- JPMorgan Chase has announced plans to build a new headquarters on the site of its current New York City office building, according to Reuters.
- While still subject to city approval, JPMorgan will demolish its existing 52-story high-rise in 2019 and replace it with a 2.5-million-square-foot tower. The 70-story skyscraper will take up to five years to build, and, during construction, JPMorgan will move its operations to other Manhattan buildings it either leases or owns. While JPMorgan did not release cost estimates for the project, the nearby One Vanderbilt office tower, which is currently under construction, has a price tag in excess of $3 billion.
- This will be the first major project built under a new rezoning law meant to rejuvenate midtown Manhattan by allowing builders to buy development rights from public properties so that they can build taller structures. The proceeds from the sale of those rights will fund transportation and infrastructure improvements.
The rezoning around Grand Central Station in New York City almost put SL Green, the developer for One Vanderbilt, into a legal battle that could have delayed progress on the project for years. SL Green and Midtown TDR Ventures, the owner of Grand Central Station, were in negotiations for air rights when the city rezoned the area. This cut Midtown TDR out of a deal that could have provided the company $880 per square foot for more than 1 million square feet of air rights. Midtown sued SL Green, but the two companies settled, paving the way for construction to begin.
Air rights play a major role in Manhattan construction because of how dense development is in the city. When a company purchases air rights, it is buying the right to build in the space above properties it doesn’t own.
For the Hudson Yards development, Tishman Speyer spent a total of $265 million acquiring more than 1 million square feet of air rights. The final piece fell into place in October when the company bought nearly 670,000 square feet of air rights for $157 million from the Metropolitan Transportation Authority.
Air rights are not limited to New York City. In July, Massachusetts Department of Transportation signed a $21 million, 99-year lease with Fenway Center developers, which are planning a $600 million mixed-use project that will be built partially over a portion of the Massachusetts Turnpike.