthetically pleasing first impressions, a real-world value that ultimately is also reflected in refinancing decisions and residents’ own sales of their apartments.
A consistent level of quality—style, modernity, and functionality—provides the message that your building is exceptionally well cared for and maintained.
The payoff can be impressive
According to Halstead, even when individual apartment units aren’t changing that much, those apartments can enjoy a tenfold multiplier effect in higher sales prices—per unit—when it launches and completes a lobby or hallway renovation.
That is, if a building puts in $5,000 per resident in lobby and/or hallway upgrades, the residents will see a $50,000 increase each in value per apartment. Even a modest $500 per unit—representing a modest remodeling of a lobby, for example—will net each of those residents a $5,000 boost when they sell. Further, it has been estimated that bettering a lobby area can increase property values from 7% to 15%!
Of course the most essential element driving the decision to take on a common space renovation is simply that people don’t want to live in an unappealing or worn environment. On a deeper level it’s about human senses of pleasure and security. People who feel enjoyment and security place higher value on the things that make them feel this way—even if they can’t put their finger on exactly why.
One cannot underestimate the poor financial effect of ugly or dated lobbies and hallways. While it may be difficult to put a precise dollar amount on the damage done by unattractive lobbies, hallways and shared spaces, there is agreement among real estate and interior design professionals that boosting their aesthetic appeal is a financially excellent investment.
Importantly, good design choices maximize the aesthetic impact of your investment dollars. Hiring a seasoned design professional skilled in working with co-op and condo boards and multi-family buildings is a good idea. There is a lot to consider and a design pro can help board members avoid making poor choices that end up wasting available funds.
The bottom line: Shareholder and resident enjoyment in their surroundings is important, but the residual financial impact of even a modest well-designed upgrade of hallways, lobbies and community rooms (not to mention a roof deck, gym or other use spaces) will have a tremendous impact on building value, as well as the per-apartment resale value for each and every resident.