Physical Vectors For Decentralized Growth

Air Rights & Low-Altitude Flight Is A Matter Of Law And Physics

Air rights are one of the most valuable and underutilized assets real estate owners have. Using their physical infrastructure to permit low-altitude flight and fluid development brings incredible outcomes.

I previously wrote about the benefits of air rights in real estate development. The link is here: Hedge Funds And The Beatification Of Air Rights. The story has another chapter as more air rights are traded.

Further Developments

Ken Griffin of Citadel is in partnership with Rudin Management and Vornado Realty Trust. Together they have a contract to purchase more air rights, up to 250,000 square feet. The air rights are those owned by St Bartholomew’s church.

(lovenewyork)

St Bartholomew’s Church (St. Barts) was founded in the 1830’s in Manhattan's Bowery St. Initially, it was located on Great Jones Street and then on Madison Avenue and 44th Street. In 1918, structural issues drove a move to a new Park Avenue location, the current home of St. Bart's.

In 2016 it achieved National Historic Landmark status but maintaining old buildings costs money so the church looked to the heavens. The answer was divine, sell the air rights and transfer them to someone who can use them.

Underutilised assets are a waste for everyone involved and a net loss to society. Underutilized air rights can fuel a mismatch between potential value for a plot and realised gains.

Griffin, Rudin Management and Vornado Realty Trust have a contract to purchase the air rights from St. Bartholomew’s Church for $78 million or $312 per square foot. The current per-square-foot value of the land in the area is estimated at ~$2,000 per square foot. The contract is from 2024 but was only made public through court filing in the Manhattan Supreme Court.

The Collection Plate

The deal they have agreed is an option that expires in 2027. The contract costs $2 million and they need to pay $2 million this year and next, and another $4 million before the deal can close in 2026.

The reason the group of developers want the air rights is to transfer and use to increase the size of their building at 350 Park Avenue. They are planning a tower of 51 stories and over 1.5 million square feet.

What Is My Flying Car?

Flying cars and drones need access to low-altitude private airspace at scale. We have Electrical Vertical Take Off and Landing (eVTOL) vehicles being developed by several key players. Joby, Lilium, Volocopter, and Archer to name a few. According to McKinsey over $20 billion has been invested in this category, the real number is