Air Rights Appraisal

[Deleted member 126639]

A colleague has asked me to ask if anyone has a formula for appraising Air Rights. This will be only the 3rd type of ownership in our city. No comps here. Any help appreciated.

You have to survey developers and investors.

Even in New York City, many if not most sales are between one potential buyer and one potential seller - a bilateral monopoly.

 

[Deleted member 126639]

My experience with air rights is limited to NYC where they are common. So common that there is sufficient market data to use sales comparison to value them. Residual techniques are not typically required.

That said, I have to question your point. On virtually all of the air rights sales I've examined, the selling property generally cannot use them at all. Therefore the "lost development potential" is nil. But that doesn't mean there's no value there. The value to the receiving site is clear and can be calculated.

If you have one buyer and one seller, how can the value be clear?

 

[PL1957]

If you have one buyer and one seller, how can the value be clear?

Use a residual technique ... How much additional FAR can be built with the purchased air rights?