Thursday, March 7, 2013

The market for air space in Manhattan

The real estate market in Manhattan doesn't just scrape the sky, it hovers over shorter buildings too: The Great Air Race

"Air rights are, in actuality, not fluffy chunks of available or orphaned air. They are unused or excess development rights gauged, like building density or lot size, by the square foot and transferable, when zoning permits it, from one buildable lot to another. They have become the reigning currency of the redevelopment realm, major components in the radical vertical transformation of the city’s skyline.

"These days developers don’t just tailor their blueprints to the lot they own: they often annex, for fees that can run into the multimillions, the airspace above and around their property. The process, essentially an invisible merger of building lots that tranlates into taller, heftier towers with increased profitability, is emerging from a minislump dictated by the economy.

  “The trading of air rights is more prevalent than it’s ever been before,” said Robert Von Ancken, an air-rights expert and appraiser who is the chairman of Landauer Valuation and Advisory Services, “and it’s why you’re seeing these monster buildings springing up all over town. All of these new supertowers that are changing the look of the city’s horizon, they couldn’t happen without air-rights transfers.”

"Mr. Von Ancken estimates that air rights trade for 50 to 60 percent of what the earth beneath them would sell for. "

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