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$430 a Square Foot, for Air? Only in New York Real Estate


November 30, 2005

The price of air has gone up in Manhattan.

It's now $430 a square foot.

Two New York City developers have agreed to pay a record-setting amount for "air rights" so they can build a 35-story apartment tower with views of Central Park from the high floors.

The brothers William L. and Arthur W. Zeckendorf are set to pay $430 per square foot - more than twice the going rate - for unused air rights over Christ Church and the Grolier Club at Park Avenue and East 60th Street. Christ Church will collect more than $30 million; Grolier will get about $7 million.

Air rights allow developers to build taller by buying the space over low-scale buildings and transferring it (on paper, if not in reality) to spaces over adjacent buildings. Although such transfers occur elsewhere in the country, the prices do not run as high as they do in Manhattan, which, after all, is an island and generally provides developers with one option: up.

The rights will be transferred to a site west of the Grolier Club on East 60th Street, where the Zeckendorfs and their partners own three tenements that are to be demolished.

If it all goes as planned, the developers will be able to build a taller tower than the zoning ordinarily allows. In a separate deal with Christ Church, the tower will also have a coveted Park Avenue address, despite its location on 60th Street.

The Zeckendorfs are third-generation developers. The brothers disagree with experts who warn about a bursting housing bubble, at least when it comes to what the Zeckendorfs call "super prime" areas.

"We want to concentrate on the very high-end market where we see tremendous strength and a limited inventory," Arthur Zeckendorf said.

M. Myers Mermel, a real estate broker and a trustee of Christ Church who helped negotiate the deal, said the money would help sustain the Methodist church's programs. Carolyn L. Smith, president of the Grolier Club, a storied society of bibliophiles, confirmed that her club voted on Monday night to approve the deal.

Previously, New York appraisers say that the high end for the price of air hovered around $200 a square foot.

"Nothing shocks me anymore," said Daniel F. Sciannameo, an appraiser at the Albert Valuation Group. "This market is absolutely crazy."

Copyright 2005 The New York Times Company

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