When I started selling real estate, nobody really cared about square feet. They definitely didn’t focus on it. Buyers had a budget, bedroom requirements, and a “wish list.” The wish list often contained certain things like a view, high ceilings, a fireplace, a doorman, a terrace, the preferred condition of the apartment, and the neighborhood. The “wish list” was the most crucial component of defining the attributable value of a home – not the number of square feet. I’ve sold apartments that were 2000 SF that felt like 3000 SF and visa versa. Suppose you took 20 architects and developers into a 5000 SF home and asked them exactly how big the apartment felt. In that case, you’d probably get 20 different answers. The “wish list” is where the gold is. If a buyer walks into a home and it resonates with them, they buy it. They don’t buy it because it meets their square ft requirement. Not all square feet are created equal. It is the intangible “wish list” attributes that make the ultimate value in a home. Things changed in the early 2000s when Wall Streeters with huge bonuses started buying fast cars and penthouses. These Alpha males started analyzing their purchases like a spreadsheet, thinking that it could help as a negotiating strategy. I saw this strategy backfire more often than not when they lost on a home after arguing that the $PSF was too high.
There are many different ways to measure square feet. In a commercial office building, the landlord (who leases their space by the foot) will include the elevator, and common hallways and measure the space to the outside of the exterior façade of the building. A tenant leasing a 4000 square feet floor plate might get charged for 5000 ft.2 In residential buildings, the square-foot representation varies as well. Co-ops refuse to represent the square ft for fear of misrepresentation. Condos are overseen by the Attorney General’s office (essentially the SEC for real estate). All offering plans include an architectural report that discloses exactly how the square footage is measured.
Then, as a marketing initiative, there was the suggestion to measure “cubic square feet” to accurately reflect the volume of the space. All this did was add ceiling height to the floor area. Savvy buyers saw this as a marketing ploy and buzzword, so it never got much traction.
For today’s buyer, the most critical data point is the “Cumulative Usable Square Feet.” This data point answers the question, “What exactly does my money buy me”? When you buy an apartment today, you aren’t only purchasing the apartment. You are paying for the access and use of the amenities. The total square feet beyond the four walls of the apartment. You own part of this space, and this has value. If the building has a gym, the apartment should be worth more. How much is it worth to a parent to have the ability to send your kids down to a fantastic playroom in the building? What about a squash and basketball court?
The “cumulative usable square feet” might come closest to quantifying this...
Let’s do this.
-Shaun