With luxury condo developments on the skids, a new report found the most-traded air rights have been targeted for office projects.
“For the first time in four years, people are buying more air rights for offices than for residential condominiums,” said Caroline McLain, president of Tenantwise, which has released a new report based on New York City filings.
Tenantwise calculated that the average pricing for office air rights in 2017 hit $315 per square foot, the highest in history. But that figure is reached only if you don’t count the recapitalization of the Grand Central Terminal air rights sold in 2016 but filed late in 2017 — and only for a portion of the deal.
“Office air rights had been selling for the low- to mid-$200s,” said Myers Mermel, chief executive of Tenantwise. “But now that JPMorgan Chase has paid in the $300s for synthetic land in Midtown, it’s a bargain. It will bring their overall construction costs down tremendously and make Midtown competitive.”
Other air rights are being purchased from religious institutions for both 270 Park and 405 Park for as much as $385 per square foot and will likely raise the average as those deals are consummated.
Elsewhere in Manhattan, prices for Hudson Yards office transactions in 2017 averaged $235 per square foot — down from the $258 in 2016.
