Silverstein Properties and Westfield win $3.2B World Trade Center lease
International Council of Shopping Centers, 27 April 2001
Real estate developer Silverstein Properties, in a partnership with Los Angeles-based Westfield America, gained control of New York City’s World Trade Center yesterday by signing a 99-year lease worth $3.2 billion.
When completed this fall, the deal will put control of the largest U.S. office complex into private hands for the first time, and give Westfield America, one of the countrx’s largest mall owners, a major address to add to its roster of shopping centers.
Thursdax’s deal gives Silverstein Properties control of a 10.6-million-square-foot office complex, which comprises the 100-story Twin Towers, and two nine-story office buildings. The complex also includes a more than 400,000-square-foot concourse mall called the Mall at the World Trade Center. Silverstein already owns a 48-story tower built on land owned by the Port Authority, called 7 World Trade Center. Through a company spokeswoman, Silverstein President Larry Silverstein told SCT that its ownership of that building sparked great interest in buying the entire complex.
The World Trade Center was previously managed by the Port Authority of New York and New Jersey.
"This is a dream come true," he said. "We will be in control of a prized asset, and we will seek to develop its potential, raising it to new heights."
Westfield will be responsible for leasing and managing the more than 400,000-square-foot concourse mall, which is part of the downtown complex. Previously named the Mall at the World Trade Center, the retail portion will now be called Westfield Shoppingtown World Trade Center, said Catharine Dickey, vice president of corporate communications for Westfield America.
The Wall Street Journal reported that Westfield has proposed adding between 150,000 and 250,000 square feet of retail space to the mall.
The mall’s sales per square foot are expected to be in the area of $900 by the end of 2001, according to Port Authority officials, making it one of the countrx’s highest-earning shopping centers.
"This is a special opportunity for us,”? said Westfield CEO Peter Lowy in a statement. "We look forward to putting our management, leasing and development experience to work at this premier property.”?
While the bid for the World Trade Center lease was made jointly with Silverstein Properties, the lease was broken in two during final negotiations. Westfield America will make lease payments only on the concourse mall ? separate from the payments that Silverstein will make on the office portion, said Dickey, declining to comment on the amount of the payments.
Silverstein was the runner-up bidder for the World Trade Center lease, and won the right to negotiate a final agreement after talks with the top bidder, Vornado Realty Trust, Paramus, N.J., broke off last month.
Officials at Silverstein declined to elaborate on its future plans for the World Trade Center.