WestLB’s 129,000-SF Move to 7 WTC Brightens Downtown Picture
- Dec 05, 2008
A major new lease from a financial firm is rare in New York City these days, especially around embattled Wall Street. So yesterday’s announcement that a financial firm will scoop up a large block of trophy tower space in Downtown Manhattan came as a pleasant surprise. In a sign of the times, however, the new arrival will not be a U.S.-based firm. Instead, the tenant will be a German investment bank–WestLB AG. The company will take the top three floors at 7 World Trade Center for a total of 129,000 square feet. Completed in 2006 by Silverstein Properties Inc., the 52-story building was the first office tower destroyed in the Sept. 11, 2001 terrorist attacks to be rebuilt. “This is a feather in [Downtown’s] cap in an otherwise very depressing year,” Robert Sammons, Colliers ABR Inc.’s director of research, said this morning. To some extent, Downtown’s gain is also Midtown Manhattan’s loss; WestLB will be leaving its long-time office at 1211 Avenue of the Americas, a Midtown trophy tower. Still, the WestLB lease will make a small dent in some of the Downtown office market’s less encouraging statistics. Not including the transaction announced yesterday, Downtown’s Class A office sector logged some 2 million square feet of negative absorption through November. That trend is a stark contrast to 2007, when Downtown absorbed about 1.7 million square feet during the same period. Downtown’s Class A office vacancy rate jumped from 7.2 percent in October to 7.6 percent in November, but the WestLB deal slightly improves vacancy to about 7.3 percent, Sammons estimates. WestLB’s move Downtown is also noteworthy because most other Manhattan tenants whose leases are rolling are staying put and signing short-term renewals, Sammons explained. “It’s a big change to move from a prime Midtown location to Downtown,” he noted. “It must have been very compelling for them to relocate at this point.” Financial details of WestLB’s lease have not been disclosed, but Sammons surmised that the tenant signed on highly attractive terms. Average asking rents for Class A office space in Downtown Manhattan are about $60 per square foot, a significant discount from the approximately $90 per square foot average in Midtown. The owner was represented by Silverstein Properties’ Roger Silverstein and an eight-member team from CB Richard Ellis Inc.: Mary Ann Tighe, Stephen Siegel, Howard Fiddle, Brad Gerla, Adam Foster, Jason Pollen, Simon Wasserberger and Christie Harle. Representing WestLB in the transaction were Newmark Knight Frank’s Mark Weiss, Scott Klau and Robert Eisenberg.