The Real Deal

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Air rights, once coveted, plummet in value

The owner of 100 Vandam Street bought the building in 2006 intending to use the air rights to build a 10-story addition, but decided against it because of the market.

Two years ago, demand for air rights was, well, through the roof. "For residential use at the peak of the market, [air rights] were between $400 and $500 a square foot," said Stuart Siegel, executive managing director at commercial real estate firm Grubb & Ellis. The rights, often called development rights by those in the industry, were being traded by everyone from real estate giants like the Related Companies to small-time developers. The goal: to erect ever-taller buildings, with which to pull in more income. Stephen Lefkowitz, a partner at Fried Frank, which handled the transfer of several hundred thousand square feet of air rights from the St. Thomas Church on Fifth Avenue to the MoMa Tower to be built at 53 West 53rd Street, noted that at the time sales for air rights were "very active." more