The increasingly lucrative market for thin air
Author James Bartlett Illustration Gavin Potenza
Paying millions for air might sound like a bit of a scam, but in crowded cities like New York and Los Angeles, owners can (and do) sell the empty spaces above their properties to neighboring owners wishing for unobstructed views. The way it works is if your building doesn’t meet its allotted height limit or occupies only part of a plot, then the remaining cubic feet are yours to sell. Laws concerning “air rights” date back to medieval times, but the market has soared along with our skyscrapers. Here, a few notable examples.
■ In the mid 1980s, developers of the U.S. Bank Tower in downtown Los Angeles paid more than $125M for the air rights of the neighboring Central Library. The 72-story Bank Tower also bears the distinction of being the first structure to get blown up in the 1996 film Independence Day.
■ Famous for its appearance in 1982’s Blade Runner, L.A.’s romanesque revival Bradbury Building sold its air rights for $1M to developers who wanted to build a skyscraper nearby.
■ Donald Trump snapped up the air rights to at least seven buildings in order to have his 72-story Trump World Tower, completed in 2001, stand as a monolith above United Nations Plaza. Buyers have been willing to pay $25M or more for an upper-level condo.
■ Two Manhattan properties—the United Methodist Christ Church and the Grolier Club on Park Avenue—were set to share $37M (or $430 per square foot) for their air rights, next to a proposed 35-story apartment building, but the deal fell through in 2005.
■ The same United Methodist Christ Church on Park Avenue and 60th Street will earn a reported $40M for its air rights—at a record selling price of $600 per foot—as developers are looking to build a 51-story apartment tower, which would set a new record as the tallest residential building in New York.
■ The investment firm that owns Manhattan’s Grand Central Terminal is, controversially, looking to get $500 per square foot for its property’s air rights—twice the amount that the city has deemed reasonable. With over a million square feet available, that’s serious money for empty sky.