Rooftops to Penthouses
A new trend is about to hit the Buenos Aires real estate market. Following the lead of major cities such as London, Zurich, Vienna and New York, Buenos Aires is about to turn the rooftops of premium apartment buildings in high-priced areas into luxury penthouses.
Though foreigners, familiar with this newer phenomenon taking place in other world capitals, initiated the demand, prosperous Argentines are also interested in purchasing these new penthouses. The scarcity of first-rate properties for sale and the lack of free land on which to develope new high-priced properties in large cities, has led to this creative solution.
In Buenos Aires, emblematic, first-rate apartment buildings, mainly those constructed during the city’s Belle Epoch era in the 1930s and 40s, and those located in premium real estate areas, primarily Recoleta, are desired for this new venture. The ideal buildings would be six to eight stories high and would have a free rooftop space of 400 to 2000 m2, where one to four penthouses measuring 500 m2 could be constructed.
The developer would discuss the proposed project with the property owners’ commission and offer to purchase the rooftop. A six month option to buy would be drawn up; this would allow time to obtain the municipal building permits and modify the community property regulations. The goal is to have the existing property owners feel comfortable and accept the proposal. The entire process could take up to one year, but it would benefit the property owners by lowering community property costs and proceeds from the sale of the rooftop would be divided equally amongst the existing property owners.
The construction of the penthouse would take place off-site using a method called steel framing. The structure would then be placed on the rooftop. It is a light construction which does not require heavy equipment or machinery. It is quick and produces no noise or dust; therefore, it would not disrupt exisiting property owners.
An interested buyer would select one of the projects under development before it is finished. They would then be able to design their apartment and their terrace garden. The exterior of the penthouse would be constructed following the buildings’ architectural design.
It is estimated that the developer would purchase the rooftop at 50% of the value of the buildings’ constructed m2, and would then sell the completed penthouse(s) at 10-15% over the buildings’ constructed m2. The developer would be able to recover their investment within one year, with a 30% profit margin.
Taking into account real estate market prices in Recoleta and other prime Buenos Aires neighborhoods, the average price for a penthouse apartment would top one million US dollars.
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