Air Rights

Yes, generally the future price/value of the property will be less, because you have sold off part of it (the air rights) now.

Justbringit242, I think the question is whether the value of your relative's building including air rights is greater or less than the combined value of the building and air rights separately. It is often the case that the value of air rights to a developer is much higher. It is also often the case that the value of the property without air rights is essentially the same as before losing the air rights. It depends on what the owner could do with those rights such as adding extra floors, adding extensions, tearing down the existing building and constructing a new one. So it's a complicated analysis requiring much more information than you have presented.

In my experience, these negotiations often greatly favor the developer as they may be the only reasonable buyer/receiver of the air rights and if they build without them, your relative's air rights may become essentially worthless.

Depends on what you are getting paid for the air rights. At $700 per sq ft, it may be very good deal for the seller but at $300 per sq ft, depends on whether you can add more value by using the air rights to build on your building.

Depends on what you are getting paid for the air rights. At $700 per sq ft, it may be very good deal for the seller but at $300 per sq ft, depends on whether you can add more value by using the air rights to build on your building.

300, you are correct of course but mostly in theory IMO. Adding to an existing building is complicated and often not economical. Also, in my experience, air rights almost always trade at a severe discount to land values due mostly to the imbalance in negotiating strength between buyer and seller.

I think it very much depends on how you are going to end up selling the building when the time comes. If you are going to end up selling it as a single family, two or three family home to someone who is going to live there, I think it probably makes very little difference. However you give up the "bonus" windfall of selling to a developer who will pay way over "market".

In order to sell air rights to a developer there obviously needs to be a receiving site for these rights to transfer to. Typically, developers have air rights owners over the barrel because the developer is likely the only possible buyer. And if you pass on the opportunity to sell and the building gets built without your air rights, you will never get another chance to sell.

Of course, if you think your property could be part of an actual development site, say a small walk-up building on an avenue that would be torn down, you could certainly make a great investment.

Does anyone remember in the 1980's all of those tiny "orphan" sites, often landlocked, 5 or 10 sf in size, that sold to speculators for next to nothing in the hope of selling to a developer years down the road? I wonder what happened to any of these tiny parcels.

I remember when the circular Macy's building in Queens ended up getting built with a notch in it because of one holdout.
https://placesnomore.wordpress.com/2012/08/05/sendeksandmacys/

I remember Macy's in Queens as well. There was a house there. Lots and lots of other holdout examples like the church at Citigroup Tower, PJ Clarkes on Third Avenue.

...so was the case with the flagship Macy's in herald square (https://ephemeralnewyork.wordpress.com/2011/03/03/the-tiny-holdout-building-in-the-middle-of-macys/)
To the original question: find out what the neighbor would want to do with the air rights? Are they adding 4000 square footage (theirs + yours) or are they planning to sell their house + 4000 sq ft of air rights to a developer? IMO, if you know your building has low potential to be sold later to a developer even with air rights, getting $300/ft is incredible, considering the average last year was something like $290/ft. If you later want to use the air rights to build up, don't forget costs of doing so, which could be very substantial.

Tribby, At $300 it depends. If you can build up by spending 500 per sq ft and have a $1000 per sq ft space, it will depend on your cost of time and expertise in doing something like this.

If you can show a developer that you have the ability to use your air rights for yourself, you have more leverage.

Theoretically, air rights should be more valuable than the land itself as they allow a developer to add higher floors which are more valuable than lower floors.

If the developer walks away who knows when someone else will be interested. It all depends on whether one is inclined to roll the dice or take some off the table. If only I could predict the future

If the developer walks away who knows when someone else will be interested. It all depends on whether one is inclined to roll the dice or take some off the table. If only I could predict the future

If the developer walks away who knows when someone else will be interested. It all depends on whether one is inclined to roll the dice or take some off the table. If only I could predict the future

If the developer walks away who knows when someone else will be interested. It all depends on whether one is inclined to roll the dice or take some off the table. If only I could predict the future

If the developer walks away who knows when someone else will be interested. It all depends on whether one is inclined to roll the dice or take some off the table. If only I could predict the future

If the developer walks away who knows when someone else will be interested. It all depends on whether one is inclined to roll the dice or take some off the table. If only I could predict the future

If the developer walks away who knows when someone else will be interested. It all depends on whether one is inclined to roll the dice or take some off the table. If only I could predict the future

If the developer walks away who knows when someone else will be interested. It all depends on whether one is inclined to roll the dice or take some off the table. If only I could predict the future

Very true but in this case, you can either build yourself or sell it to someone who can build. It is not like a coop airtight where it will be virtually impossible to build up.

https://therealdeal.com/2018/02/27/city-planning-to-vote-on-higher-west-chelsea-air-rights-price/