Real Estate: The Big Air Grab

With vacant lots all but gone in the downtown areas of many big cities, more and more land-starved developers are literally buying up thin air. The technique is to acquire the right to use the open space over such low-slung installations as roadways, railroad yards and schools, and to fill that space with new buildings. In fact, many of the most dramatic real estate deals in recent years have involved not parcels of land but the so-called "air rights" above them.

The result is a wave of construction projects resembling so many concrete-and-steel layer cakes. Manhattan's new Madison Square...