Holliday Fenoglio Fowler, L.P. (HFF) is marketing 100,000 square feet of inclusionary air rights for sale after HFF recently placed approximately 30,000 square feet of inclusionary air rights under contract for a residential development in Lower Manhattan on behalf of Carmel Partners (Carmel). This is the second contract put in place for the marketing of its Community Board 1 (CB1) inclusionary air rights, which are part of the larger 180,000 square feet that Carmel earned from its 112-118 Fulton Street high-rise residential development. There are now 80,000 total square feet under contract.
The air rights are for future residential development within CB1, covering most of the southernmost part of Lower Manhattan below Canal Street. CB1 is one of New York’s 59 community boards and includes Tribeca, the Financial District, Battery Park City and the Seaport/Civic Center.
"Inclusionary air rights are transferable, buildable square footage awarded to incentivize affordable housing development in New York City, which developers would otherwise not have," said HFF Managing Director Rob Hinkley. "These bonuses allow developers to lower their overall cost basis and build additional floors at the top of a building where the most valuable real estate can be sold or rented. They can be transferred within a community board or within a half-mile radius of the lower-income housing created. In the current state of the market, given land values and rising construction cost, these are highly sought after by investors."
“These coveted air rights have received considerable interest from various real estate developers, owners and investors, and we were pleased to put a substantial portion of them under hard contract recently,” Hinckley added. “A receiver site of these air rights has the potential to both lower the overall project basis and add in coveted premium rentable or sellable space in an underutilized site.”