Heat rises, and what's hot is the Manhattan air rights market. A report issued by Tenantwise Inc., a citywide real estate services and advisory company, found that the average price paid in Manhattan for air rights rose an incredible 47-percent from 2012 to 2013, with the average price-per-square-foot for air rights, or transferable development rights, increasing from $207 to $305. Of the 34 Manhattan air rights deals in 2013, 40-percent were for the building of residential condominiums, 36-percent for hotels, and 16-percent for residential rentals, the Wall Street Journal reports. The Journal also notes that it's likely the cost of air rights is soaringhaving surpassed the height of the market's $244-per-square-foot fetch in 2007because the in-the-clouds, premium residences they're used to build have been fetching record prices as well.
Unsurprisingly, Extell is noted as 2013's most prolific user of air rights, having made seven deals that totaled 167,915 square feet, or 27-percent of the annual market. Strangely left out of the statistics was Vornado Realty Trust's massive acquisition of 3,936-square-feet of air rights for the development of 220 Central Park South, for which they paid a shocking $3,868 per square foot.
The rise in price of the air rights market has proven beneficial to landmarked buildings looking for extra cash such as Park Avenue's Christ Church, which sold 70,659-square-feet of transferable development rights for over $30 million to the Zeckendorfs, who are developing a neighboring 51-story condo on East 60th Street. Similarly, Chelsea's French Evangelical Church on West 16th Street sold their air rights to a group developing a residential tower. The sale, the church has noted, will allow them to make much needed upgrades to the crumbling, 125-year-old structure.
· Sky Is Limit for Air Rights in Manhattan [WSJ]
· All Air Rights coverage [Curbed]