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Originally Posted by hunser
Hmm I don't know but maybe Silverstein should also consider leasing space in 3WTC at cost. After all, this is the WTC we are talking about here.
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The problem is that both Silverstein and the Port Authority know that Silverstein can and likely will get the better rents. People have to understand that when the original WTC was built, it was years before it really started to fill up. Downtown can't just absorb 10 msf of new office space overnight. Midtown can't even do that. Remove the WTC, and look at how many new office towers have been built Downtown in the two decades. Relatively few. Add to that, New York was hit hard by the financial crisis, so things were set back even further. Goldman Sachs managed to get a new tower up, but not without incentives from the City and State.
But the state doesn't want to repeat what happened when the original complex was built, and flood the lower Manhattan market with subsidized office space. So Silverstein not only needs to lease some of the space in tower 3, he also needs to do it at a minimum...
http://observer.com/2012/01/silverst...-trade-center/
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As is stated in the 2010 agreement during a special board meeting held on August 26, 2010, immediate construction of the building’s podium and office tower can't follow unless the developer can “pre-lease 400,000 square feet of the office tower at a minimum average rent of at least $60 per rentable square foot for the first five years of the term,” according to the agreement.
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Meanwhile...
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Jones Day, for instance, is said to be negotiating a lease in the $50s per square foot at Brookfield Place. And Time Warner would get an even cheaper rent at Hudson Yards, where that site's developer, the Related Cos., has pledged to give early tenants their space at cost in order to get construction going there.
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Related is looking to make its money on the residential end of that development.
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Originally Posted by Onn
Boy, can't even count on the lawyers anymore to get it done. What is this world coming to. 
I feel bad for Silverstein, there probably isn't a whole lot he can do to boost his prospects for building purely speculative office buildings. Hudson Yards is going to snatch the biggest potential candidates away from him. |
I believe law firms as a group are the second largest users of office space in Manhattan. But those firms can be anywhere, like the new 11 Times Square or 250 West 55th street. Of the big boys, you have 15 Penn put on ice indefinitely, and Related is close to signing the large tenant it needs to get its largest tower built in the Hudson Yards. The other towers up next in the Hudson Yards (1 Hudson Yards, 3 Hudson Blvd) while large, don't have the amount of space towers 2 and 3 will have. The major competitor would be Manhattan West, and Brookfield has said it needs higher rents to justify building that platform. I doubt they would give cheaper rents than the WTC.
So overall, it's just a waiting game. And if anyone should know about the real estate industry in New York, its Larry Silverstein. He's no newbie at this. Because this tower is already rising, he may not have as much time as he would like, but the natural order of things dictates it.