Historic Midtown Buildings Prepare To Sell Air Rights: Report

MIDTOWN MANHATTAN, NY — Owners of historic and landmarked buildings in East Midtown are getting ready to cash in on the city's rezoning of the neighborhood.

The owners of Grand Central Terminal's development rights and the Archdiocese of New York have both taken steps toward selling off their air rights to businesses and developers looking to construct new office towers in East Midtown, Crain's New York Business first reported.

A partnership of investment firms MSD Capital and Argent Ventures and New York-based landlords TF Cornerstone are currently in negotiations to 700,000 square feet of Grand Central's air rights to JPMorgan Chase in order for the bank to build its new headquarters at 270 Park Avenue, Crain's reported. The historic train terminal has a total of about 1.35 million square feet of air rights, Crain's reported.

In a separate deal, the Archdiocese of New York is in talks to transfer about 30,000 square feet of air rights that would be used to renovate another existing East Midtown building, Crain's reported. The church has about 1.2 million square feet of total air rights it could sell.

JPMorgan Chase announced plans to build a new 2.5 million-square-foot headquarters in Midtown Manhattan last week. The East Midtown rezoning allows JPMorgan Chase to buy up the air rights from nearby sites and use them to build a massive tower capable of housing 15,000 employees.

The city rezoning stipulates that in exchanges of air rights, the sellers must pay the city $61.49 per square foot in order to fund improvements to East Midtown's public spaces, transit and infrastructure. City officials predict the rezoning plan will generate 6.8 million square feet in new commercial office space over the next 20 years and that an additional 6.6 million square feet of existing office space will be upgraded into Class A office space.

The East Midtown rezoning area spans 78 blocks from the east side of Third Avenue to west side of Madison Avenue between East 39th to 57th streets.

Read the full Crain's article here.

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