Penthouse 101: The History Behind the Pricey Real Estate
Once undesirable, penthouses are now some of the most expensive properties on the market.
There’s perhaps a no more extravagant experience than scaling a skyscraper and exiting the elevator into a palatial, top-floor penthouse. These apartments, considered the crown jewels of any apartment tower, have a unique history that dates to 1920s New York. Today, the penthouse accounts for an entire sector of the luxury real estate market, reserved for a select group of residents who prefer their palaces sky-high. From New York to Los Angeles, it’s the kind of property that requires just the right buyer willing to pay prices as high as their apartments.
The idea of a penthouse apartment was born in the 1920s, the decade known as the roaring twenties. Economic growth brought a construction boom to New York City and there was a high demand for living in cities. New Yorkers were packing into apartment buildings, initially with no desire to live on top of them. In fact, before the ‘20s New York City rooftops looked pretty bleak: pipes snaked between water towers and chimneys spewed dark soot. The tops of buildings were actually reserved for servant’s quarters, poorly-insulated clapboard structures often built illegally and intended to remain out of sight.
Newly-built luxury apartments around Central Park began to advertise more formal servant penthouses as a building amenity. But as apartments grew taller, fashionable New Yorkers developed a new taste for the amazing views that came with. In a change of preference, these residents evicted their servants in order to illegally sublet the penthouses upstairs. In 1925, the city changed the laws to fully legalize penthouse living, and the rest is history.
Marketing the Penthouse
As New Yorkers began considering the top floors of buildings desirable real estate, developers seized on the opportunity. They marketed penthouse apartments at premium prices, billing them as homes right in the heart of the city, still far above the noise and crowds of urban life. And they catered to the New York elite.
One of the first luxury penthouses designed atop a building was for cereal heiress Marjorie Merriweather Post – and it proved developers had the ability to build mansions in the sky. In 1925, the George Fuller Construction Company wanted to develop a 14-story apartment house on the site of Post Hutton’s mansion. She agreed, only if Fuller recreated much of her 54-room home on the building’s top three floors. The resulting penthouse boasted a wrap-around terrace on its highest floor, 12 wood-burning fireplaces, 17 bathrooms, two kitchens, a wood-paneled dining room large enough to invite 125 guests for a formal sit-down meal, a bakery, cold-storage room for flowers and furs, wine room, pair of coat rooms (one for the ladies, the other for gentlemen), gown closet, sun porches (one for sleeping) and a playroom.
The Modern-Day Penthouse
These days, penthouse designs fall short of Marjorie Merriweather Post’s palace. But buildings have gotten taller, meaning that the views from top-floor pads have only gotten more impressive. According to Corcoran agent Scott Stewart – now marketing the penthouse at the Upper East Side development 20 East End Avenue – the penthouse refers to the top floor unit of any tall residential building. “They could be cream of the crop or they could be run of the mill,” he says. But in new, luxury developments, the space is still considered the showpiece of the building, often priced highest out of all the units. “In the luxury market, these are often full-floor units, with incredible ceiling height, large windows and views,” Stewart says.
The Penthouse Buyer
Given that these apartments are priced into the multi-millions, “it’s a rare buyer,” Stewart says. Deep-pocketed apartment hunters looking for outdoor space are often drawn to penthouses, given that the setback design of many of these apartments allows for private terraces. Accomplished musicians, Stewart notes, enjoy the fact that there aren’t apartments above them to disturb. And finally, international buyers looking for trophy properties around the world prefer the upper floors. Agents will go to great lengths to show off penthouse properties, hosting luxe events and parties to lure buyers with picky, refined tastes. “These are buyers with the luxury of not having to make an immediate decision,” Stewart says. “They are really waiting for that special penthouse that checks off 99 percent of their boxes to make them happy.”
Now on the Market
So what’s out there on the market when it comes to penthouse units? In New York, one of the most expensive homes now for sale is the penthouse apartment atop 432 Park Avenue, the tallest residential tower in the country. With sweeping views of the city, it’s asking a whopping $82 million. The top two floors of the world's first Art Deco skyscraper, 100 Barclay, are also up for grabs, asking $59 million. And the duplex penthouse atop the Baccarat Hotel & Residence, in Midtown Manhattan, is a relative deal at $39.9 million.
Penthouses, of course, aren’t limited to New York City. In Chicago, the upper floors of the former Montgomery Ward's Observatory have been converted into the $4.975 million penthouse unit, boasting views of the city skyline to Lake Michigan. At the new Downtown Los Angeles tower Level Furnished Living, you can rent out the top-floor duplex penthouse (complete with 13-foot floor-to-ceiling windows) for a cool $100,000 per month.