The Real Deal New York

Hot FiDi market cited as reason for – and against – 3 WTC loan

Backers say Silverstein's building will snag lots of tenants, but critics worry about glut of space

April 08, 2014 12:40PM

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Larry Silverstein and a rendering of 3 World Trade Center

Larry Silverstein and a rendering of 3 WTC

A booming commercial real estate scene Downtown is both the popular argument for and against Larry Silverstein’s quest for a $1.2 billion loan guarantee from the Port Authority.

Proponents say the cash infusion, which Silverstein would use to build 3 World Trade Center, would restore the last corner of space destroyed in the Sept. 11 attacks and stick the final jewel in the crown of the area’s recent rebirth. The 2.5 million square foot building would quickly be filled with tenants, they argue.

Companies picking up and relocating from Midtown and Midtown South to Lower Manhattan picked up 6.87 million square feet of space between January 2011 and March 2014, according to data from commercial brokerage CBRE cited by the New York Post. Those leaving for spaces north of Canal Street, conversely, accounted for 1.74 million square feet.

“The demand makes sense and is not surprising given the overall context, including lower rents and the best transit access,” Jessica Lappin, president of the Downtown Alliance, told the Post.

But opponents say the loan is more risk than the Port Authority can stomach. They also argue that the tower, slated to open in 2017, would create a glut of office space in the area.

In addition, skeptics point to a Downtown with less space on the market than one year ago, though CBRE data cited by the Post points to an overall availability of 14 percent in the area, compared to 13.5 percent in 2013. In 2012, that figure was around 14.2 percent. [NYP] Julie Strickland

  • JohnACritic

    The Port Authority is not and never should have been in the business of financing office buildings. Money needs to be spent on bridges, tunnels, airports, ports etc. Enough is enough already. If the market is so good downtown, private financing should be readily available. I guess Silverstein would rather have the cheap money the Port Authority would provide than have to pay the going commercial rates.

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