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JPMorgan To Buy Grand Central's 700K SF Of Air Rights From Michael Dell, TF Cornerstone

Grand Central Terminal, Whose Valuable Air Rights Are Among The Questions For The Midtown East Rezoning.

JPMorgan Chase is progressing on its ambitious plan to demolish its headquarters at 270 Park Ave. for a massive new building in Midtown East.

The banking giant is in negotiations to purchase 700K SF of air rights above Grand Central Terminal, Crain's New York Business reports. The historic train hub's 1.35M SF of air rights is owned by a combination of MSD Capital, TF Cornerstone and Argent Ventures.

MSD Capital, the company formed to manage the assets of Dell founder Michael Dell, and TF Cornerstone own the majority share in the air rights as a joint venture, and Argent owns a 10% stake. Together, their air rights deal with JPMorgan is worth about $300/SF, according to Crain's. Grand Central's 1.35M SF of air rights is the most for any single property in the neighborhood, with St. Patrick's Cathedral in second place with 1.2M SF.

The air rights sale to a building that does not directly neighbor the terminal is only possible due to last year's Midtown East rezoning, of which JPMorgan Chase is the first to take advantage. While it opens up the area to the possibility of substantial new development, it also requires participants in an air rights sale to donate a portion of the proceeds to the city for public improvements.

The $300/SF price is the minimum laid out by the rezoning plan — any cheaper, and the participants would still have to pay the city as if the deal cost $300/SF. The share the city will receive is expected to be $40M, and the sellers anticipate contributing additional funds to the Metropolitan Transit Authority for Grand Central maintenance.

If JPMorgan's purchase goes through, it would represent a significant step toward making the largest voluntary demolition in world history a reality, despite the sizable environmental impact such a procedure would have and over the concerns of preservationists.

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