While specific bids are being closely guarded, the asking price was $3 billion, and according to one source close to the deal, "the final bid should be in that range." The source suggested that if the actual bid comes in under the price tag, it would not reflect an appreciable discount.
The sale, which comes just weeks after the $1.85-billion acquisition of Rockefeller Center by Tishman Speyer and the Crown Family, encompasses a package that includes the twin towers, Four and Five World Trade Center and the underground shopping mall. The owner of the complex, the Port Authority of New York and New Jersey, requested proposals this past spring to lease, manage and operate the property for 99 years. In 1998, when plans were approved to privatize the buildings, estimates were that it would bring in about $1.5 billion to the Port Authority over the life of the lease.
The 99-year, net-lease structure of the deal, says the source, is a structure that will provide to the winner of the bid "all the benefits and burdens of ownership."
No officials of Boston Properties, Brookfield or the Port Authority would speak on the record, other than a prepared statement delivered by a PA spokesman: "The Port Authority received proposals for the net lease of the World Trade Center today. Port Authority advisors and staff will conduct a thorough evaluation of the proposals prior to meeting with the Port Authority board of commissioners."
Yesterday's close of bidding was actually a postponement of the previous December deadline, a date that was termed "ridiculous," by one insider, "given the level of intensity involved in [bids] of this kind."
The four current candidates--Brookfield, Boston Properties, Vornado and Silverstein--were weeded down from eight in October. Out of all of the firms that made the cut, "Brookfield has the most to gain," the source said at the time. "They would gain the trade center in addition to the World Financial Center and the Merrill Lynch Building. They'd have control of class A space in Lower Manhattan." And now, with the added firepower of Boston Properties, Brookfield may very well be the leader of the pack.
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
