Air Rights Market Value?
A developer next door to me wants to buy about 500 sq. ft. of an available 2000 or so sq. ft. of air rights from me to build an extra room on top of the fourth floor. Home is currently only two levels. What is the market value to these air rights? I am in…
A developer next door to me wants to buy about 500 sq. ft. of an available 2000 or so sq. ft. of air rights from me to build an extra room on top of the fourth floor. Home is currently only two levels. What is the market value to these air rights? I am in North Crown Heights.
don’t forget you are devaluing your property if sell air rights. Future buyer will be limited.
Keep that in mind.
David’s rule of thumb might apply when considering purchasing an empty lot. However your developer is already all-in. He has the boots on the ground, the building designed, his basis and return calculated – your air rights SF is the gravy. It looks like condos are going for $400-$700 / SF in the area depending on where you are but keep in mind your 500SF will be the penthouse or in other words the most expensive in the building. It is purely a question of profit at this point for him – how much is he willing to pay you to get his return of $350k? Construction can’t be more than $100-$150 / SF when the building is already underway.
Here’s a rule of thumb: Take the fair market value of the space he will have created (in $/sf) and multiply it x the actual square footage he purchases (500). Deduct approximately $125-$175/sf for hard & soft costs that he has to pay in order to creat the space. Maket sure he makes the first offer and negotiate up from there towards your number. Someone here will likely make the claim that hard and soft costs are higher, but adding 500 sf to the top of a house isn’t nearly expensive as it may seem.
Good luck.
rule of thumb – approx 50% of land value, per buildable sq ft.
example – land is trading for $100 per buildable sq ft, then air rights are valued at approx $50 per buildable sq ft.
I do not know what North Crown Heights land trades at.
This property just sold near you for $59 per buildable foot:
http://bstoner.wpengine.com/brownstoner/archives/2011/05/3344_putnam_to.php
And I know another place around there on the market for $75 per buildable foot. Look for empty lots around you for sale – their brokers will generally list how much they cost per buildable foot. Take the number you find and double it since the quantity is so low. If they want it, they’ll buy it. Sounds like a lot of paperwork to me though, combining zoning lots and all.
You could also find out what the developer paid for the property next door, figure out the buildable feet and go from there. Google ACRIS to look up the address.
What Slick said.
Get him to buy your house at above market. Then buy a new house.
zoning allowance ?