Rents at One World Trade Center cut amid slow demand
One World Trade Center is billed as "the new icon of New York's magical skyline," but so far, that status isn't drawing the tenants its owners had hoped for.
Some rents are getting a 10 percent haircut, with the owner now asking $69 a square foot, down from $75 per square foot, The Wall Street Journal reports, citing an interview with developer Douglas Durst.
"The market's not there," Durst told the publication. "When we started in 2011, everybody expected the economy to take off, and obviously that hasn't happened."
While Durst cites a slower-than-expected economic return as a reason for the slow take-up, another reason might be the site's history. Formerly called the Freedom Tower, the building stands near the former location of the original World Trade Center, which was destroyed in the Sept. 11 terrorist attacks. Security has been a concern of the Port Authority of New York, which is a partner in the building. In March, the building's security chief stepped down after security breaches, including a teen who snuck past guards and up to the building's 104th floor.
So far, the building has lured major tenants including Conde Nast Publications and China Center New York, but it remains only 55 percent leased as it prepares to open later this year. At 1,776-feet tall, the building is the tallest in the Western hemisphere. Safety features include "life safety" systems that are protected by a reinforced concrete core and an emergency generator to back-up "life safety and critical systems," according to the building's website.
Demand for office space is picking up in downtown Manhattan, with Time Inc. planning to move from Midtown to Brookfield Place, which is the former World Financial Center, The Journal notes. Durst noted that other downtown properties are charging less per square foot, at about $50, which is adding to One World Trade Center's issues.
"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," Durst said.
In an email to CBS MoneyWatch, Durst director of external affairs Jordan Barowitz wrote, "One World Trade Center is the best building downtown, but at a $20-$25 per square foot premium it's difficult to close deals."