7 World Trade Sitting Empty At Ground Zero

Brokers and city officials have said that developer Larry Silverstein is asking excessively high rents at 7 World Trade Center. Rents at the empty 47-floor building are nearly double those at other downtown office towers.Rebuilding at the World Trade Center site has been the focus of critics lately, as the investment firm Goldman Sachs pulled out of plans to move its headquarters there and a redesign of the Freedom Tower has been initiated to address security concerns.Seven World Trade Center is the only building reconstructed so far at the Lower Manhattan site destroyed in the terrorist attacks three-and-a-half years ago.The building still has no tenants.“It is purely economic,” the president of the realty firm GVA Williams, Michael Cohen, said. “Tenants shop downtown looking for value, and 7 World Trade has been positioned as a Midtown building downtown.”The asking price for space at the almost-completed building is $50 a square foot for the base, $55 a square foot for the mid-rise, and $60 a square foot for the top floors. The average asking rent downtown is $33.43, according to a first-quarter market report by commercial brokerage firm Colliers ABR.The average rent in Midtown is $60.47.Across the street from the Silverstein building, asking prices at 3 World Financial Center, for example, are in the high-$30 range, brokers said, and the less costly building has restaurants, shops, and other amenities and services.“The rents at 7 World Trade Center are the highest asking rents downtown by far,” the director of research at Colliers, Robert Sammons, said. “The highest rents get downtown, for the very top buildings, is $40 to $45 a square foot.”A spokesman for Mr. Silverstein, Howard Rubenstein, said the developer is “bullish on the leasing prospects for 7 World Trade Center.”The high-tech security measures in the building, “as well as the costs inherent in new construction and financing, require higher rents than typical Lower Manhattan buildings,” Mr. Rubenstein said.City officials, including Deputy Mayor Daniel Doctoroff, have asked that Mr. Silverstein lower the asking rents in the building.A downtown business leader, who spoke on condition of anonymity, suggested that government offer additional subsidies for the Silverstein building and its future tenants.“We subsidized the Bank of America building in Midtown using Liberty Bonds because we thought it was important, so why not subsidize 7 World Trade?” the business leader said.The Bank of America building, at 1 Bryant Park, received $650 million in tax-exempt Liberty Bonds. Mr. Silverstein has already received $400 million in Liberty Bonds for 7 World Trade Center.The developer recently applied for $3.5 billion in additional Liberty Bond financing for the office towers he plans at or near ground zero, including the Freedom Tower.The view that Mr. Silverstein is asking too much for office rentals is by no means universal.“Larry is doing what any building owner would do: Set a price for what he thinks his property is worth and wait until he gets his price or the economy tells him he needs to adjust it,” the head of the Real Estate Board of New York, Steven Spinola, said. “If you called me two years from now and said it was still not rented, then maybe I would think he needs to lower the price, but he hasn’t even opened the doors yet.”Assembly Speaker Sheldon Silver, who represents Lower Manhattan, called criticism of Mr. Silverstein’s approach to renting 7 World Trade Center just a way to divert attention from the real issue, a lack of leadership in the reconstruction at ground zero.“It is outrageous that they are blaming the developer, that city officials including Doctoroff are trying to scapegoat him when it is really a lack of leadership that has caused this breakdown,” Mr. Silver’s spokeswoman, Eileen Larrabee, said yesterday.While Mr. Silverstein’s office building is the highest-priced downtown, compared with new developments in Midtown, 7 World Trade Center still represents a discount. Industry sources said developers of the Bank of America building are expected to ask $85 to $95 a square foot, while the New York Times tower has asking rents in the $75-$80 range.Several possible tenants have looked at the Silverstein property, including the law firm Cravath, Swaine & Moore, according to one broker, while others, like the United Nations, are said to be looking at the space.“I can assure you they are conducting two tours a month to major tenants,” the broker, who asked not to be identified, said.

7 World Trade Sitting Empty At Ground Zero

7 World Trade Sitting Empty At Ground Zero

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