Case Study: Determining the Value-added for Having High Ceilings

February 5, 2013 by Lucas Lechuga

Icon Brickell 4110 high ceilings

A high ceiling is a feature which is typically associated with a penthouse.  It can be difficult in these situations, however, to ascertain the value that is attributed solely to having higher ceilings.  This is because a penthouse typically also has other value-added features such as one or more of the following:

  • an upgraded master bathroom
  • an upgraded kitchen
  • the best view in the building
  • an unusually large floor plan in relation to other floor plans in the building
  •  additional parking spaces

Most importantly, a penthouse is rare and therefore commands a higher premium than the rest of the floor plans in the building that are in greater supply.

What if, however, we could hold all else constant in order to better determine the added value that is associated with having high ceilings?  In this regard, Icon Brickell presents itself as an interesting case study.  The penthouses at Icon Brickell do NOT have higher ceilings than the rest of the units.  However, certain floors do have higher ceilings.  In Tower 1 of Icon Brickell, floors 14, 15, 22, 28 and 41 have 16-foot ceilings.  In Tower 2, floors 14, 15, 22 and 41 have 16-foot ceilings.  The rest of the floors, including the penthouse levels, have 9-foot ceilings.  As a result, it is very possible, and highly likely, that a unit located on the 41st floor will sell at a premium to a comparable unit that is located on the 42nd floor.  Furthermore, the situation also presents the possibility that a unit located on the 41st floor will sell at a higher price per square foot than one located on the penthouse level.

Due to the lack of resales, there is no evidence to validate my assumption but I think we can all agree that a high ceiling is a feature that should indeed command a premium.  Of course, there are going to be those who would argue that they would never pay a premium for having higher ceilings due to the higher energy costs that would be associated but, then again, those are the type of people who likely wouldn’t pay a premium for just about anything.  I’m not here to provide everyone with an all-knowing answer as to what that premium should be.  The answer will be provided to us by way of our free market economy.  However, it makes for an interesting story to follow.

Which would you rather have, a penthouse located on the 57th floor with a 9-foot ceiling or a unit located on the 41st floor with a 16-foot ceiling?

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10 Comments on "Case Study: Determining the Value-added for Having High Ceilings"


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Anonymous
NC
3 years 7 months ago

Higher ceilings make a world of difference, I much prefer that then basically having the same exact unit as the rest of the builing just on a higher floor.

Also as for the value added features you mentioned that penthouses have; I think that may have been true in the past, all the newer buildings seem to have the same exact cabintery in the bathrooms and kitchens so unless the cielings are higher you are esentially getting the same exact unit just on a higher floor.

Anonymous
JinM
3 years 7 months ago

I agree they do make a huge difference in the feel of a unit and should factor into price. But, how do loft units factor into this case study?

In some of the building they will have ‘loft’ units that surround the parking garage. Many of these have higher ceilings than the rest of the building. Do the 1 floor (non-split) loft units typically sell for the same price per sq as the rest of the lower floors or do they usually sell for a good amount more?

Anonymous
Ok
3 years 7 months ago
the reverse approach would be to look at buildings with lower ceilings and compare them with curr std, lets say 9′ ceil. all equal what would be the premium for 9′? personally i would not consider living in any unit under 9′ – which would exclude most older properties. but ceiling info is not included in condo rankings as far as i see. i would think the best value would be slightly higher ceiling – like 10′ to 12′. i actually dislike anything beyond that and would deff not want to pay a premium for that. i think that lofts… Read more »
Anonymous
Ok
3 years 7 months ago

well, it costs to build higher walls, insulation, finishes.. mostly the higher loft cost is dictated by profit margins: fewer units per building, but overall the profit should be similar to reg.height building, no?
just saw paramount hgtv unit – and noticed that whole building is 10′ ceilings. a dream. anything on brickell like that?

Anonymous
Ok
3 years 7 months ago

it makes sense to be in a loft with a private view. unfortunately too many units in icon brickell look into another buildings in very close proximity. guess builders don’t really care. motorized blinds are an option – but why have a loft when you need to keep the shades down? oh, well, i sound anti-loft. am not. just find very few acceptable ‘in principle’. though i actually like icon hi-floors (above the tree line).

Anonymous
fqmiami
3 years 7 months ago

The other problem with unusable “air space” being counted in the unit SF is that it also counts for calculating the unit’s proportionate share of the building SF, and apparently for tax assessments as well (based on what I’ve seen at Infinity).

So if it means I have to pay taxes and maintenance fees on unusable loft air space, then no thanks. I’ll keep my 9 foot ceilings.

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