Dive Brief:
- New York City developer Tishman Speyer bought $78 million in development rights (aka air rights) from the state and city earlier this year so that it could increase the size of The Spiral tower in Hudson Yards, according to Crain's New York Business.
- The city and state own joint development rights in the eastern rail yards section of the 26-acre Hudson Yards project on the west side of Manhattan, and the two have sold an estimated 1 million square feet of rights — out of almost 5 million total square feet — for $190 million.
- This most recent air-rights purchase, combined with a separate $30 million air-rights transaction in 2015, made it possible for Tishman Speyer to add 350,000 square feet to the 65-story skyscraper.
Dive Insight:
In addition to $108 million in air rights, Tishman Speyer has spent $438 million on land for The Spiral and $25 million buying out two tenants in an existing apartment building on the site. Project developer Related Cos. also purchased $18 million for 60,000 square feet of air rights from the Metropolitan Transportation Authority (MTA) to increase the size of the $2 billion 35 Hudson Yards, the fifth building in the Hudson Yards project.
Hudson Yards is projected to create an almost $19 billion economic boon for New York City by the time the development is complete, and, according to the Real Deal, the MTA will take in $1.78 billion in lease payments and air rights for the project, plus $89 million each year after it is complete.
Tishman Speyer submitted its final plans for the Bjarke Ingels Group-designed tower to the New York Department of Buildings in September. The near-3-million-square-foot skyscraper's defining design element is a winding series of landscaped balconies that start on the seventh floor and coil around the building to the top.
Air rights are big money in New York City, and just this year they had the potential to sideline the $3-billion One Vanderbilt Tower near Grand Central Station. Midtown TDR Ventures, the owner of Grand Central, said it purchased the landmark in 2006 in order to benefit from its air rights, estimated to be $880 per square foot. The company and One Vanderbilt developer SL Green were in negotiations for those air rights when the city rezoned the area, making it unnecessary for SL Green to strike a deal with Midtown before finalizing its plans. Midtown filed suit, but SL Green settled for an undisclosed amount.