Leasing contest looms as World Trade Center rises

By Sinead Cruise

LONDON (BestGrowthStock) – The team behind New York’s One World Trade Center skyscraper project has launched an aggressive leasing campaign in Europe’s biggest financial hubs as a London building boom threatens to ramp up competition for tenants.

Dogged by delays, design hiccups and funding problems, construction of the 541-meter tower is at last gathering pace, but its chief developer and leasing agent are under no illusions that finding occupiers to fill its 3 million square feet of offices may ultimately be the project’s biggest challenge.

“After much public scrutiny, debate and doubt, this building is now 26 storeys above grade (ground) and is on schedule to complete at end 2013. If you like, this is its ‘coming out’ party,” Chris Ward, executive director of the Port Authority of New York and New Jersey told Reuters.

“We’re pleased One World Trade Center is coming on at the right time. But let’s be clear, the New York office market is not yet so robust that you can roll out new towers every two years,” Ward said, referring to the oversupply risk posed by a multi-million square foot pipeline in downtown Manhattan.

The European marketing of the One World Trade Center, set to be the tallest building in the United States, kicks off shortly after several UK developers restarted mothballed skyscraper construction plans amid talk of a possible shortage in prime offices in London’s City financial heartland.

One World Trade Center and a slew of high-rise London towers including British Land’s “Cheesegrater” and the Land Securities

“Walkie Talkie” scheme could hit the market for prime office rentals together, triggering a race for tenants who may only be able to afford one large relocation at a time.

Ward rejected the idea that the occupier response to simultaneous building booms in New York and London could end the debate on which was truly the world’s premier financial center.

“London’s strength as a financial center is the ability to service very sophisticated, creative sections of the banking sector whereas our strength is as a worldwide trading hub. They are two markets serving different people in different ways.”

LEASING

The NY/NJ Port Authority, which helps to manage the regional public transport system, has embraced its accidental role as speculative office developer after militant Islamists reduced the World Trade Center financial district to dust on September 11, 2001.

It has committed $11 billion to the reconstruction efforts, including $3.2 billion on the One World Trade Center build, but leasing agent Cushman & Wakefield will play an equally critical role in restoring Downtown to its thriving former self.

Star Cushman broker Tara Stacom hopes to take advantage of rebranding push on Wall Street, which she hopes could help the team sign up the first major financial tenant by end-2010.

“The market is turning in our favor. New York has seen around 8,000 new financial services jobs created since the start of the year and there are a handful, or just shy of a handful, of 1 million square foot tenants currently shopping the market for new quality construction,” Stacom said.

“We know several banks who want to change their culture and image, and there is a sense that the first occupier in this building will achieve almost instant global brand recognition.”

Ward and Stacom are confident a phased building agreement with fellow World Trade Center developer Larry Silverstein and incentive packages offering savings of up to $25 a square foot, will prevent a glut of empty offices.

Office occupiers in New York’s Midtown — North America’s most costly office market — pay average rents of $64.51 per square foot, about a third of the rent in London’s West End, the world’s priciest, data showed this month.

“We’d be pleased in this market to start off with a $60 square foot rent, but if someone wanted to talk about a million square foot deal, we’re open for business,” said Ward.

“If someone wants daily access to that view from the top on the 88th floor, we’d hope to talk rents of $100 and upwards for that really valuable space,” he said.

Stock Market News

(Editing by Will Waterman)

Leasing contest looms as World Trade Center rises