Highcap Group has closed on on the sale of hard-to-find High Line air rights at $800 psf.
Managing principal Josh Goldflam and senior director and Michael Ferrara represented both the seller, a local partnership, and the buyer, developer Six Sigma, which paid $3.92 million for 4,900 s/f of what is termed High Line Transfer Corridor (HLTC) Air Rights from 509-511 West 27th Street.
Last December, Six Sigma paid $54.75 million for a development site at 517-523 West 29th Street. The firm, run by Jason Lee, plans to demolish the six-story Tuck-It-Away Self-Storage warehouse that occupies the space to build a luxury condo.
509-511 West 27th Street lies withint the Special West Chelsea District. Designated in 2005, this is the area bounded by Tenth and Eleventh Avenues from West 30th Street south to West 16th Street.
Regulations restrict development of properties immediately west and within 100 ft. of the High Line from West 19th Street to West 30th Street, known as the High Line Transfer Corridor (HLTC).
Landlords who own property located only in the HLTC are allowed to sell their unused air rights to other properties only located in the Special West Chelsea District.
The HLTC has a finite amount of buildings to begin with and since 2005, the majority of the HLTC air rights in West Chelsea have already been sold making HLTC Air Rights very hard to come by and this transaction very rare.
Ferrara said: “On the surface $800 per buildable square foot may sound like a high price per square foot, but essentially this buildable square footage is going to be added to the “top” of the developer’s condominium project. Top floors or penthouses command the highest prices per square foot and I feel confident the developer will have no problem selling them for four times what he paid for them.”
Goldflam added: “At the time we originally signed the contract for these air rights, many people thought $800 per square foot for air only was completely ridiculous. But due to the scarcity of these specific development rights, I would say that many developing around the High Line today would likely pay a higher price per square foot even though the market for development sites has come down, as these air rights are nearly impossible to find these days.”
Six Sigma NYC is a boutique design and build firm that develops, designs and builds ultra-luxury condos. Current projects include 449 Washington Street, 56 Walker Street and 435 West 19th Street. The firm declined to comment on the transaction.