The Real Deal New York

Westfield opens WTC mall, but closed storefronts abound

Major tenants like H&M and Victoria's Secret have yet to open
By Konrad Putzier and Gloria Tso | August 16, 2016 06:10PM

The World Trade Center’s new retail complex officially opened on Tuesday, but visitors didn’t find all that many open stores.

Out of roughly 100 shops expected to occupy the $1.4 billion center, more than 40 didn’t open Tuesday, according to an on-site “ambassador” for landlord Westfield. H&M’s planned 25,000-square-foot store remained closed, as did Victoria’s Secret’s space, a Duane Reade, Breads Bakery and Choza Taqueria, among others. Many of the stores that have yet to open are near the PATH station and below 3 World Trade Center.

The delayed openings could create a financial headache for Westfield, which in 2001 signed a 99-year ground lease for the site and in 2013 paid $800 million for the port authority’s 50-percent stake in the project.

As The Real Deal reported last month, mall operators typically include co-tenancy thresholds into retail leases, meaning tenants don’t have to pay full rent if a significant number of storefronts remain empty. “[Westfield] can’t afford to have major tenants not open,” a source told TRD at the time.

It isn’t clear whether retail tenants at the World Trade Center signed such clauses. A spokesperson for Westfield declined to comment.

Construction on the WTC mall began in 2007, but the project suffered a number of delays since. A spokesperson told TRD that the mall is 100 percent leased. However, the company has sued at least four smaller tenants who declined to occupy their spaces, claiming they are contractually obligated to take up their space first before Westfield needs to find a replacement tenant.