The Port Authority and the federal General Services Administration are negotiating for “much less” space at 1 World Trade Center than the GSA originally intended to lease, Realty Check has learned.
The US agency and the PA announced a prospective deal for 600,000 square feet four years ago, when 1 WTC was still called the Freedom Tower and government officials were desperate to get the long-stalled project off the ground.
Now, sources said, the GSA will likely end up with as little as half the original commitment. That comes on the heels of our story earlier this year that a second prospective government lease, for the state Office of General Services, is all but dead.
The prospective GSA shrinkage and OGS withdrawal will leave the PA with a whopping 900,000 square feet more in the 2.6 million square-foot tower to offer higher-paying private-sector tenants.
The GSA agreement with the PA was less than binding. Since then, everything has changed: Condé Nast pre-leased 1 million square feet at 1 WTC, and the Durst Organization signed on as the PA’s minority partner.
Cushman & Wakefield’s Tara Stacom has been walking more prospective tenants through the fast-rising tower. She would not comment on the GSA. But she said, “We’re very confident about our ability to lease this building based on what we have on the table, and to continue to diversify the tenant mix downtown.”
With a widespread perception that 1 WTC is hot, the last thing the PA or Durst wants is for the “iconic” tower to be full of government tenants paying below-market rents. The original, highly subsidized terms called for the GSA to pay a net-effective rent in the low $40s per square foot, compared with the $60s a foot starting rent Condé will pay.
The PA declined to comment. Renee Miscione, a spokesperson in the GSA’s New York office, said, “We’re in discussions with the Port Authority about this matter, so we are not going to confirm or comment.”
The PA is mum about who’s looked at 1 WTC, as is Larry Silverstein about his 4 WTC. But we’ve learned of three law firms that have kicked tires at either or both — Milbank Tweed (which is also said to be considering the World Financial Center), Morgan Lewis and Chadbourne & Parke.
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Oppenheimer & Co.’s 270,000 square-foot lease at MetLife’s 85 Broad St., first reported on The Post’s Web site yesterday, is more good news for downtown. While hardly on the scale of Nomura’s planned move north, which will leave behind 600,000 square feet at the World Financial Center, Oppenheimer is exiting 130,000 square feet at 300 Madison Ave. — one of three addresses from which it will relocate staff.
It’s also worth noting that Oppenheimer will begin moving employees into 85 Broad early in 2012, while Nomura’s lease at the WFC runs through September 2013. What’s “available” now at 2 WFC might not be more than two years from now.
Jones Lang LaSalle’s Mitch Konsker, who repped Oppenheimer with JLL’s Matt Astrachan, said, “Their consolidation into a new headquarters proves that the resiliency of downtown is stronger than ever.” (The deal’s credited to Cushman & Wakefield, where both men were when they began working on it with Steven Bauer.)
JLL’s Peter Riguardi, Frank Doyle and Cynthia Wasserberger repped landlord Met Life. Riguardi wouldn’t say what Oppenheimer was paying. But he said of 85 Broad St., “We’re very optimistic for this building and our asking rent [for future leases] will be in the low $50s to the high $50s, depending on floor.”
The 900,000-square-foot tower had been vacant since Goldman Sachs moved out.
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Word is that Hines is casting around for an equity partner to get its stalled 53 W. 53rd St. residential/hotel tower off the ground — and there might be departures from the original 72-story Jean Nouvel design.
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At Newmark Holdings’ 40 Worth St., new tenants have signed for nearly 90,000 square feet in the past few months, bringing the 740,000-square-footer to full occupancy.
Among the new arrivals: Bevmax Office Centers, New York Law School and New York Down town Hospital. Newmark Knight Frank’s Brian Steinwurtzel and Roy Lapidus repped the owner ship in all the deals.
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We reported last week that asking rents at Blackstone’s 1065 Sixth Ave., where Plaza Construction is moving, are $49 a square foot. In fact, the current ask is in the $60s. scuozzo@nypost.com