In the dynamic narrative of urban development, it should not surprise us that some of the most powerful forces on the planet like hedge funds, real estate, religion and human ingenuity are pointing us to a seismic change in how we can live our lives.
Air Rights - Skyline Transformation
St. Patrick's Cathedral in New York plays a crucial role, particularly in the strategic use of its air rights and how to follow the smart money. The Cathedral owners are positioning themselves to sell air rights, allowing for a new high-rise building in the Midtown East rezoning district.
The Roman Catholic Archdiocese of New York plans to sell air rights to improve spaces around the church property. A "restoration and maintenance plan" was presented to the Landmarks Preservation Commission (LPC). New guidelines allow air development rights to be transferred anywhere within the larger Midtown East rezoning district, providing more flexibility for owners of landmark properties and air rights holders to cash in. Air rights without development permissions attached, can also be transferred, and without blessings.
Recent Past
In 2017 The Archdiocese of New York identified a potential buyer interested in acquiring a portion of air rights from St. Patrick's Cathedral, a transaction that was anticipated to yield a minimum of $7.2 million or ~$61 per square foot.
A key aspect of the rezoning permits landmarked buildings in the designated area to sell their air rights. St. Patrick's Cathedral was confined to selling air development rights solely for us by adjacent projects. The rezoning broadened this scope, enabling the Cathedral to engage with any new developments within the expanded 78 block area.
Hedge Fund
A recent development involving Citadels CEO Ken Griffin is paying the Archdiocese of New York up to $164 million for St. Patrick's air development rights.
Each square foot costs $312.50. An increase of 510% in 7 Years for what some deem thin air, and other’s valuable assets.
Griffin's vision includes a 1.7 million-square-foot skyscraper with Citadel occupying about half of the space. Griffin's push for office expansion aligns with his belief that remote work weakens corporate culture, and real estate is a good bet so long as it’s
useful. This now marks the first sale of St. Patrick Cathedral's air rights since the 2017 rezoning. This deal shows the demand for air rights and demonstrates what’s possible for other air rights holders.
Who's Involved
Citadel
Citadel LLC is one of the most prominent and successful American multinational hedge funds and financial services entities. It was established in 1990 by Ken Griffin and has over $65 billion in assets under management.
Vornado Realty Trust
Vornado Realty Trust (Vornado) is a Real Estate Investment Trust (REIT) boasting a market cap of around £5 billion. Specializing in office, retail, residential, and hotel properties, Vornado also offers management consulting and business services. The company plays in sectors including government, legal services, education, health services, technology, and more.
Rudin Management
The Rudin family operates one of New York City’s major privately-owned real estate firms. Established in 1925 and run by the third and fourth generations of the family. Rudin Management Company manages 32 NYC properties. This encompasses 17 residential buildings spanning 4.7 million square feet and 15 commercial office buildings spanning 10.1 million square feet.
St Patricks Catherderal
St. Patrick's Cathedral is the Mother Church of the Archdiocese of New York and the seat of its Archbishop. Built by ‘contributions’ large and small. The Archdiocese of New York is composed of 10 counties: Putnam, Bronx, Dutchess, Orange, Manhattan, Sullivan, Westchester, Ulster, Staten Island, and Rockland. Trinity Church as a comparable, not St Patricks Cathedral has a portfolio worth $6 billion. The church is a developer, with a real estate arm that “controls ground leases and office space rentals in the buildings it owns.” How much the archdiocese is worth is somewhat opaque.
What all of these groups, who are trying to trade air rights have in common is the ability to draw in very large amounts of money and compound it.
Property, Air Rights and Transportation
The cross-over with real estate, air rights and transportation is clear. Not only are air rights required so we can build (if development is permitted), but they are also required to allow drones and flying cars in low altitudes. Low-altitudes that are controlled by a group of largely decentralized individuals.
Vertiports, which are modern heliports are needed in useful and strategic locations for air taxis. This is on top of buildings, backyards, parks, and other open areas. They are required to be built where we need them, not where the authorities think we want them or lobbying has pushed them. Air rights enable this infrastructure to develop.
In Property We Trust
Property owners control the new era of low-altitude airspace use. We can expand our transportation systems and increase the capital values of property by positively using air rights. This is not only to the benefit of the largest property developers but also the smaller property owners who can increase their income from their air rights by permitting the airspace to be used.
No longer does the market need to be hidden, the largest owners of air rights are individual property owners who need a pick to mine their gold.
Thank you for reading and I hope you have enjoyed the 2023 newsletters. I started it to inform people of the possibilities of low-altitude transportation and how the use of air rights can have a positive impact on our lives and society.
I also started it as a window into what we are building at SkyTrade, which is a marketplace for low-altitude air rights, and using them to open up our skies. We went, without promotion, from 0 to ~13k subscribers, which I feel shows the level of interest people have in what I’m writing about. I have been introduced to some amazing people in various industries from venture capital to aviation, policymakers, regulators and legal experts. All of them have had a slightly different take on the category which is incredibly helpful.
Some highlights for me included engaging with an amazing group of builders at Zuzalu. My excellent chat with Bradley Tusk on his podcast. A grant from Tyler Cowen to visit Próspera, conversations with many other Emergent Ventures winners, and the support of the Solana Foundation, who see the future, which is where we are building. And of course, the support of my family, friends, Co-founder and investors as we look to change the face of transportation, decentralized property infrastructure, and answer the question:
Where is my flying car?
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