[NYguy]

Originally Posted by uaarkson

Wait, was the meeting today? Or next Tuesday?

Apparently the meeting was yesterday...

http://www.crainsnewyork.com/article.../INS/100229953

World Trade Center rent dispute

As World Trade Center developer Larry Silverstein and the Port Authority were meeting yesterday about the two office towers Silverstein wants to build with Port financing, space in Silverstein's 7 World Trade was being offered for $60 per square foot.

Yet the developer predicts that the new towers would fetch gross rents of nearly $100 per square foot—if only he could build them. (The “effective rent” at the existing and new buildings, taking in to account available incentives, would be lower by about 10%.) Port Authority officials, who are willing to finance one but not two of Silverstein's speculative towers, do not share his view that downtown office rents will rise so precipitously in the next five years or so.

The cost of Class A office space in lower Manhattan rose by about 1% annually from 1984 to 2010. Measured from the bottom of the market in 1994 to the top of the market in 2008, just before Bear Stearns and Lehman failed, average annual rent growth was 5.6%. Rents would have to grow at several times that rate to reach the numbers Silverstein projects, which is one reason why private financing for the towers has not been available.

However, the buildings could break even or make money at lower rents, if construction costs can be controlled. The Port Authority would be at risk of losing money only if rents are in the low $60s when the second tower goes to market in 2015, an insider says. In the past 15 months, deals were cut at 7 World Trade and at the Freedom Tower for $80 per square foot, and rents can rise quickly in a market upswing.