Locked-Out Tenants Stuck Paying Rent

NEW YORK CITY-Brookfield Properties Corp. executives yesterday assured jittery investors that while it expects its evacuated downtown buildings to be operational within eight weeks, tenants at One, Two and Four World Financial Center as well as One Liberty Plaza will not be allowed to slide on rents or skip out on leases. Meanwhile, the firm will accelerate construction schedules for ongoing office projects in response to increased demand for space following the World Trade Center bombings.

According to company chairman Gordon Arnell, deputy chair Bruce Flatt, president and CEO-elect Ric Clark and John Zuccotti, chairman Brookfield Financial Properties, tenants of two of the affected properties, comprising roughly half the total space, signed triple net bond leases, which stipulate that they must continue to pay rent regardless of damage to the building. The other two buildings’ tenants, they say, are prohibited from terminating their leases for the next 18 months.

With regard to insurance coverage on the properties, Clark says, “all costs from the fallout of the attack including the full costs of repairs” are covered. He also says acts of terrorism are covered under the policy but that if the government deems the attack an act of war, “I believe it is exclusionary.”