NEW YORK CITY-Following the flurry of excitement generated by Conde Nast’s landmark one-million-square-foot deal at One World Trade Center on Wednesday afternoon, CB Richard Ellis’ New York tri-state CEO Mary Ann Tighe and vice chairman Gregory Tosko agreed that the relocation would transform Lower Manhattan into a live/work powerhouse. “I have been a believer for a long time that downtown has been undergoing a transformation that makes it one of the most desirable places to work in the city, and perhaps in the country,” Tighe tells GlobeSt.com, during a media phone conference after the Port Authority of New York and New Jersey okay'd the lease, in a joint venture with the Durst Organization. CBRE represented Conde Nast in the deal.
“You need somebody to go first, and one of the great lessons of Conde is that they pride themselves on being a forward-looking company,” she says. “It is part of who they are and one of the most important elements of their culture, and they apply that culture to their real estate as well.”
The luxury publisher will relocate from its current headquarters in Midtown and will occupy floors 20-41, approximately one-third of One World Trade. The Port Authority will take responsibility for Conde’s existing lease at 4 Times Square, which expires in 2019. But finding a new tenant looking to pay higher prices will not be seen as a challenge, Tighe says. “It is not a great risk to take this rent on, and the Durst Organization would be mighty happy to get bigger rents on a long-term deal from someone else,” she says. Durst’s 10% share in One World Trade Center was also approved today, she added.
The move is also a sign of the growing popularity of media companies relocating to Lower Manhattan. Aside from the Conde deal, the New York Daily News signed a near 100,000-square-foot lease at 4 New York Plaza. Other Web 2.0 companies that have committed to Downtown include the Knot at 195 Broadway; FDM Group at 14 Wall St.; AppSense at 17 State St.; Flycell at 80 Pine St.; and New York Internet Co. at 100 William St.
At the same time, Tighe says the culture of Downtown’s financial roots will not go away, but will evolve with time. “When you have Goldman Sachs, Moody’s, Standard & Poor's and so on, we are not seeing the financial sector disappear downtown,” she says. “It’s just going to be a much more diverse population. I think it will be reflected in the retail and you are going to see it the hours of operation.”
Questions about net effective rents were not disclosed due to confidentiality agreements, but the three-million-square-foot, $3.1-billion tower is expected to be completed in 2013.
With Conde as One World Trade’s lead anchor, Tosko explained that the deal will have a positive effect on asking rents throughout Downtown, making them comparable to Midtown. “It is transformative,” he says. “Even as we brought Conde executives down there one-by-one, the level of excitement was unanimous.”
The deal also serves as a benefactor for Silverstein Properties’ Three and Four World Trade Center. “We’ve seen a pick-up in phone calls,” Tighe says. “We’ve been getting universally a positive response.”
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