Cost of Buying Air Rights
How do you determine the value of air rights? Can anyone who has had experience buying or selling air rights in Brooklyn share their experience and/or provide an idea of what the price was per square foot? Thanks Brownstoners.
How do you determine the value of air rights?
Can anyone who has had experience buying or selling air rights in Brooklyn share their experience and/or provide an idea of what the price was per square foot?
Thanks Brownstoners.
Thanks for the helpful input.
I suppose, based on the information I have, the estimated cost of air rights in Brooklyn is anywhere from $50 to $150 per square foot.
Price seems kind of steep. How much do you need to buy? In Manhattan, I’m sure the price is pretty high. In Brooklyn, it shouldn’t be so bad.
http://www.therealdeal.net/issues/NOVEMBER_2005/1130901424.php
http://www.nytimes.com/2006/03/05/realestate/05air.html?ex=1184904000&en=82f6370db9862f63&ei=5070
Oh, by the way, the cost of Brooklyn “real land” is in the region of $200/SF per buildable SF in our neighborhood so your air rights are probably worth between $120/SF and $160/SF to the developer. Whether you can get that out of him is all a matter of negotiation.
In terms of the value per square foot for air rights, I think the rule of thumb is between 60% and 80% of the price a developer would be willing to pay for each buildable square foot of “real” land. I guess the discount takes care of the extra legal steps involved in merging a bunch of small-area zoning lots.
In terms of how many square feet the developer will pay for, it depends how sophisticated the developer is. The less sophisticated developer may make an offer based on the entire unused FAR footage on your lot. The cannier developer will probably work out whether there are other factors (e.g. open space requirements, height limitations, the practicalities of feasible residential footprints) that limit his ability to use the entirety of your spare FAR footage. Zoning is such a byzantine process that you best bet would be to hire an attorney with experience in this field. If he’s good he should be able to calculate, in the same way as the developer, the additional SF that can be built with your air rights and will have a history of how much has been paid per SF that he can bring into play in the negotiations.
You can back out an estimate of the value by taking the value of the finished space in $/square ft. and subtracting the cost to build it in $/square ft.: this will give you an estimate of the gross profit thanks to the builder acquiring an incremental square foot. Then you can figure out what fraction of that profit belongs in your pocket. Don’t forget that the builder carries a lot of other costs and risk.
same way as anything else: they are worth whatever someone will pay for them. I got offered $50/square foot at my place in Park Slope. I didn’t take it (he wanted 1,000 sqft, and I didn’t have it). My real estate friend says I should have asked for $200.
Do you have an offer? How badly does the buyer want it and how much do you have to sell? More importantly, how much do you WANT to sell? Remember, once you sell, its gone, and you’ll have to explain that to anyone who buys your place.