Nederlander Sells Neil Simon Air Rights to Dream Hotel Project

Nederlander will soon be funneling a new hunk of real estate profit (we hope) into the arts in New York City.

The organization just sold nearly 20,000 square feet of air above its Neil Simon Theatre for $8.9 million (that's $450 per square foot) to a group working on a Dream Hotel project.

Deadline writes that a zoning law loophole lets developers transfer rights from one location to another -- in this case, 10 blocks from the Neil Simon to the mixed-use building in question, located at 560 Seventh Avenue, between 40th and 41st streets.

Soho Properties, MHP Real Estate Services and Hampshire Hotels Group will now "bring the planned 238-key, $300-million hotel to 29 stories almost 400 feet high." Demolition for the Dream Hotel is slated to launch in the next few months at the former home of PROEJCT RUNWAY and the current residence of an Orthodox Jewish congregation.

Nederlander's sale is the latest in Theater District air rights deals, after the Shubert Organization sold a package of both air and property rights that allow Extell Development's planned tower to go up at 740 Eighth Avenue.

The Shubert Organization, which owns almost half of Broadway's theaters, also recently purchased a five-story warehouse on Manhattan's West Side for $11.25 million. The building has 24,000 actual square feet on the ground with 1,105 square feet of air rights, which could earn Shubert $400 or more per square foot paid by eager builders wanting to add floors to skyscrapers in the neighborhood.

Shubert has been busy, indeed. The new '60s dance musical TRIP OF LOVE is set to open this fall at Shubert's newly renamed Stage 42, off-Broadway's 499-seat Little Shubert Theatre, located at 442 West 42nd Street, on Theatre Row.