Manhattan air rights got more expensive in 2016

Number of deals fell, but dollar volume rose
February 08, 2017 10:06AM

Midtown East (Credit: Getty Images)

Air rights became pricier in Manhattan in 2016, as the dollar transaction volume rose despite a dip in the number of deals.

Developers paid $292 per square foot on average for rights to build taller, up from $277 in 2015, according to the New York Post, citing data from TenantWise. But the numbers may have been skewed by four massive and expensive deals at Hudson Yards for 843,293 square feet, which accounted for more than half of the 1,609,451 square feet sold in Manhattan in 2016.

The number of air rights deals fell to 31, from 51 in 2015, but the aggregate sum paid rose to $469.2 million from $434.6 million.

In November, The Real Deal reported that dollar volume on Manhattan air rights through the end of September totaled $70.69 million, a 74 percent decline from the year prior. Robert Shapiro, an air rights expert, told TRD that areas near the High Line were seeing air rights trade for around $750 to $800 per square foot.

Where prices are heading in 2017 is unclear. The planned rezoning of Midtown East could flood the market with air rights, and the city is currently debating whether to set a price floor for deals in the neighborhood.

“With the Midtown East proposal as well as a new look at the Theater District, the city is now looking to participate in air-rights transfers,” TenantWise’s CEO M. Myers Mermel said. “This could have a negative effect on nonprofits, churches and synagogues.” [NYP]Konrad Putzier