The News: New York’s Economic Slowdown Impacts World Trade Center Site
- Mar 31, 2009
Downtown New York received some positive news last week, as Vantone Industrial Co. signed a lease for 190,800 square feet at One World Trade Center, formerly known as Freedom Tower. The space will be home to China Center, a business and cultural center. But that sliver of good news may mask some deeper problems at the World Trade Center site, which has seen more than its share of delay and acrimony.The Wall Street Journal reported in its March 21-22 edition that developer Larry Silverstein has asked the Port Authority of New York and New Jersey for financial help on at least two of the three towers he is building on the site. The report said that the agency is considering offering the developer financial help on one of the towers, and in return would require that the developer pay some of the profits from the towers in the long term. The Port Authority owns One World Trade Center. Timing has now become an issue, as the New York City office market is softening. Vacancy downtown has increased sharply in the past year, from 7.6 percent in February 2008 to 10.1 percent in February 2009. Average asking rents have also fallen, from $48.91 per square foot in February 2008 to $43.64 per square foot in February of this year, according to a market report from CB Richard Ellis Inc.“What those buildings need are either tenants or help from the Port Authority,” said Eric Michael Anton, executive managing director of Eastern Consolidated. “The economy is now the problem. Two years ago, they wouldn’t have had this problem.” Taking the long view, however, Anton said the buildings will attract tenants. Downtown New York has become more attractive to many office tenants during the past decade because of the increased number of residential, retail and cultural options.“I hope and pray the buildings get built,” said Daniel Blanco, principal at Broad Street Development, which owns two downtown office buildings totaling 1 million square feet. Corporations want high-end, energy-efficient office buildings, and it is crucial that New York have enough of this type of space to serve that need.“(New York is) not just competing nationally but globally,” Blanco said. “We’re competing with office buildings at Canary Wharf and in Paris.”He said there was initial skepticism about Silverstein’s 7 World Trade Center, which opened in 2006, replacing the original 7 World Trade Center, destroyed in the terrorist attacks on Sept. 11, 2001. “A lot of people thought it should be a garden. It’s not 100 percent occupied, but there is a great roster of tenants there.” Blanco said he hopes the two sides can put aside their differences and reach an accord. “These buildings are a key to the economic vitality of downtown and New York,” he observed.