NEW YORK CITY-With the recent announcement of a finalized deal between Silverstein Properties and the Port Authority of New York and New Jersey, the gargantuan project at Ground Zero seems to have finally pulled itself out of controversy. The memorial will be open and almost complete by the 10-year anniversary—the eastern portion may still have a few pieces yet to finish—the museum is on track for the following year and in 2013 Downtown New York City will once again have a 1 World Trade Center. The ballyhooed deal comes on the heels of a large commitment from Conde Nast to occupy a number of floors within the iconic structure and has helped momentum swing in a positive direction for the site. Tara Stacom, vice chairman at Cushman & Wakefield, who heads up the leasing of the 1,776-foot 1 WTC, sits down with GlobeSt.com to discuss some of the challenges and successes of landing tenants for Downtown's most anticipated project.
GlobeSt.com: How much space is guaranteed there now?
Tara Stacom: We have around 2.9 million square feet, total. We have an LOI with Conde Nast to take a sizable portion of the block below what we call our Sky Lobby (on the 64th Floor). And we are in active discussions with government agencies right now to finally bring those home. As a result we'll have--if all our commitments become firm--we'll have something north of one million square feet or north of that available.
GlobeSt.com: You are making some progress now. What were the challenges you ran into previously?
Stacom: The Cushman & Wakefield team had a really difficult time convincing prospects and the constituents of New York at large that this building was going to be built. Our initial marketing campaign was about the certainty surrounding this project, because so much happened for so long behind barricades well below ground level. It was seven levels below grade and you couldn't see anything happening, so people were in disbelief. That was my team's greatest challenge, initially.
Now that it's above the fencing and from the bridges and some of the skyscrapers in midtown, you not only see the cranes, but at certain angles you can see the steel structure of what is now the 38th floor. We no longer have to convince people that it's being built.
A challenge today really doesn't exist. People are excited about the prospect of a completely changed downtown manhattan. What we knew the Downtown-to-be doesn't exist today and will be transformational in five years. We had 20,000 people living downtown, and now a little over nine years later we have 55,000 people. The hotel population has blossomed over 50%, there will be 500,000 square feet of retail going in and the train station will connect subway lines and the Path station, with a hall that will be double the size of Grand Central Terminal with restaurants and shopping.
Downtown is going to become a place that young people are going to want to work. And the companies that never considered Downtown, are--because that's where they can hire the young talents.
GlobeSt.com: Chris Ward recently said part of the issue they had with leasing was the name "The Freedom Tower." Was it too political before? Was this an issue for your team?
Stacom: When Ward came on board, he got it very fast. He focused not just on this monumental master plan and how it was all going to come together, but he realized he had to start getting 1 World Trade Center built and the memorial finished by the 10th anniversary. And he turned it into a true construction project.
Part of focusing on building 1 WTC was to realize that the "Freedom Tower" name was not going to be as desirable as putting it on the global stage and keeping the "1 World Trade Center" name. When a major tenant comes in, they want the name of the building. Major tenants today of 1 WTC are respectful however of the fact that this is a global icon and should remain one on the global stage and should always be known as 1 World Trade Center. So the 900-lb gorilla isn't walking in the door and saying, "You gotta name the building for me or I won't come."
GlobeSt.com: So there was no demand for it to become, say, the "New Conde Nast Building"?
Stacom: Would every major tenant like having 1 WTC named for them? Probably. But they respect the fact that this is America's building on the world stage and it should have the address of 1 World Trade Center and they are all supportive of that.
GlobeSt.com: Even a year ago there was still a reluctance to come downtown. Companies were reneging on their leases, some were moving uptown to midtown. There was some concern about fear was keeping people away. What did you see at the time? Have you seen that subside in the waning years?
Stacom: Yes, earlier on in 2007 when the vision for this site was not as obvious as it is today, it was a question that came up. We don't experience that today. People are all caught up in the excitement and the significance of how it will have an extraordinary environment to it with the performing arts center, with the 16-acre park, with the magnitude of the buildings that will go on around it, retail space, etc. Today they'll ask the question, "How are people going to get to the observation deck and the restaurant?" With a significant amount of people that will be visiting the site, I think the stats show that almost 75% of people that visit Manhattan will make that a must-see on their tour list.
We keep the entrances separate, we keep the entrance on the west side of WTC with a completely separate entrance and plaza area for the Observation Deck and restaurant with three completely separate entrances for the offices.
GlobeSt.com: Do you think some of the delay in getting the building up helped with people coming to terms with moving downtown? That if the building had gone up two years right after 9/11 people would have been more reluctant to come back into it?
Stacom: I've never thought about that perspective. It's an interesting question. Those kind of a crystal ball questions when looking back are always hard to say, but we can't be more pleased with what's happening right now. The demand is so strong for the building, we're touring it extensively every week and exchanging proposals of interested prospects…and what's strange with this building is typically you don't see one-floor interests.
We're getting one-floor interests and the building is three-and-a-half years out. Normally tenants of that size don't raise their hand and show an interest until a building is actually skinned and they can start walking through it.
GlobeSt.com: Is the historic nature of the building helping in that regard?
Stacom: I think the confidence in what the Port Authority has done to recognize a true developer of renowned expertise and reputation for this tower was important to its success in leasing and bringing on the Durst Organization. It has been a great part of what has driven the continued interest for the building.
GlobeSt.com: Do you have any tenants on the horizon that you can talk about?
Stacom: We have quite a few, but like everyone in this industry we try not to be too out in front and always wanting their permission before we start quoting them—
GlobeSt.com: Are they big name tenants?
Stacom: We have both. Significant financial institutions looking for a sizable block of space and global one-floor tenants. This area has always been financially services driven, but shown interest has been everything from publishing to telecom, communications, entertainment and consulting
I think what we have is a new building and there hasn't been much construction in midtown or downtown recently, 7 WTC being the most recent. And some want to change the culture within their companies. A lot of the companies are looking to be more collaborative in their build-outs over the next 10- to 15-year lease terms and 1WTC provides that unique ability because of its unique structure and its unique floor plates.
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