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Offices Are Now Snapping Up More Air Rights In NYC Than Condos

An aerial view of Manhattan.

For the first time in four years, New York City developers are buying more air rights for office projects than for condominiums.

A report from Tenantwise, which analyzed the city’s filings, found the average pricing for office air rights last year hit the record high of $315 per SF, the New York Post reports.

“Office air rights had been selling for the low to mid-$200s,” Tenantwise CEO Myers Mermel told the Post. “But now that JP Morgan 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.”

For its new headquarters development at 270 Park Ave. JPMorgan is said to paying roughly $240M for Grand Central Terminal’s air rights, which are owned by a combination of MSD Capital, TF Cornerstone and Argent Ventures.

The bank is also reportedly discussing paying 100K SF of air rights from St. Bartholomew’s Church and another religious institution, the New York Times reported earlier this month.

A partnership of MRP Realty and Deutsche Bank Asset Management is also said to be buying 30K SF of air rights from St. Patrick’s Cathedral in order to develop an additional four floors at 405 Park Ave.

Those deals are for as high as $385 per SF, according to the Post, and will push up air rights averages once they close.

Prices for Hudson Yards office air rights transactions hit an average for $235 per SF in 2017, a decline from $258 the year before.