Gary Barnett's Extell Development has struck a deal to purchase 87,000 square feet of air rights from the Church of St. Mary the Virgin for approximately $24 million. The transaction targets the developer's 570 Fifth Avenue office tower project, a major commercial expansion in Manhattan's prime Midtown corridor.
The air rights originate from the Church of St. Mary the Virgin, a landmarked Episcopal church located at 145 West 46th Street in Times Square. A purchase and sale agreement is set for December 2025, though the deal has not yet closed. Air rights transfers allow developers to add square footage to their buildings by purchasing unused development capacity from adjacent or nearby properties, particularly those with historic designation or zoning restrictions that prevent their own expansion.
The 570 Fifth Avenue site sits on one of Manhattan's most expensive blocks. Extell's acquisition of air rights removes a potential obstacle to the tower's full build-out. For office properties in Midtown, every additional square foot carries commercial rent multipliers worth millions in future revenue. At $24 million for 87,000 square feet, Extell pays roughly $276 per air-rights square foot, a standard market rate for premium Manhattan locations where development density commands premium prices.
This deal provides the Church of St. Mary the Virgin with a substantial capital infusion while preserving the landmark building itself. The church retains ownership of its property and physical footprint. Air rights transactions have become common vehicles for religious institutions, nonprofits, and owners of historic structures to monetize their development potential without altering their buildings.
For the office market, Extell's expansion signals continued investment in Midtown despite headwinds facing the sector. Vacancy rates in Midtown Manhattan remain elevated as remote work reshapes office demand. However, trophy properties and new construction command higher rents and attract tenants seeking modern amenities and efficient layouts. Extell's 570 Fifth Avenue project aims to capture premium office tenants willing to pay for location and building quality.
The developer brings significant capital and operational experience to the project. Extell has completed major residential projects across Manhattan, including the Central Park Tower supertall residential tower and the Plaza Hotel conversion. Barnett's track record demonstrates ability to navigate complex zoning, landmark preservation, and community approval processes required for large Midtown developments.
The December 2025 closing timeline suggests Extell has completed or is completing due diligence and environmental reviews. Regulatory approvals and architectural plans likely advance in parallel with the air rights closing. Once closed, Extell gains the legal right to add the 87,000 square feet to its base zoning allowance for the 570 Fifth Avenue site.
For office tenants, the expanded building delivers more available space and potentially competitive pricing as new supply enters a market with softer demand. Landlords in the immediate area face increased competition from new construction offering modern systems and layouts. The transaction reflects Manhattan's selective recovery, where prime locations and new buildings attract capital and tenants while secondary office stock struggles.
The 2025 closing date provides certainty for Extell's project timeline while giving the church six months to finalize its capital deployment strategy from the $24 million proceeds.