NEW YORK CITY—Just when the ownership of One World Trade Center decided to make a major concession in order to woo tenants—after going nearly three years without signing a single lease for a private office tenant—the building has landed a new space user.
The Durst Organization has signed KiDS Creative, LLC to a15-year, 34,775-square-foot, full-floor lease on the 87th floor of the building. Headed by founder and chief creative director Pascal Dangin, KiDS is an ad agency that offers a full range of advertising and brand strategy services. The floor's occupants also will include the photography and film departments of Dangin's post-production house, Box, including a state-of-the-art theatre for private screenings.
The lease comes just as Durst—in conjunction with its joint venture partner, the Port Authority of New York and New Jersey—decided to reduce asking rents on the lower floors in order to stimulate leasing. The 3.1 million-square-foot skyscraper's landlord is cutting asking rents nearly 10% to $69 a square foot for larger tenants on the building's middle floors, down from $75 a square foot, according to the Wall Street Journal.
"The market's not there,” says Douglas Durst, whose company bought a stake in the tower from the Port Authority in mid-2011. "When we started in 2011, everybody expected the economy to take off, and obviously that hasn't happened. We have a lot of people looking at the space, but because of the asking rent, we are not able to really put anything over the finish line.”
The building's competitive set is charging lower rents, creating a difficult climate in which to attract tenants, a Durst spokesman tells GlobeSt.com. “The middle floors in the building are competing with the rest of the downtown market which is doing deals in the low to mid $50s. The upper floors are unique and we continue to ask between $80 and $100 a square foot there."
Meanwhile, Durst executive Eric Engelhardt, director of One World Trade Center leasing, says KiDS has nabbed an efficient space. “KiDS' 87th-floor setting will be a highly coveted work environment that combines unmatched views with highly flexible and adaptive space. The agency's tower floor tenancy serves as an ideal complement to Condé Nast. We expect to sign more leases with companies in the creative, media and tech world.”
“Pascal Dangin instantly recognized the value of 360-degree views witnessed through floor-to-ceiling glass,” adds Tara Stacom, executive vice chairman of Cushman & Wakefield, who heads the leasing team for One World Trade Center, which also includes Alan Stein, James Searl and Justin Royce, along with Jodi Pulice of JRT Realty. "He knew this extraordinary light would elevate his team's creative spirit and productivity. KiDS focused exclusively on the 87th floor, among the world's highest office spaces."
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
