Durst hopes model office will shore up leasing at 1 WTC

TRD New York /
Oct.October 31, 2013 04:41 PM

One World Trade Center, the possibly 1,776-foot-tall office behemoth has “gone from being a construction site to being an office building,” a representative for developer the Durst Organization said. The tower opened its model offices on the 64th floor to the press this morning, but current leasing efforts are seeing mixed results.

The good news? The building’s construction is progressing as planned and asking rents remain steady at $75 per square foot. Tenants can also rely on generous incentive packages from both the developers (Durst and the Port Authority of New York and New Jersey) and the city and state. The bad news is that the developers have no new leasing activity to report since the U.S. General Services Administration finally inked a lease in July 2012 — although Durst chairman Douglas Durst assured those in attendance repeatedly that news on new tenants is forthcoming.

The developers are hoping that the model offices — which had mocked up spaces for creative, corporate and legal tenants — will turn the leasing tide in their favor.

“Now [prospective tenants] will be able to engage the building,” said Eric Engelhardt, director of leasing for Durst.

Finance, legal, advertising and media companies remain the most interested customers at 1 World Trade, confirmed Jordan Barowitz, director of external affairs at Durst.

When asked about the glut of office space in the Downtown market, with 4 World Trade Center, three blocks away, offering a million square feet in the area come next month, and area vacancy already at 14.5 percent (per CBRE Group’s third quarter figures), Engelhardt said that his tower and 4 World Trade were engaging in a “collaborative competition.” Durst also said his organization’s reputation as a landlord and the appeal of a “globally known address,” would make tenants opt for 1 World Trade over Hudson Yards, which will eventually boast 6.75 million square feet of office space, if all goes as planned.

Asking rents below the “sky lobby,” on the 64th floor remain $75 per square foot, Engelhardt said. Prices for the floors above have not yet been set but will be higher. Spaces as small as 2,000 square feet are available on the newly-subdivided floors and contiguous lower floors can offer combined spaces as large as 700,000 square feet, he said.

Tenant incentive packages at the tower also remain attractive. Would-be renters can count on between six and nine months of free rent and about $65 per square foot in money for their build-outs, Engelhardt said. Tara Stacom, executive vice chairman at Cushman & Wakefield, who heads leasing at the tower, also said that city and state incentives that are “as of right” shave off another $6 to $8 per square foot for the duration of leases.

Prodded on the building’s height – currently a matter of controversy and subject to a forthcoming ruling from the Council on Tall Buildings and Urban Habitat – Durst said simply “that’s the official height.”

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